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NCM Institute

NCM Institute

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Name: NCM Institute
Date registered: April 8, 2013


The NCM Institute is an important educational resource for your entire management team. Founded on decades of experience in the ultra-competitive automotive industry, NCMi provides in-depth, real-world dealership training on department fundamentals and advanced management best practices that your team can put into action immediately.

Latest posts

  1. #AskNCM: What is the Key to New Vehicle Success? — August 15, 2017
  2. #AskNCM: How Long Should It Take to Recondition a Vehicle? — July 25, 2017
  3. #AskNCM: What’s the connection between low gross profits and aged inventory? — March 29, 2016
  4. #AskNCM: My service advisors can’t meet at the same time. How can I train them? — March 17, 2016
  5. Behind-the-scenes: GMEP Graduates Celebrate their Achievement — February 9, 2016

Most commented posts

  1. #AskNCM: How Long Should It Take to Recondition a Vehicle? — 2 comments

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NCM Institute

#AskNCM: What is the Key to New Vehicle Success?

Used vehicle sales, service, and customer retention suffered in the wake of increased sales in the new vehicle department. As the economy ebbs and flows, we see the tides shifting; now the new vehicle department is beginning to suffer. How do we keep every part of the business profiting?

NCM Institute instructor Robin Cunningham gauges the situation and pinpoints what it’s going to take to keep your new vehicle department afloat in our ever-changing market.

Have another question for Robin or the other #AskNCM experts? Leave a comment below!

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NCM Institute

#AskNCM: How Long Should It Take to Recondition a Vehicle?

Reconditioning used vehicles is a major priority for any pre-owned dealer. If the car isn’t on the lot, it can’t be sold. Therefore, every minute the vehicle is in the shop is possible lost revenue.

Steve Hall, an instructor at the NCM Institute, shares his top tips for reconditioning vehicles faster and more efficiently. See what Steve’s years of industry experience can teach us on this segment of #AskNCM.

Have another question for Steve or the other #AskNCM experts? Leave a comment below!

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NCM Institute

#AskNCM: What’s the connection between low gross profits and aged inventory?

NCM expert, Robin Cunningham, explains the connection between reduced profits and aged inventory and how above-market used vehicle pricing leads to invisibility online.

Internet pricing isn’t a race to the bottom, Robin says, but a tool to help you move inventory faster. See how: 

Can you sell a used vehicle in fewer than 30 days? Discover more solutions for aged used vehicle inventory issues.

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NCM Institute

#AskNCM: My service advisors can’t meet at the same time. How can I train them?

This question comes up during every service management class at the NCM® Institute: How can I train my service advisors when we can’t all meet as a group? It’s a challenge that every service department faces, whether you’re a big shop or small.

NCM expert, Steve Hall, gives you his take on the problem and offers his “coaching from the sidelines” technique as a solution.

Have you tried Steve’s technique in your service department? How did it go? Want to #AskNCM a question? Leave a comment below, and we’ll answer it!

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NCM Institute

Behind-the-scenes: GMEP Graduates Celebrate their Achievement

NCM recently celebrated with our newest group of General Management Executive Program (GMEP) graduates. Catch a glimpse of all the fun!

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NCM Institute

Profiles in Leadership: Building the Ledezma Legacy

We recently caught up with Amanda Ledezma, General Manager at Cable-Dahmer Chevrolet in Kansas City, Mo. The second generation to work with NCM Associates, we asked her to talk about creating a family legacy in the automotive industry and what it takes to be a leader.

How has NCM helped your family build a legacy? Tell us below. 

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Developing the right pay plan for service advisors

Mechanic wrench tool

Last week, George Gowen wrote about the importance of service advisors to retaining your customer base (Miss it? Check it out.) This naturally leads to the question: How much should I be paying them?

Taking Stock of Service Advisor Pay

Before you make any decisions about your dealership’s pay plan, you need to carefully evaluate the current market, as well as your budget constraints. In general, NCM recommends that you consider the following questions:

1.     What’s your philosophy towards advisor compensation?

2.     What’s the right amount to budget for advisor compensation?

3.     Should advisor productivity affect advisor compensation levels?

4.     In addition to monetary compensation, what other elements do you want to include in a well-balanced advisor pay plan?

