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Tag Archive: Accountability Management

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/

Rick Wegley

Wagging the Dog: Don’t let a 5% problem ruin everything

Over the last several years, I’ve visited hundreds of dealerships. And, while performing operational assessments, I discovered that the majority of the headaches plaguing the culture and profitability of my clients were self-inflicted.

The problem with too much regulation

Intending to control unique and infrequent variables—and keep them from disrupting their daily routine—I found managers who kept adding steps and reducing employee empowerment. They chose this approach in lieu of defining the structure of the fundamental process, then documenting and training employees on it.

You can map out only so many scenarios. No matter what, unpredictable and uncontrollable variables will appear in nearly every customer service or sales environment.

Ultimately, managers created hurdles that made their jobs easier. But these limitations severely curtailed their employees’ ability to meet objectives and take care of customers. Most importantly, they completely changed their overall process in an attempt to manage the 5% of unique variables we call exceptions within their business model—and, in doing so, negatively impacted the 95% majority of the customers. Worse, they even created culture problems within the store!

Variables are unavoidable

So many processes changed. And, yet, these managers still were unable to avoid the unpredictable and uncontrollable variables that come with doing business.

By trying to control everything, most created new problems along the way. Now, they spend an inordinate amount of time and resources trying to manage a department with ineffective processes for handling the majority of their day to day operations.

Employee morale is low. Customer satisfaction suffers. And the department isn’t meeting its objectives. There’s pressure from above to “right the ship,” and these managers are unable to identify the root cause of a growing problem.

Manage by the RIGHT numbers

You should definitely manage by the numbers, but make sure you’re using the right ones.

Take a good look at your current structure and re-evaluate your current processes— simplify wherever possible. Involve your employees. And solicit feedback from both them and your customers on what is working well and what they feel needs improvement.

Once you have simplified and streamlined your processes, put them in writing. Hold meetings with all of your employees and make sure they all understand the revised processes. Provide the necessary training and resources for employee success. Definitely let them know what the empowerment guidelines are and the accountability aspect for each individual role. And clearly explain the minimum acceptable standards for performance.

Don’t forget the “why” part of this equation when discussing any changes with your employees. Discuss some contingency plans you have considered for the exceptions, and then review the empowerment tools that you have provided for them to use. Give examples of how and when they should be used.

The 5% goal

Manage 95% of your business by process, and then manage the 5% of exceptions. Once a clearly structured business model is in place, a manager should need no more than 5% of their time managing unpredictable and infrequent variables. This ideal state requires simple, defined processes (in writing) to manage the majority of predictable and measurable daily activities that contribute to profitability and customer satisfaction.

Is the tail wagging the dog at your store? If so, take a good look at your current structure and re-evaluate your processes. Chances are 95% of your problems are self-inflicted.

Tell us how you manage exceptions in your business? Is it a 95/5 mix or something different? Comment below with details. 

Permanent link to this article: http://blog.ncm20.com/2015/09/wagging-the-dog-dont-let-a-5-problem-ruin-everything/

Richard Head

Is Story Time Causing Your Dealership Turnover? FIRO and MBWA Can Stop It

open boo

One of the biggest expenses dealerships face each year is turnover. Not only does finding a new employee take a lot of time and money, but you then have to reinvest in proper training to get that new person up to speed.

I’ve found that dealerships – like many other complex work environments – are negatively impacted by assumptions, something I like to call “story time.” Before I go into the details of how story time ruins your employer-employee relationships and leads to turnover, let’s take a second to review what motivates people in the first place.

Motivation in action: FIRO

Developed by observing well-oiled, capable teams working in high-stress situations, the Fundamental Interpersonal Relationship Orientation (FIRO) approach boils people’s fundamental behavior down to three desires:

Inclusion.  Everyone expresses or wants contact with others—to be around others and work with others.

Control. Everyone expresses or wants influence over things and people.

Openness. Everyone expresses or wants to be known, seen, appreciated—a curiosity about others and a willingness to be seen ourselves.

This chart shows how each area relates to the others:

Blog graphic

For managers who typically can’t create a team from scratch based on compatibility, we have to focus on the thing we can change. Will Schutz – the psychologist who invented the FIRO method – says that creating an environment that encourages openness is the best method. And openness is what story time is all about.

