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Category Archive: Fixed Operations

Kirk Felix

From the 20 Group: 12 New Ideas for Fixed Ops

Cars in the automotive service

During each of my NCM 20 Group meetings, I encourage members to come up with ideas to improve Fixed Ops business and profits. As you prepare to close out 2016 and prepare for the coming year, I thought I’d share their top 12 insights.

  1. Add a sales manager to the service drive. Dealerships are adding this position to improve service drive performance and consistent management of processes.  This new personnel should also enhance sales through training and immediate T.O.’s for turned down sales.
  2. Increase entry-level pay to attract higher-quality staff. One way that fixed operations directors are improving the quality of their applicants is by offering higher starting pay.  Plus, promoting from within is more successful when starting with a higher quality individual!
  3. Leverage Amazon Prime to negotiate with local vendors. Check all outside quotes against Amazon Prime to ensure the lowest pricing; ask local vendors to price match.
  4. Create body shop installation kits. Build parts kits with assigned part numbers for standard installations. The kits should include sealers, sanding discs, tape, clips and any other needed items. Because insurance companies typically pay for items with a part number, this should simplify the payment process.
  5. Get involved in local high schools and encourage kids to consider technician careers. I think everyone agrees that we need to attract more talent to our field. Some of my 20 Group members work with high schools in their communities to help students learn about options for automotive careers. If you do this, be sure to explain the great earning potential of fixed ops work.
  6. Set monthly goals for technician and advisor production; review them during weekly 1-on-1 meetings. Make sure every team member is contributing to department goals by working with them on individual achievements. During weekly sessions, review performance and coach anyone who hasn’t met their objectives. A good starting place is increasing technician production by five hours per week.
  7. Track closing ratios on failed items by advisor. Failed items on multi-point inspections have to be repaired. The question is, will they be serviced at your dealership or a competitor? Monitor which service advisors close these items successfully, then coach the ones who do not. Consider service advisor training for those team members needing more help. (NCMi has a great course.)
  8. Get phone training for all front-line staff. We may live in a digital age, but the majority of business is still conducted by phone in fixed operations. Training staff to handle incoming calls properly will increase business opportunities.
  9. Make expense analysis and reduction a priority. A common worry from fixed ops directors is in our meetings is that they have gotten lax on expense management.  Almost universally, my members feel it is time to analyze all billings and look for reductions from their vendors.
  10. Train service advisors in sales. Fixed operations directors are running service departments as sales departments, so focus on improving the skills and performance of their service advisors. An excellent internal training resource is your dealership’s sales manager.
  11. Require advisors and managers to prewrite repair orders at the end of the day. Reviewing all scheduled work helps make sure parts are available and ready for customers. Management can also use the advanced notice to make recommendations about the proper word tracks for increased sales.
  12. Track parts fill rate by repair order. Having only 6 of 7 need parts for a repair order is zero fill rate for the repair order because you were unable to complete the work.

 

Learn more about Kirk Felix and how he and his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting.

Permanent link to this article: http://blog.ncm20.com/2016/12/from-the-20-group-12-new-ideas-for-fixed-ops/

NCM Associates

#AskNCM: Why should I use a variable labor rate in my shop?

Rick Wegley, NCM expert and Institute instructor, explains how variable labor rate can recapture labor costs for specialized work and is an important response to a dropping effective labor rate in this new #AskNCM video.

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

Permanent link to this article: http://blog.ncm20.com/2016/11/askncm-why-should-i-use-a-variable-labor-rate-in-my-shop/

NCM Associates

#AskNCM: Why are Labor Sales Important to Parts?

Why is labor important?

“Well,” says NCM expert, Rick Wegley, “labor-to-parts sales ratios typically show almost a dollar for labor,  dollar for parts on almost every ticket, if we do an overall big picture view.”

Get Rick’s recommendations for how you can keep technicians in the bay and keep Parts sales going by focusing on labor.

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

Permanent link to this article: http://blog.ncm20.com/2016/08/askncm-why-are-labor-sales-important-to-parts/

Rick Wegley

Endangered Maintenance

Cars in the automotive service

You’ve probably heard about the “disruption” of our business model and the need to become more focused on asset management—in the service department, we’d call this time management.

In the changing economy, the importance of understanding work mix, effective labor rate, and gross profit planning by opportunity to do business has increased. This is a chance to create the “modern service department.”

The Rise of Meager Maintenance

Manufacturers have reduced required factory maintenance services to an oil change and tire rotation. Added to that is a list of “inspection only” items to be performed at each interval through the first 100,000 miles of ownership.

