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Category Archive: 20 Groups

Joe Basil

From the 20 Group: A Plan to Address Falling Gross and Net Profit

businessman with laptop

We’ve had a good run. From 2010 to 2015, new car sales steadily increased and total dealership gross profits trended up along with net profits and blue sky values. But, beginning in the middle of 2015, things started to change. Some franchise sales rates began to flatten out. Then, the overall market started to level. Manufacturers began clawing for market share by raising incentive spending, and it became harder to sustain our customary net profits.

The evidence is in: Net profits are falling

Concerns about net profit aren’t just anecdotal. Within the thousands of car dealerships and 30-plus vehicle lines that we track at NCM, all but three vehicle lines had increased net profits year-over-year from 2014 through June 2015. Mid-2016, however, only seven car lines out of the 30 we track had improved net earnings year-over-year from 2015 through June of 2016. The remainder had YOY net profit decreases.

Build your plan

It’s no news to anyone that it will be challenging to generate the same net profits in the coming years. The real question is, what you are doing about it? As a dealer or general manager, it’s your responsibility to recognize what’s changing in the marketplace, acknowledge it, and adapt.

Having been through oil embargoes, manufacturer strikes, 21% prime rates with 14 percent unemployment and several recessions, I can help. Carefully consider the following list of questions, then use the answers to develop your strategy:

  1. Are you making excuses? Or taking action?
  2. Have you accepted the reality that you will have to make some adjustments in your business plan going forward?
  3. Based on the volume of business and gross profit you know you will develop, have you built a financial model that generates your desired return on investment?
  4. Have you set a date to initiate changes?
  5. Have you shared the information with your management team and challenged them for suggestions and solutions?
  6. Have you reviewed your organization chart to determine if you have the right number of people?
  7. Do you have the best people in the right position?
  8. When have you last ranked your management team on leadership abilities and results?
  9. When have you last sat with your CFO/controller and reviewed expenses line by line?
  10. When have you last sat with each department manager and discussed expenses line by line?
  11. Have you identified areas in which you are under performing and determined the cause?

Success is still possible

You can still make a lot of money and do very well in a flat market when you identify changes, acknowledge them, and take action to adapt.

During my years spent working with dealers and business owners, I have consistently found that sharing and reviewing financial data with management teams, and then showing them how to improve a particular financial performance metric, is one of the most effective ways to identify opportunities and increase market share and profits.

If you are a member of an NCM 20 Group, it’s even easier to do this. I recommend a page-by-page and line-by-line composite review with your department managers at your dealership. It will be a productive meeting and, once they understand how to change a number, you’ll be amazed by the suggestions and ideas they have for improvement.

Need more help? See how Joe Basil and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting.

Permanent link to this article: http://blog.ncm20.com/2016/09/from-the-20-group-a-plan-to-address-falling-gross-and-net-profit/

Lycia Jedlicki

The Zero-Cost Solution to Increase Automotive Net Profit

Success concept

How can I retain more customers and net more profit? I hear a variation of this question at every dealership and 20 Group meeting! Today I’m sharing my definitive answer.

The Zero-Cost Solution to More Automotive Net Profit

All sorts of products and services claim they’ll improve retention and profit. Here’s the thing, though—no matter what you buy, what franchise you run or what budget you operate with—there’s only one real solution. Accountability management.

Accountability management is the cornerstone of NCM’s philosophy. It’s so important that we teach it in every NCM Institute class. Many managers struggle with it, though; when I ask managers what their biggest weakness is, they often will tell me “Accountability Management.”

How can you overcome this challenge? Here are two case studies that will help you create a strong accountability culture at your dealership.

Case Study 1: Focusing on Ford

During my recent NCM Ford 20 Group meeting, a service manager explained how he brought NCM’s tenets of accountability management into his department. These simple tactics yielded a profound result: service advisors had an increased understanding of their roles and could better contextualize their performance against the rest of the team.

Here’s what he did. First, the service manager performed a monthly evaluation of each advisor. After discussing the assessment with the Advisor, he turned the report into the general manager/dealer.

What and how did he evaluate each advisor?  The following items were rated “Good, Fair or Needs Improvement, and the evaluation included a place for comments:

1. Prompt friend greeting

2. Patient, good listener, polite

3. Provides customer an agreed upon time

4. Makes promises that can be kept

5. Pulls history files

6. Knows status on all current vehicles

7. Status update before promise time

8. Presents required maintenance

9. Prepared before customer arrival

10. Clean, organized workstation

11. Update daily log sheet

12. Write up “Early Birds” before doors open

13. Acknowledge customers when busy

14. Meets customer at vehicle

15. Personal appearance

16. Smiles/Thanks customers

17. Helps other Advisors when needed

18. Provides clear, complete write-up

19. Utilizes “Comeback” system

20. Provides clear estimates

21. Promptness to phone/courteous

22. Returned Surveys

23. Carryover process

24. Walk around

These probably look pretty basic to most people; however, we must always inspect what we expect! By putting expectations in writing every month and going over it with each advisor, the manager able to lead the team to success. And it didn’t cost a penny!