It’s story time

First, let’s address openness. I’m not talking about some touchy-feely “new-age” thing. Instead, “openness” means a willingness to consider other interpretations of behavior.

Whenever something happens to us, we almost always make up a story about it. Unfortunately, most of the time we don’t make the effort to check out our made-up story. We simply create this fantasy world about what’s going on. As time goes on, those stories get hairier and stranger.

Just think about the last time you were baffled by something your boss said. You probably found yourself thinking, “I bet they’re irritated with me,” or “They probably think that ….” In reality, you just don’t know what’s happening with your boss. But your brain doesn’t like uncertainty, so it’s compelled to make up a story that gives you some understanding. And our people do the same about us!

Story time has a huge impact on businesses. Dealerships (and all businesses) are composed of multiple, competing stories about what’s going on and why—stories that are rarely discussed openly and almost never examined in a way that could prove or disprove the stories. Left to run unchecked, story time can give your best performers misinformation, and lead them to walk out the door.

Putting story time to bed.

In work relationships, we have two choices:

  • Let people make up stories about what is going on with us
  • Tell people what’s actually going on, so that they stop making up their own stories

As a leader, you set the tone.

When you stay holed up in your office, I can guarantee that your staff is making up stories trying to understand your decisions.

“Management By Wandering Around” (MBWA) is a great way to stop story time in its tracks. And, what better way to interact with the dealership?!

When I get out into the departments, I share with my staff what’s going on in the department, what’s keeping me up at night … and, critically important, what my hopes and dreams are for the dealership and the department. As an added bonus, the employees relax a bit and tell me things they might not in more formal situations. Everybody wins! And everyone stops inventing stories.

Give it a try in your dealerships. Manage by “wandering around” and find out what’s really going on. Stop the stories and deal with facts! What do you have to lose?

Permanent link to this article: http://blog.ncm20.com/2015/08/is-story-time-causing-your-dealership-turnover-firo-and-mbwa-can-stop-it/

Dustin Kerr

Do You Have a Business… or Just a Job with More Risks?

dealership

When I was operating dealerships in Northeast Oklahoma, there was a little hamburger joint that had some of the best hamburgers and fried squash I had ever eaten. At the expense of my girlish figure, I would attempt to eat at this burger joint about once a week. The odd thing about that burger business is that some days it would just be closed for no apparent reason. Sometimes, it would stay closed for a week or two at a time before opening back up.

We had one of the employees as our customer, and one day, I asked her what the deal was with the restaurant being closed at such odd intervals. She informed me that the owner was elderly and when he was sick or had medical procedures that he would just shut the restaurant down because he had never taught anyone else how to run the day-to-day operations. It struck me that this gentleman appeared to have built a great business with a great product, but in reality, he didn’t have a business, he had a job with more headache and risks.

You may be asking yourself what this has to do with the car business.

Well, since you asked…I recently had the opportunity to attend the NIADA convention in Las Vegas and had the pleasure of meeting a lot of independent car dealers and talking with them about the 20 Group peer collaboration concept. Many of the dealers had no idea what a 20 Group was and were very excited to potentially join a group and learn from others going through the same challenges. Everything was great until I told them we meet three times a year for a day and a half. I heard the same objection over and over again and it went something like this: “It’s all I could do to get away to this conference. I’m scared to death about what’s going on while I’m gone. There’s no way I could commit to three days, three times a year to attend meetings away from my dealership.”

Albert Einstein once said, “The definition of insanity is doing the same thing over and over again, but expecting different results.” The question is: can your dealership afford to continue facing the same challenges without viable, proven solutions?

Just like the gentleman that owned the hamburger joint, these used car dealers did not have a real business, they had a job but with more risks and a lot more headaches. As business owners or upper management, you put in a lot of hours, have a lot of investment at risk, and must overcome never-ending challenges from customers, competition, and regulators. Some people think the best way to manage all those obstacles is to just do everything yourself. It’s not. In fact, trying to manage it all yourself is a recipe for disaster. It is critical to the success of your business and, more importantly, your health, to find or identify people in your organization that can help you run your business when you need to be away, whether that is for a 20 Group meeting, illness, or simply taking a vacation.

Remember, your primary job as a manager or leader is to train and manage activities. If you are scared of what might happen if you had to be away from your dealership for a few days, you might ask yourself “Do I have a business or just a job with more risk and more headaches?”