In a sense, maintenance has become an endangered species.

I’m sure that essential services, such as oil changes and tire rotations, will continue for most manufacturers for many years to come. But, even today, there are vehicles on the road that do not require these services. We have vehicles equipped with fully electric motors and directional tires with offset wheel configurations that eliminate the need—or even the ability—to perform a simple tire rotation. These same machines have powertrain components that require no fluids, contain sealed housings with contents that exceed field service capability, and, because of that same advanced technology, they will only fail on very rare occasions.

In response, we already see a change in our work mix. Based on the most recent NCM statistics, reporting dealers and our Retail Operations Consulting team are nearing five years old with an average of 60,000 miles. In metro markets or those dealers with higher lease penetrations, the averages for both vehicle age and mileage are much lower.

Preparing for Fixed Ops’ future

I seriously doubt—and I’m confident you’ll agree—that any manufacturer will produce a vehicle requiring more maintenance than anything they are producing today. And I’m certain that our retention of new vehicle purchasers (especially used vehicle buyers) will never be higher than it is today unless we do something dramatic to keep these customers returning to our service drives for all of their maintenance needs.

The situation isn’t improving, so here are my recommendations for handling disappearing maintenance jobs:

  1. Do a work mix study. Look at the frequency of visits by make and model year, and what types of services are the most common, by the frequency of opportunity, coming through your service drive. Identify which maintenance services are not being presented or sold, and determine why.
  2. Review your current maintenance menu strategy. Does it align with your manufacturer required maintenance intervals? Even if your manufacturer uses some oil service or maintenance reminder algorithm, the maintenance service intervals are still predictable. Keep your menu simple, easy for both the advisor and customer to understand, and build the menu packages in “common sense mode.” Use “good-better-best” pricing strategies for factory and dealer recommended services, and make sure you involve your advisors and technicians in the menu building process. If they don’t buy in 100%, I assure you they will not present 100%.
  3. The menu should be shown at the time of vehicle sale with a personal introduction to one of your service staff. The intervals and included services should be reviewed and the first service appointment scheduled before the customer leaves the store. This process should also expand to include menu presentations to 100% of existing customers who come to your dealership for service, either during the interactive walk-around if the client is in for routine scheduled maintenance, or during the active delivery to set customer expectations for the next service visit.
  4. Always set the next service appointment during the active delivery process. Do this by gauging the next service due interval based on historical time and mileage between services using the vehicle service history. Create a point of reference for follow-up with your customer—just like your dentist sets your next appointment before you leave her office after every check-up. When implementing this best practice at your store, you must also develop a process for follow-up with each of these customers several days before their scheduled appointment to verify they are still on track for the service visit. This gives us the opportunity to adjust the appointment date or time, if necessary, and will greatly reduce the number of “no-show” appointments for our advisors.

Maintenance has become an endangered species, but it won’t become extinct anytime soon. Take a proactive approach to identifying missed opportunities, and look carefully at your strategy moving forward to maximize what business already exists. Plan your work, and then work your plan.

Need more help breaking down your work mix and identifying opportunities for improvement? Join Rick and the other NCM experts at the NCM Institute for classes such as Principles of Service Management I, II, and Mastery.

Permanent link to this article: http://blog.ncm20.com/2016/06/endangered-maintenance/

Steve Hall

Curing the Fixed Ops Hangover

Monday morning again

What a party it was! We showed up, had a great time, talked excessively, drank a bit too much, stayed out far too late and were glad that we did it.

Glad, that is, until the next morning when we woke up and had to face reality. Now, our head hurts, our body aches and we don’t want to go to work! The only reason that we actually get out of bed and go to the office is that we are afraid of the consequences if we don’t. We resign ourselves to the mantra, “Just make it through the day.”

Hangovers aren’t just post-party events—they happen in Fixed Ops, too.

The idea of “Just making it through the day,” can occur in any aspect of our lives. You’ll often see this attitude pop up in Fixed Ops departments after month end.

Just think about it. At the beginning of the month, does your service department get off to a sluggish start? I’ve typically found that work in process is low. The team is feeling the “hangover” effect of closing repair orders while looking for those last dollars to finish the month. Many dealerships have a light appointment schedule around this time, too, as they pushed customers into those final days.

Reacting to this environment, employees just want to take a day or two to catch their breath. As a manager, you can just feel the entire department is coasting. It’s as if they too, have also adopted the mantra, “Just make it through the day.”

What causes the Fixed Ops Hangover?