Case Study 2: The Forgotten Machines

Last week, I visited a dealership that has both an alignment inspection machine and tread depth inspection machine on the service aisle.

While doing a repair order analysis and observing the service aisle my first day there, I found that they were not utilizing either machine and had not sold a single alignment. Talk about a poor return on investment!

After addressing the lack of sales with the service manager, we came up with a plan.  Every car was going to be inspected, and we would measure the results at 10 a.m. and 3 p.m. daily using a dry erase board in his office. Advisors were required to record how many alignment checks were performed and sold, noting them on the board.

Positive results were nearly instant. The first day after launching the initiative, seven alignments were sold. The following day, we had six alignments sold before 11 a.m.  This did not cost the dealer anything, the Service Manager just starting holding his people accountable. Just imagine how much this will increase net profit in the long run!

Tell us below how you hold your team accountable. Need help with accountability management? Discover how Lycia and her colleagues can make a difference at your dealership.

Permanent link to this article: http://blog.ncm20.com/2016/09/the-zero-cost-solution-to-increase-automotive-net-profit/

Emily Johnson

Five Steps for a Successful 20 Group Meeting

composite

It may be just three times per year or a weekly email, but as a member of an NCM 20 Group, you likely work with the Client Services & Meeting Coordinators team at NCM. We are the “behind-the-scenes” meeting planners who make all the cogs in the machine of a 20 Group work together.

We do many tasks to ensure your meetings are productive and fun, but there are a few simple things that you can do yourself to ensure you have a more successful 20 Group meeting:

1. Actively work towards completing your commitments from the previous session. By making a conscious effort to post those commitments in your office and look at them daily, you’re staying in the 20 Group mindset year-round. You’ll make the most of your 20 Group Membership and put to work the tips and tricks you’ve learned in the meeting.

2. Submit your financial data monthly. Always. The BEST meeting composite is a COMPLETE meeting composite. At NCM we know that while we live, eat and breathe NCM, you do not—you are focused on your business! But if you come to a meeting without submitting financial data since the last one, you can’t get the full benefit of the agenda’s composite section.

And that’s where our moderators shine. They LOVE financial data and want to help you dig into that composite and find where your numbers can improve (and praise you for doing other things well)! So next time you get a reminder email from me or one of my fellow coordinators, open it and do whatever you have to do to get that data submitted on time! Trust me; you’ll be glad you did.

3. Make your flight & hotel reservations. One of the things I end up spending the most time on as a coordinator is chasing reservations. I ensure that every member (and his or her guests) has a place to sleep and reservations for dinners, activities, receptions—even golf outings! And it’s my responsibility to make sure no one in the 20 Group gets left behind, so I don’t rest until I hear from every member and member candidate.

You can minimize travel and hotel issues (and disappointments) by watching for my email reminders and taking a quick five-minute break to complete the two attached forms. Then, click on the link to reserve your hotel room. Not only does this ensure that your hotel and activities are booked, but once I have your registration, I won’t bother you about it until our next meeting. And the fewer emails, the better, right?!

4. Read the agenda. Your 20 Group moderator (or, in some cases, your coordinator) will send you the meeting agenda before your first day. The agenda is the roadmap for your 20 Group meeting, and it is critical that you open and review it immediately. Look for parts that are bolded or bolded AND red. These are the most important items, and you will need to set aside an hour or so to prepare these items before your next meeting.

Every group is different, so for the sake of simplicity, I’ll just say that everyone has some assignment to complete before their first meeting day. Make sure you get it done, so you can get the most from the time you have with your peers and moderator.

5. Write your commitments. Remember those commitments I was talking about earlier? Well, we’ve come full circle! If you write your commitments down in the meeting room (or even better, go to the NCM Member Website and type them into our new online form), please send them to your moderator or coordinator. We will type them into a nice, tidy sheet that you can print and hang on your office wall, making it easier to complete Item 1, above, in time for the next meeting.

What’s my point in sharing these five action items? My number one goal is for you to have a great experience with us. Each NCM 20 Group is a partnership between the member, you, and NCM—aka me and a bunch of other cool people who work together in Kansas City. Our collaboration can’t succeed if we don’t all put in our best effort. I promise to do my part and, if you do the five items above, you’ll reap the benefits from doing yours!