What’s your philosophy towards advisor compensation?

Most dealerships have begun to view their service department as a “selling” organization, not just a “fix it and smile” division. When you take that philosophy, your compensation plans must focus on sales activities and results. To achieve this, your advisors will need to improve their customer R.O. transactional quality while decreasing their customer R.O. transactional quantity. This could result in the need to add more advisors.

What’s the right amount to budget for advisor compensation?

When it comes to service advisor compensation budget, NCM recommends using 12.0% of department gross (before any parts gross transfer) as the metric for budgeting service advisor compensation. This budget guideline may vary sometimes—a little higher for domestic franchises and a little lower for luxury franchises—but relating compensation to performance is an important step. And, remember: budgeting refers to how much you should pay, while structuring refers to how you could pay.

Should advisor productivity affect advisor compensation levels?

Advisor productivity is a critical component of compensation. You must clearly define this connection, and let your service advisors know that their income will be dependent on it. Set expectations and get their commitment to this approach. After all, it’s advantageous to them: an advisor with high transactional quality and CSI, could earn as much as 14% of the gross he/she generates; meanwhile, an advisor with below average transactional quality and CSI, might earn as little as 10%. When your service directors understand this, they will do what’s necessary to improve their pay.

What other elements do you want to include in a well-balanced advisor pay plan?

This is harder to answer. Here’s the thing: there is no “one size fits all” solution to automotive pay plans. What works brilliantly for one dealerships may be an absolute disaster in your shop. Each dealership has a different business culture that impacts pay plans. And your franchise requirements, personal priorities and state and local laws will all significantly influence the decisions you make on pay plans.

Structuring Service Advisor Pay Plans

While you must keep in mind that every dealership is different, here are the general recommendations that NCM has for any service advisor pay plan:


1.     Service advisor pay plan structure should be 100% incentive based, with a reasonable underlying guaranteed draw against commission.

2.     As billable hours is the force driving service and parts profitability, the main determinant for pay should be Hours Billed per Individual Advisor per Month, with $x.xx paid for each hour billed, in all labor categories. We’ve seen this as a stand-alone compensation metric, as well as combined with either customer effective labor rate or hours per customer R.O., sometimes both. This category might represent 55% – 70% of the plan structure.

3.     CSI Performance is usually the next element. The advisor should be rewarded for achieving world-class service. The payment can be quantified as “an additional $x.xx paid for each hour billed” (see #2, above). Depending on how much manufacturer money is tied to CSI, this category might represent 10% – 20% of the plan structure.

4.     Next up are the Spiffs and Incentives, which cover such things as: (a) Parts Sales per Customer R.O.; (b) Customer Effective Labor Rate; (c) Menu Closing Percentage; (d) Tire Sales; (e) Service Contract Sales; (f) MPI (ASR) Closing Percentage. The payment might be quantified as an additional $x.xx paid for each hour billed (see #2, above), as a flat amount or as a per item amount. This would represent approximately 15% of the plan structure.

5.     The final category is a Team Incentive based on Percent of Total Monthly Shop Hours Objective Achieved. The intent here is to have all service and parts personnel focus on one number—total shop production capacity— throughout the month. Their goal is to achieve or exceed full capacity operations. You may quantify the payment as an additional $x.xx paid for each hour billed (see #2, above) or as a flat amount. This should be about 7% – 10% of the plan structure.

Pay plans are tricky. What successes have you had in creating and implementing pay plan changes? Tell us below.


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NCM Institute

NCM® Institute Center for Automotive Retail Excellence Announces Winner of Lifetime of Virtual Training

8827_NADA_DailyAd27_9_8125x7_Jan27_2014_NCM_OnDemandThe anticipation is finally over! Tim Crabtree of Future Ford of Sacramento, won lifetime access to the NCM® OnDemand virtual training platform for his entire dealership from the NCM Institute, the leading provider in automotive management training.

The NCM Institute held this contest throughout January and February, and the rules were simple:  participant’s sign up for a complimentary 5-day test drive of OnDemand, and after taking the brief Orientation Module, were entered for a chance to win.