If you were to review the typical advisor’s monthly sales on a weekly basis, you would find that the sales aren’t spread out evenly. Rather, the advisor sales distribution curve usually looks like this in a four-week month: 15% the first week, 25% the second week, 25% the third week and 35% the last week of the month.

It’s a cycle that feeds on itself. And whether this uneven workload is caused by the month-end hangover effect or a combination of it along with the advisors not closing tickets until the end of the month, it is a major problem.

Stopping the Fixed Ops Hangover

So, how can a manager stop this monthly hangover? I recommend motivating your service advisors with a “fast start” spiff. This could be a monetary bonus or another reward to any advisor who hits a pre-set objective for the first seven calendar days of the month. The idea is to keep your department rocking from the very first day of the month, rather than losing the first couple of days while everyone relaxes after the close.

The spiff can be set at different levels for various types of advisors; you can set different goals for the main shop and express, rookies and veterans, as long as they must work to achieve it.

No matter what goals you set, make sure they are challenging enough that the “just make it through the day” attitude cannot pay off. This spiff can not only be used for advisors but can be incorporated with your technicians’ compensation, also. Be creative, and get out of the starting blocks strong—right from the very first day of the month!

Do your service advisors and staff suffer from the “Fixed Ops Hangover?” Tell us about it below. How did you solve the problem? 

Permanent link to this article: http://blog.ncm20.com/2016/05/curing-the-fixed-ops-hangover/

NCM Associates

#AskNCM: What are the benefits of express service?

Is express service worth it? Fixed ops expert Steve Hall sums it up in one word: Yes.

If you aren’t giving customers a reason to come back, you’re just handing them over to the aftermarket places. Not only does express improve retention, Steve explains, but it can give your shop other valuable benefits.

Find out why Steve Hall says you need an express service:

Do you offer express service? Tell us below how it has impacted your customer retention! Want to #AskNCM a question? Leave a comment below, and we’ll answer it!

Permanent link to this article: http://blog.ncm20.com/2016/04/askncm-what-are-the-benefits-of-express-service/

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!

Permanent link to this article: http://blog.ncm20.com/2016/03/askncm-my-service-advisors-cantmeet-at-the-same-time-how-can-i-train-them/

George Gowen

Who’s your dealership’s MVP? The answer may surprise you.

Auto Mechanic

Take a look at what department affects your business the most. I know— “Nothing happens until a car is sold!”—is the answer heard the most. But what department has the most contact with your customers? Where is the opportunity to create customers for life? And which department displays your culture to your customers most often?

So who is the MVP? I’ll give you a hint: It’s not in sales.

The average salesperson sells 10-15 units a month, while a service advisor sells service to 15 customers EACH DAY! Now consider the relationship of sales dollars to gross profit dollars: Who can create 70% or more gross to sales from an inventory that has no holding costs?

Customer retention happens in the service department

Now, let’s look at the one position in your business that’s most influential in building loyal customers. A salesperson’s ability to retain that customer cannot be discounted, but often, little to no effort is made to improve retention. And there’s certainly little done on a daily basis. The service advisor, however, can make or break your relationship with the customer dozens of times each day.

Create an outstanding service culture

What people within your organization have the most opportunities to create “WOW” moments? Who displays the culture of your store to the most customers daily? Who creates the most “customers for life”? So where should you focus your training, coaching and motivating? That 80/20 rule comes into play here.

Go spend time in the service drive and see who wins your MVP!

What do you think—is customer retention made or broken in the service department? What strategies have you implemented to make the most of this relationship with the customer? 

Permanent link to this article: http://blog.ncm20.com/2015/12/8089/

Steve Kain

What’s the Score?

Wrenches

Just imagine. It’s a glorious fall night and you’re the quarterback, racing for the end zone. Lungs aching from the run, you finally make it: touchdown! You look at the scoreboard to see the score: -/-. What?

That’s right. Nothing. No score. All that work, and no idea how much it may have affected your team! Did you win? Are you losing? Without results, you have no idea.

Don’t know the score? Then, you’re losing the game.

Far too often, I’ve found that dealerships leave their staff in the dark when it comes to performance. Not only is it confusing for your personnel, this tactic makes it hard to determine a clear strategy for success.

Monitoring the current state—and sharing it daily—gives you concrete data to guide your decisions and clear metrics by which to hold your staff accountable. It’s only when they see the reality of their performance that they can improve it.

Prepare for victory.