Permanent link to this article: http://blog.ncm20.com/2016/08/five-steps-for-a-successful-20-group-meeting/

Lycia Jedlicki

From NCM’s 20 Groups: 5 Best Practices to Survive the Viral Recall Epidemic

recall

It doesn’t matter what franchise you have; recalls are having a major impact on our day-to-day operations.  In every 20 Group meeting I’ve had this year, recalls have been a hot topic, and each dealer is coping with them differently.

Common recall worries

Although responses vary, without a doubt our 20 Group members share similar concerns about recalls. I often field such questions as:

  • How do we go about our day-to-day operations with the least amount of turbulence?
  • How can I ensure that we are complying with the factory and government standards?
  • Do we have the correct technicians performing the recall?
  • How do we make sure that recalls are not negatively impacting our “Customer Pay” work in our service departments?
  • Where should we store and dispose the impacted parts?
  • Where and how are we supposed to store these vehicles?
  • Do we put recall customers in a rental/loaner vehicle?

Treating the Recall Virus

Over the last few months, 20 Group members and I have been working together to develop best practice to address this growing scourge. Here’s what we’ve adopted:

  1. Check for open recalls when appraising and delivering a sold vehicle using the safercar.gov website; require the customer to sign, too. Many of our dealers also check their inventories multiple times a week for open recalls
  2. Schedule or perform recalls at non-peak times such as afternoons, if possible.
  3. Check with other dealers/companies/rental agencies for increased business.
  4. Perform multi-point inspections looking for additional services to recommend now or in the near future.
  5. Discover your opportunity. One of the big questions is can I sell a vehicle with an open recall?  This opinion varies among many dealers, legal councils and manufactures, whichever policy your dealership adopts, please make sure everyone is aware how to handle these vehicles.

Recovering from recalls

Recalls aren’t likely to go away anytime soon, so the best thing you can do is develop a better attitude towards them.

My 20 Groups like to focus on the positive side: all the incremental business recalls bring to our Service Departments. Seize the opportunity—it’s up us to retain these new clients and turn them into “Customers for Life”.

What practices has your dealership started to deal with the viral spread of recalls? Tell us below.

Permanent link to this article: http://blog.ncm20.com/2016/06/from-ncms-20-groups-5-best-practices-to-survive-the-viral-recall-epidemic/

Tony Alessandra

Using DISC Styles To Build Teams That Work

Businesspeople in Meeting

“Round up the usual suspects,” the gendarme ordered in the famous line from the movie Casablanca. And frequently, that is how executives think when they create teams, committees, or task forces. The boss says or thinks something like, “Let’s appoint anyone who might know something about this issue.” Or, even more likely, “Grab anybody who’s got a stake in this thing.”

Organizations, of course, love such groups because when they work, they can improve coordination, help employees feel more involved, and maybe even spur innovation. However, when they flop—or, more commonly, just lapse into mediocrity—they can drain an organization of its vitality and leave a legacy of posturing, power struggles, and misunderstandings.

Designing a Group

We naively assume any group can automatically be a team. However, one of the biggest reasons that teams misfire is that personality differences are ignored.

If, when you create a team, you employ knowledge of the four behavioral styles, you greatly improve its chances for success. You need to take into account that there are natural allies and antagonists among the styles and also that each style functions best at a different phase in the life cycle of a team.

The Natural Cycle of Groups 

Work groups typically follow a cycle, just like the organizations which spawn them. They face predictable obstacles, rise to the occasion or fail, and as a result, either evolve or deteriorate. At every stage in that cycle, each of the various behavioral styles can be a help or a hindrance.

Phase One: Finding Focus

Any new group, at first, gropes to find its focus. Members think: Is this going to be worth the effort? Is this going to be a useful team that can get things done?

In addition, each member at this point is seeking to define his or her role. They silently ask: Do I fit in here, or am I an outsider?  Am I going to be an important member of this group with real input, or am I just here for appearances? Is this going to waste my time?

Conscientious Styles and Dominance Styles can be especially helpful during this first phase. They are both skilled at getting to the heart of matters, though in different ways.

If the challenges the group faces are intellectually complex, the Conscientious Style will be in his element. Because they are so good at reasoned analysis on tasks, Conscientious Styles can help clarify the mission and give the team focus.

Similarly, if the main hurdle the group faces is more of a conflict—say, a history of discord among members and/or a split over its goals—a Dominance Style likely will shine. In fact, the group may be yearning for just a strong leader who can tell the warring members to quit butting heads and either commit, or leave. That is a situation ready-made for the Dominance Style.