With over 70 hours of content and access to more than 30 trainers, NCM OnDemand offers a wide variety of courses for any dealership employee. OnDemand provides interactive, virtual training from the best instructors in the industry including the likes of Dave Anderson, Alan Ram, Jeff Cowan, and NCM Institute Instructors. The training provides engaging modules to increase profitability and team performance while addressing a dealership’s various pain points.

NCM is proud to offer Tim Crabtree a valuable tool that he can share with Future Ford of Sacramento. Tim has attended multiple NCM Institute classes and is excited to be a member of OnDemand. “I attended the Service Management Level I and the Service Management Level II classes this year at the NCM Institute in Kansas. Never attending a 20 Group class or discussion before, I did not know what to expect nor what was expected of me,” Tim said. “Steve Hall and Robin Cunningham do an excellent job with the learning format of the class and the overall instruction you receive. NCM definitely offers a wide range of classes that would benefit anyone that is up and coming in the business or the seasoned veteran that is becoming comfortable.”

With NCM OnDemand, you can receive great training without leaving your dealership.

If your dealership is among the many struggling to find the right training solution, try the free 5-day NCM OnDemand test drive. You’ve got nothing to lose, and a world of virtual training to gain. Visit today.

NCM would like to thank the participants who entered the contest and congratulate Tim Crabtree and Future Ford of Sacramento as winners of the lifetime access to NCM OnDemand.


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Celebrating Independence Day in America

Today we’re taking a break from the traditional automotive retail best practices information we usually share on the Up To Speed blog to celebrate the birth of our great nation.  We thought you would enjoy some interesting facts about the Declaration of Independence we found at Read

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Dealership Successor Gap? How to identify and motivate Key Managers

Today’s article is submitted by David Ciambella CFP®, a partner with The Rawlsmanager Group.So the question is:How to identify, motivate, and retain managers that will be committed to protecting and building business value, mentoring your successor(s), or running the business while you are still looking for a qualified successor to take over your business?

First, it is important to realize that all managers are not created equal!

Because there are different levels of managers–Key Managers, Special Key Managers and Very Special Key Managers—it is imperative you understand that each classification of manager is motivated very differently. Motivating and retaining managers must be done with forethought and care; otherwise, the very objective you are looking to accomplish could crash and burn.

Below are a few hints you may find helpful as you consider individuals who could be cornerstones in your succession bridge:

  • Key Manager is a loyal, dependable manger who is security oriented.

An example of an incentive that would motivate a Key Manager would be a Supplemental Executive Retirement Plan (SERP) which is a non-qualified deferred compensation plan. For example, let’s assume you are a Key Manager who makes $80,000/year. The plan could state that each year you serve in a bridge capacity, 10% of your annual compensation ($8,000) would be set aside for your benefit.

  • Special Kay Manager is an individual who would be more difficult to replace. Special Key Managers are typically performance-driven individuals.

An example of an incentive for a Special Key Manager would be a non-qualified deferred compensation plan that has two components. One component could be a flat percentage (10%) of annual compensation as described above. The second component could be sharing in a percentage (10%) of company profits above the prior year. For example, let’s assume you are a Special Key Manager who makes $150,000. Let’s further assume the profitability of the company last year was $500,000 and this year it is $750,000. In this example you would receive $10,000 for the first component and $25,000 for the second component for a total of $35,000.

  • Very Special Key Manager is more entrepreneurial; a rainmaker who if he/she left, they would impact profitability and would be very difficult to replace. These individuals are typically looking for respect.

One of the ways to respect a Very Special Key Manager is by offering him/her an opportunity to become your partner or an owner in the company. Caution: There are several ways to acknowledge and respect a Very Special Key Manager other than giving him/her actual stock in the company, such as Phantom Stock or becoming a partner in a management company. However, there are some Very Special Key Managers who warrant actual stock ownership.

Remember…aligning the incentive with the type of manager you are dealing with will have a significant impact upon your ability to retain them for the long term.

The Rawls Group specializes in business succession planning by addressing the issues that impact the continued success of a business legacy.  By partnering with their clients and their clients’ other advisors, they work to develop a plan that will perpetuate the leadership, culture, performance, and relationships that are key to business success.  For additional information contact David at 407-718-4587 or Learn more at


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