First, let’s consider how you can use a scoreboard to help with advisors. Things I like to track include, customer repairs and customer pay dollar sales in both labor and parts. It’s also good to monitor the closing percentage on both menu opportunities and additional service requests, follow-up sales, number of warranty repair orders and customer satisfaction numbers.

Next, let’s score the technicians. There’s a lot you can track here. You definitely want to know the daily number of repair orders, how many hours were billed and productivity per tech. Other things to consider are how many additional service requests were generated from multi-point inspections and the number of comebacks. Lastly, and maybe most importantly, monitor customer satisfaction numbers.

Moving on, I also like to look at parts and service holistically. The key to this is tracking fill rates. After all, isn’t there a much greater chance a customer will say yes to the advisor when the part is in stock? I’ve even found dealerships that pay incentives to parts personnel based on technician productivity, because service can be negatively impacted by time wasted at the parts counter.

But don’t base parts’ score just on others’ performance. You want to note both total parts sales and also the gross profit margin of parts sales both individually and as a group. And, like I mentioned before, keep an eye on the fill rate for parts requests. It may also be beneficial to track the dollar amount of special order parts in the special order bin because those parts mean both parts and labor sales.

Make your own playbook.

Don’t be limited by my suggestions! If you want to improve numbers in your dealerships, start tracking them and developing an improvement plan. If there’s a number in the dealership that you want to improve, just track it and it will change.

Alright, Coach—are you ready to get those score boards up? Tell us your objectives and share how you plan to rally your team to a victory this month.

Permanent link to this article: http://blog.ncm20.com/2015/11/whats-the-score/

Steve Hall

Two Quick Tips for Service Managers

Auto Mechanic

It seems these days everyone is pressed for time and running a million different directions. Because of this, your team can feel disconnected and often times alone in their jobs. They don’t get quality time with their supervisor and never get to really hear what is going on in the department or business. They have questions like, “are we doing well or not,” and “am I doing my job to your satisfaction, “or ”am I about to be the next ex-employee?” Most of the time employees don’t actually ask these questions; instead the questions just keep floating around in their mind.

It’s a shame when valued employees feel this way. After all, it doesn’t take a lot of information or interaction to make these questions disappear. With this in mind, today I would like to give you two quick tips you can implement, with no added expense. These two items can possibly help your employees feel more informed and secure in their jobs.

The first tip is the monthly wrap-up and kick-off meeting. According to Marcus Buckingham and Curt Coffman in the book First Break All the Rules, one of the key components to employee retention is making the employee feel they are part of the information stream within the business. One way to help your team with this is to hold a monthly kick-off meeting.

On the first day of the month, bring your departmental team together for a quick three to five minute kick-off meeting. Think pre-game speech for the professional sports team. This meeting can be held right in the service department around the lifts and vehicles during normal business hours. Have the attendee’s stand, so the meeting stays short. For the wrap-up part of the meeting, let them know how the prior month finished up. Cover items like departmental gross profit, or shop hours versus objective, and be sure to cover CSI. Don’t forget to congratulate a few employees that had stellar performance

For the kick-off portion, set the goals for the month that is starting. Be sure to acknowledge upcoming employee anniversaries and milestones. Include anything that is upbeat and challenge the employees to reach the goals that are set.  Giving just a couple minutes of your time, combined with the key information that is shared, will make the whole team feel like an integral part of the organization. This meeting costs nothing, but has a lot of value. By doing this you can bring the team together, and win together.

The second tip I would like to share today is coaching from the sidelines, not the locker room. I think that is worth restating. Do you coach from the sidelines or the locker room? Let me explain what I mean. You would never see a NFL coach hanging out in the locker room while the game is being played. They are found watching the action as it happens and coaching everyone on the team to perform better.

Now, put this into your everyday work life in the service department. Game time for the service department is every morning from about 7:30 to about 9:00. Where are you during this time? Are you hanging out in your office running reports, answering e-mails and reviewing numbers? That would be considered “in the locker room”. Should you be on the “sideline” watching the game and coaching the team while the action is happening? Yes.

Is there really anything more important to a leader than helping their team perform better?  Wouldn’t this also help the employees better understand how they are performing in their jobs? Keep this in mind each and every morning and spend the time directing the team, when the game is actually happening, then perform the behind the scenes work during the non-peak times of the day.

Remember that your team moves at the speed in which you lead them, and to lead you must be in front of them. Don’t focus on the wrong items. Put your efforts into your people and unleash the power of the team.

service_mgmt

Permanent link to this article: http://blog.ncm20.com/2015/05/two-quick-tips-for-service-managers/

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