In either case, those with these two behavioral styles may be able to get the group to psychologically buy into the idea of moving forward together, to convince the team that progress will be possible.

Phase Two: Facing the Realities

While a tough-minded Conscientious Style or Dominance Style may get the group going, this stormy second stage often cries out for the buoyant optimism of the Interactive Styles. Their friendly, informal brand of leadership can send out a strong, clear signal that this group can work together and make things better for everybody.

A people-oriented approach is needed at this stage because at this point that reality often intrudes. The group may begin to see how difficult its task really is, how little time and resources are available, and how members may need to settle for a half a loaf rather than a stunning breakthrough.

All these factors can breed frustration, confusion, and disillusionment. This is when it will be decided if the group tackles the real issues in meaningful ways, or is mired in its own internal power struggle. That is why Interactive Styles, who are good at smoothing over rough edges and encouraging all to share their thoughts and feelings, can be a key here.

Many groups, of course, never transcend this them-versus-us mindset. They continue to silently debate: Who is the top dog? Such a team is not likely to accomplish much. Instead, members will continuously collide with one another, limiting themselves as a team and as individuals.

However, if the Interactive Style, with his or her upbeat attitude and people skills, can get the members to quit keeping score, they may yet learn to work together.        

Phase Three: Coming Together

Cooperation and collaboration become increasingly apparent, and it is now that Steadiness Styles can help meld individual differences into group progress because they are especially good at coalescing differing views.

By opening their hearts and heads to one another, the Steadiness Styles can blend the discordant elements into more of a single melody. The team begins to narrow the gap between what it earlier said it wanted to do and what it is actually doing. There has been a shift of identity, and it has become a true team because members who previously thought in terms of “me,” begin thinking “we.”

Phase Four: Reaching for Stardom

The final stage is more the exception than the rule. However, when reached, it means a team really is performing at its best and is functioning as a whole, not just as a collection of individuals.

Its members enjoy being part of the team and express that fact. They have learned how to work together. Morale is high. The group continually produces quality and quantity output and is effectively self-managing.

In the previous three stages, Dominance Style-type behavior might have been called for on key decisions. However, at this stage, a hands-on, controlling style is not needed. In fact, once a group has this momentum, such a strong-handed style can be counterproductive and could even torpedo the group’s progress. Instead, the team’s decisions flow naturally from its deliberations. Differences among its members become a source of strength, not dispute.

Differences, not deficiencies

Love’em or hate’em, work groups are here to stay. (Some estimates are that as much as 50% to 80% of a manager’s time, for example, is spent with groups.) However, while they can be high-performance vehicles, they can also be high-maintenance, especially in the early stages. Only a team that fully understands and savors its members’ styles is likely to be genuinely productive.

If members were chosen carefully and if they practice adaptability, the advantages of stylistic diversity can quickly outweigh the group’s liabilities. Remember: We are talking about personality differences here, not deficiencies.

Therefore, in the final analysis, working with groups all comes down to suspending judgment, empathizing, and trying to play to people’s strengths. The result, despite our differences, can be a wonderful synergy.

gen_sales

Permanent link to this article: http://blog.ncm20.com/2015/06/using-disc-styles-to-build-teams-that-work/

Dustin Kerr

The Buy Here Pay Here 20 Group – What It Is and How It Will Help

A 20 Group is a peer collaboration model that allows you to meet with other BHPH dealers of similar size from non-competing markets to share best practices, successes, and more importantly, failures. NCM® Associates is the originator of the automotive 20 Group process, and has been empowering dealers to learn from one another since 1947.

A typical BHPH 20 Group meets three times a year at a location chosen by the group. Meetings can range from 1 ½ to 3 days depending on what the group wants to discuss and the location.

The ability to get away from the day-to-day distractions of the dealership and share ideas with some of the brightest, most successful dealers in the industry are some of the key factors that drive profitability amongst NCM® group members.

In addition to the meetings, members receive monthly financial composites that allow them to compare themselves to other group members, as well as comparing themselves against the NCM Benchmarks® across all groups.

The meetings are facilitated by a professional NCM Executive Conference Moderator with years of experience in the BHPH and LHPH industry. The agenda and hot-topic discussion is decided by members of the group.

Topics of discussion include:

  • Compliance
  • Proper Inventory
  • Advertising
  • Collections policy and procedures
  • Hiring and retaining top talent
  • Sales and collection pay plans
  • Employee productivity
  • And much more!

Why choose NCM as your Buy Here Pay Here 20 Group provider?

You have probably realized by now the power of the BHPH 20 Group peer collaboration model, but why should you choose NCM Associates to facilitate your group?

  1. NCM Associates is the originator and pioneer of the 20 Group model. We started our first Ford 20 Group nearly 70 years ago and that group is still in existence today!
  2. Data Integrity- Numbers are only as good as their accuracy. All statements are reviewed personally by a moderator before they are compiled and sent to you in your monthly composite. Our data team manages and processes your data in-house; we don’t outsource it!
  3. Access to an Industry Expert- Your emails and calls are personally answered and returned by your moderator, not an assistant or secretary. Even when we are facilitating meetings, you can expect a return email or call within 24 hours!
  4. Custom Composites- You have the ability to log on to your member website and compare yourself against as many or as few members from your group as you want in whatever categories you want.
  5. It’s All About You- The group gets to decide what goes into the composite, where you want to meet, agenda topics, and much more.
  6. Online Training- Your membership includes training from some of the top experts in the industry that would cost you thousands to obtain on your own. This training is delivered by our OnDemand virtual training site.
  7. No Contracts or Commitment- If you don’t feel like you are getting value from the group, you can resign from the group at any time.
  8. Innovation- As the industry leader, NCM is always working with the brightest minds in the industry to develop tools and strategies to help you become more profitable. As a BHPH 20 Group member, you often get access to these tools for a reduced cost or even free!

In addition to the 20 Group, NCM Associates also offers on and offsite consulting as well as BHPH training for salespeople, collectors, and managers.

If you are ready to join your peers and find out how to achieve a 50% or better ROI, click here or contact me today at 913-827-6677 or dkerr@ncm20.com.

Permanent link to this article: http://blog.ncm20.com/2015/06/buy-here-pay-here-20-group-what-it-is-how-it-will-help/

Kevin Cunningham

Imitation is the highest form of flattery for 20 Groups, too.

Business Team

Peer collaboration can come in many forms; it can come from conferences, blogs such as this one, news publications, discussion boards, and social media platforms.  Those are all good ways to share ideas, but there comes a time when surface-level chat doesn’t cut it.  When it’s time to get serious about taking your business to the next level; when you know you need to step out of the day-to-day business in order to work on the business, there’s no better platform in our industry than a 20 Group. Granted, I’m biased, but if you’re in a 20 Group or have been in a 20 Group in the past, you know nothing compares to the idea sharing and consistent and ongoing operational improvement and accountability that comes with peer collaboration among similar sized, like-franchise dealer peers in a true 20 Group environment.

But what is it that makes a 20 Group unique and separates it from other ways of collaborating?

As the automotive industry pioneer in 20 Groups, we’ve found that in order for the members to get the most benefit from their 20 Group experience, the following must be present:

  • Confidentiality
  • Non-competing dealerships
  • 20 or so members—that’s the peer collaboration sweet spot
  • Detailed analytical tools to help you compare your operation to your peers and Benchmark-level performers
  • Vigorous business discussions among all group members
  •  Members control agendas, meeting locations and who can join

That last point is an important distinction. We’ve found that when the members of the group have ownership over whether a dealer is or isn’t a market conflict, who to include in the group, where and when they meet, and what they discuss when they meet, the group will be more cohesive, stable and self-sustaining.  On a related note, your moderator should not arbitrarily bring in guest speakers, or dominate your meeting by consulting or selling; at least with NCM, we are going to let you control your meeting.

Those of us at NCM Associates have thoroughly enjoyed watching our innovatively-simple idea blossom into what is an invaluable asset to many car dealers and dealership managers, and to business owner-operators in many other industries as well.  We also consider it flattering that so many have emulated our concept.

We have seen other organizations and individuals offer traditional 20 Groups over the years, but don’t be fooled—a discussion platform, a conference or a training seminar is not a 20 Group. These formats have a place in the conversation, but they will never match the power of face-to-face collaboration where many lifelong friendships and accountability partners are born and endure.

So, remember:

  • If your competition is or can be there, it isn’t a 20 Group
  • If anyone can join, it isn’t a 20 Group
  • If there are hundreds of people involved, it isn’t a 20 Group
  • And if you don’t control the conversation, it isn’t an NCM 20 Group!

What do you think?  Are you confused by all the talk about what is and isn’t a true 20 Group?  Are you in a traditional 20 Group or have you found another form of peer collaboration that works for you?


Permanent link to this article: http://blog.ncm20.com/2015/02/imitation-is-the-highest-form-of-flattery-for-20-groups-too/

Joe Basil

Musclecar Dream Engine Comes True in Modern Technology

LT1This column is typically reserved for “next practice” tips for better retail automotive management, but today we’re paying homage to the source of our passion for this industry — the allure of the automobile and all it signifies. It stole our hearts and captured our imagination with dreams of speed, power and freedom on the open road. For me, the passion was sparked by the Chevrolet musclecars of the 1960s and 70s.

For all you other musclecar motorheads who used to have hair with a color other than gray, the 2014 C7 Corvette Stingray LT1 engine is a motorhead’s dream come true. It’s got all of the technology you dreamed of in the day but had no idea how to bring it to mechanical life. Just go back to the 60s and early 70s, when you were 18 and building that small block drag car. Yeah, when you pulled up to the Sunoco gas pump and cranked the octane lever to 110+; when the gas filler was behind the tail light on a fin or behind the license plate; when you burned a full tank of premium on a Friday or Saturday night street racing with your hottie.

That’s when you spent hours and hours talking to the guys at the track, trying to get the latest tricks from the speed shop and spending lots of bucks building that small block to put out every bit of horsepower you can squeeze out of it. You remember, putting in that highlift cam, swapping out the stock intake for an Edelbrock high-rise topped off with an 1100+(or larger) CFM Holley. Pulling off the heads and putting on the double bump angle plug 2.02’s. And since you switched the rear end gears and you threw out the stock distributor you had to replace it with an HEI mechanical advance and had the advance curve tweaked. Oh and don’t forget those “Hooker Headers” and a couple of Cherry Bombs just for effect.

And then when it came to race day, on the track or on the street, you checked the temperature to see if you were going to swap out those jets on the Holly, reset the base advance, and maybe adjust up those rocker arms to change the cam timing. All of those little tweaks you did under the hood with tools are now being done by computers in milliseconds without ever touching a wrench.

Back in the day, I was a musclecar motorhead and even with gray in my temples, I guess I still am.   That’s why I’m so excited about a very special event coming up later this month in Tonawanda, New York.  Where the heck is Tonawanda, New York?Tonawanda is a suburb of Buffalo and it happens to be the home of the GM powertrain plant where the 2014 C7 LT1 Corvette Stingray engine is built.

The C7 LT1 has it all. Let’s start with 450 hp out of 6.2 L. By the way, that’s 378 cu in. No need to make any adjustments anymore since we now have computer-controlled direct injection, variable valve timing with 2.13 intake valves, and computer-controlled ignition timing. By the way, remember using “plastiguage” to check your bearing clearances? Now the clearances are measured in microns. A micron? Yeah, a micron; that’s one millionth of a meter.

So how would like to see these engines being built? On August 23rd and 24th the General Motors plant in Tonawanda is having an open house. So what? It’s an engine plant, you might say; well, there’s history that goes with this plant and the Chevrolet musclecar engines it produced. When they look under the hood of 60s and 70s musclecars, collectors always look for a little rectangular sticker on the valve cover that reads “Produced by Chevrolet Tonawanda.” Not only is the Chevrolet Tonawanda engine plant noted for producing 60s and 70s musclecar engines and big block marine performance engines, it holds the world record for the most number of engines produced in one day — 8,832 (in 1988).

The plant is celebrating its 75thanniversary and is having an open house and classic car show on August 23rd and 24th. You get a full tour of the plant and the actual crews that build the engines will be explaining and showing you how they do it. I was in this plant quite often in the 1970s when we had a Chevy store close by and serviced the plant cars. I went on the tour a couple of years ago and what a drastic contrast!

It’s a great opportunity to fly into one of Buffalo’s  private aviation strips, bring your off shore boat and do some “street” racing on the Niagara River or Lake Erie, or just cruise your favorite musclecar ride to the car show. Last but not least,don’t forget to visit Frank and Teresa’s Anchor Bar (where chicken wings started) for some wings and “beef on weck.”

For details just go to GM Powertrain Tonawanda Engine 75th Anniversary on Facebook (https://www.facebook.com/75thanniversary) or give me a call and let’s wax nostalgic about the days of our shared musclecar mania!

Formerly of the Basil Automotive Group, Joe Basil is a 20 Group Moderator for NCM Associates.  NCM has many GM nameplate 20 Groups including Buick, GMC and Chevrolet dealer groups. For information, call 877.803.3631 or to reach Joe directly, email jbasil@ncm20.com.

Master-Your-Destiny

Permanent link to this article: http://blog.ncm20.com/2013/08/musclecar-dream-engine-comes-true-in-modern-technology/

NCM Associates

The Perfect Day For A Dealer/General Manager

african salesman standing at car dealership

Realizing the dealer/general manager’s day is full of interruptions, if you could wave a magic wand and create the perfect day, what would you do during this day?

Which activities do you wish you did every day? Which activities are the top ten for you to do every day? Here’s an exercise we use in our 20 Group meetings from time to time that might be helpful for you to realign your daily priorities. The following list is meant to be a thought-starter, to establish what should be priority items a general manager does in a typical day. This is not an all-inclusive list and you are encouraged to add to it.

Highlight the number of the process if you are actively doing it on a daily basis. Highlight the entire process, if it is a process you used to do and need to reactivate (process evaporation).

  1. Arrive at the dealership early, walk through the shop before the technicians arrive, and check the appointments for the day.
  2. Watch the shop “wake up” as the parts personnel, technicians, service advisors, and service directors arrive.
  3. Take time to talk to everyone in fixed operations. What is the pulse of the store today?
  4. Watch the service drive process. Are the recommended processes being followed? Is the service manager on the drive in the morning?
  5. Visit office personnel. Pick up daily DOC and see if deals from previous day are in the office to be processed. How is the paper flow and what are the challenges in the office?
  6. Stop by the customer lounge. Is it clean? Are amenities available? What are customers discussing? Are customers receiving the proper communication while they wait?
  7. Walk through the showroom and check for privacy issues, clean desks, and open computers. Watch the sales department “wake up” for today’s business.
  8. Attend sales meeting and sales training sessions to see if scheduled training is being reviewed. Is the sales board up to date? How are unit sales tracking this month?
  9. Hold a five-minute stand up meeting with all key managers. Review DOC and discuss any inter-departmental challenges for the day. How is the dealership tracking for the month, by department? Discuss any customer concerns.
  10. Reserve time after the manager meeting to discuss departmental challenges and customer concerns with the managers involved.
  11. Attend make-a-deal and save-a-deal meetings with managers on duty. Are these processes being done and are they productive and profitable?
  12. Walk the lot with your new vehicle managers. Is inventory clean, properly displayed, oldest units in front in hot spots of the lot? Are all required stickers, addendums, etc. on vehicles and fresh looking?
  13. Visit the sales office when deals are being worked to verify the approved sales process is being followed for starting price, cash down, payments, leases, trade evaluation process, etc.
  14. Visit the used vehicle department. Are there any privacy issues? Walk the lot with the used vehicle manager. Are oldest vehicles in the hot spots? Is inventory properly reconditioned? Drive the oldest vehicle on the lot with the used vehicle manager. How many vehicles have been in inventory over three (3) days, but are not front line ready?
  15. Personally open all the mail for the day and distribute to applicable associates.
  16. On payroll day, personally distribute payroll checks to associates.
  17. Review daily reports:
    1. Contracts in transit
    2. Previous day’s receipts/deposits
    3. Accounts receivable
    4. New vehicle inventory
    5. Used vehicle inventory
    6. Wholesale units sold for the month
    7. Parts inventory
    8. Employee parts purchases for the month
    9. Employee vehicle purchases for the month
  18. Review repair orders from the previous day.
  19. Review deals from the previous day.
  20. Mystery shop sales, service, and parts by phone and internet.
  21. Visit with F&I personnel. How are you tracking? What is your product penetration? Unfunded contracts? Deals working, etc.?
  22. Take an employee to lunch.
  23. Attend the technician/service advisor meeting.
  24. When factory reps, finance reps, fire marshal, EPA, and other outside vendors are in the store, make sure you spend a couple of minutes with them before they leave.
  25. Sign all checks, review documentation, and purchase orders.
  26. Visit the parts department and do random bin checks.
  27. Walk the entire lot for damage, abandoned vehicles, things that need to be repaired, replaced, or cleaned up.
  28. Review status of staffing requirements. Are additional people needed? What is the status of recruiting?
  29. Go online and review the dealership’s website. Are all specials current? Are vehicles priced per dealership’s policy? Are pictures of vehicles current, clean, and are the approved number of photos shown?
  30. Review internet lead source data. Number of leads, closing, number of hits, length of time on site, etc.
  31. Select a major process and see if the process is being followed as established (again, process evaporation).
  32. Visit the cashier area during a peak time to confirm an active delivery is being completed for all service customers.
  33. Arrive at the dealership at closing time to see how customers are being handled at the end of the day.

Clearly you cannot do all of the listed items in one day, but what should the priority items be in your operation? What other items are on your list? Should you have a daily, weekly, and monthly checklist of things you must do to effectively keep on top of your stores? What reports should you be reviewing daily?

Please share with the Up To Speed Blog readers the activities and must-review reports you do on a daily basis in the comments section below, or tell us what reports you wish you had that could make your life easier!

Most of the best practices and management processes that these thought-starters refer to are taught in our on-site consulting engagements and through the NCM Institute’s training programs for dealers and general managers, like the General Management Executive Program.

Permanent link to this article: http://blog.ncm20.com/2013/04/the-perfect-day-for-a-dealergeneral-manager/

Leo Hart

Seven Tips for Better Dealership Parts Management and Profitability

auto mechanic or smith with tablet pc at workshop

NCM has just completed another cycle of 20 Group meetings, each focusing primarily on the parts department. Truth be told, we had not focused on this discipline for a number of years, being more concerned about the variable sales and expense management areas of our auto retail business.

As a result of the discussions, a few crises became apparent. One wake-up call for me was the manufacturer continuing to increase its control of inventory investment, effectively siphoning cash out of stores. My second revelation was that the dealer isn’t being informed of or conversant about current inventory purchasing and returns programs. Third was the discomforting old problem of a long-term, trusted parts manager taking advantage of his tenure, resting on his laurels, and allowing the departmental profitability to evaporate.

All of the above issues come down to one problem: leadership has taken its eye off the “parts ball” and have not demanded discipline of their parts manager to meet certain standards and achieve net profit levels.

Here are my most important takeaways from these parts discussions:

  1. Define a day’s supply number you can live by. One dealer had $200,000 in parts with no sale over 12 months. He also had $500,000 in excess inventory day’s supply. I can live with 45 days supply, but many dealers are beating the 30 day supply mark with daily stock order availability. Numerous dealers were purchasing, on an emergency basis, 60% of the parts they were selling each month. The inventory they owned was stagnant.
  2. Separate the wholesale operation from the retail service support operation. One dealer’s parts manager, a big wholesaler, based most inventory purchase decisions on wholesale marketing strategies, not the demands for customer repair order parts. It seemed the purchase decisions were made based on what could be made on the purchase discounts, not on customer demand. Be mindful that manufacturers are reducing the return allowances.
  3. Be aware of why your customer repair order parts margins are what they are. One member had an 18% margin on customer repair parts and he didn’t know why. This can be monitored each day through your DMS and by your service advisor. Matrix pricing still works, allowing the repair parts margins to compensate for the competitive parts margins. I still like to see an overall customer repair order parts margin in excess of 42%.
  4. Do an annual parts inventory with the help of an outside consulting or auditing firm. At the very least, check the bins on a rotational basis throughout the year, correcting counts and locations. Some dealers work a cycle count allowing for a complete inventory check each quarter. Can you imagine an error rate of nearly 30% in your bins? It happened, and it’s happening now. One dealer, having asked his parts manager what an inventory reconciliation looked like, found that the manager did not know. Hard to believe? I believe it.
  5. Net profit is for parts departments too. Prior to the recession, I always looked for parts departments to be easily profitable at 30% of gross on up to 45% of gross profit produced, depending on the franchise. Lately, I have seen parts departments only break even, not to mention the excess personnel attributed to parts. Get the expenses in line with the parts gross you are currently developing. This is not brain surgery, and your DMS does most of the counting work for your personnel, not to mention the help the manufacturer contributes to the ordering process.
  6. Know your manufacturer programs, how you earn purchase discounts, and how to protect yourself through the return process. I heard one confession in the meeting room where a parts manager had purchased another truckload of engines to build his return allowance credits, telling the dealer that was what he had to do. However, upon further investigation, the dealer found that the $65,000 purchase did not increase his return allowance, which further depleted the cash in the store. I also heard that General Motors is expanding the number of part numbers that dealers should carry to be RIM compliant, further siphoning cash from the dealers. We are talking about thousands of newly-recommended parts numbers, as RIM will demand 85% compliance and as much as 100% compliance on many more parts numbers that are newly classified as “Service Drive Required” parts. OUCH! Other manufacturers may be doing these same things under their customer retention banners.
  7. Know the specific criteria and process for returning parts, as well as cores and warranty parts for review. You probably cannot even return a special order part. It is usually most important that the packaging of the returned part be submitted with the defective part. We heard one story where a parts manager decided that warranty return parts were not his concern and threw out all the warranty parts to be returned, putting the dealer at risk of losing the value of all those claims.

In conclusion, get involved in your parts investment. For some dealers, this is a large bank account on its own. If it is not in perfect order, you probably need to get outside help for your manager, or you may need new parts department management.

Learn more about parts department management by joining a 20 Group or attending an NCM Institute Parts and Accessories Management course!

Permanent link to this article: http://blog.ncm20.com/2013/04/seven-tips-for-better-parts-management-and-profitability/

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