Learn more from Dustin Kerr:

bhphtraining

Permanent link to this article: http://blog.ncm20.com/2015/07/do-you-truly-treat-this-as-a-collections-business/

Alan Ram

Education, Simulation, Accountability

whiteboard

For training to be effective three elements need to be present; you need to have:

1. Education

2. Simulation

3. Accountability

Education, simulation, and accountability! Let me just expand on this. If I want to train in golf, I don’t just watch golf on TV. While watching golf on TV I may become educated in golf, but then I need to train through simulation. I would need to go out and hit bucket after bucket after bucket of balls to get good and stay good. The day I stop practicing (simulating) is the day my performance starts to suffer. But then where am I held accountable? On the scorecard!

How many statistical categories are golfers held accountable? Obviously, there’s your score but there’s also putting average, greens in regulation, and driving distance. How many statistical categories are baseball players held accountable? If I’m a position player, obviously batting average, fielding percentage, slugging percentage, and many more. As the dealer I also need to hold my people accountable. While most dealers can tell you how many cars they sold last month, how many new cars, how many used cars, how many certified, it’s surprising how many dealers can’t tell you how many overall opportunities they had. The way we improve is not by looking at how many cars we sold last month; it’s by focusing on what we didn’t sell!

Let’s talk about phone-ups for example.

Do you know exactly how many fresh sales calls your dealership received last month? Of those callers, how many actually visited the dealership at least once? Many of you (and it should be all of you) have call monitoring, that’s great, but make sure that there are no holes or gaps in your recordings with customers calling on your local number. Those calls need to be switched over to a recorded line. Everything needs to be recorded! Recording 80% of your calls is not sufficient! We live in a day and age of incredible accountability and we need to be making sure that we are taking advantage of it.

Let’s talk about the role your switchboard operator plays.

Your switchboard operator is an integral part in your dealership’s accountability when it comes to handling inbound sales calls. No CRM or automated system alone can get it done. What I’m going to go over now are just a few pointers and tips to help you hold your people accountable. First off, logging is mandatory. Some dealers will tell me that they ask their people to log calls for protection. In other words, if the call is logged under a specific salespersons name, that sales person is protected for 72 to 96 hours or whatever time frame is designated by yourself, or the dealership.

Let me run through a quick scenario: Bill takes a sales call. The caller asks about a 2011 Honda Accord that you have listed on Auto Trader. Bill promptly informs the caller that it is sold, and the call ends. Bill could not care less about protection and he knows that the caller he just spoke with won’t be coming in… Actually, he’s insured that. At the end of the day Bill is only going to log the callers that he thinks that he has a chance of showing up. In other words, your sales people are only going to log their successes. That would be the equivalent of having baseball players track their own batting averages, but if they strike out or fly out, they probably won’t count that one.

Every call gets counted. Not by the sales people, but by the switchboard operator. I guarantee you, your switchboard operator can and needs to do this. If Disneyland can tell you exactly how many people came to see Mickey on a daily basis, you should be able to tell how many people called you on Explorers today.

It all boils down to training and more than that, proper training!

  1. Education
  2. Simulation
  3. Accountability

Make sure these three elements are present in your training game plan in order to be effective. Training isn’t something you did, it’s something you do!

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Permanent link to this article: http://blog.ncm20.com/2015/05/education-simulation-accountability/

Robin Cunningham

Will You Take The Six-Month Challenge to Maximize Your Profits?

Leadership Most Monday mornings I find myself standing in NCM Institute’s beautiful training facility welcoming a new class of retail automobile dealership managers who have come to Kansas City for formalized training specific to their job responsibilities. After introductions, I tell them something like: “We won’t be talking about what you think you have come here to learn until just before or after lunch.” I tell them we are going to be learning about Accountability Management and Leadership first. I tell them they likely have some pretty good plans and processes at the dealerships where they work, and if they had already mastered accountability management they would be even more successful than they are now.

And because they are going to be returning to their dealerships with lots of new knowledge, processes and metrics to be paying attention to, some of which will require some significant culture change to not only install but to instill, it will become imperative for them to begin mastering accountability management to fully realize the return on investment for all the time and effort they will be putting in over the course of the training.

Recently, we graduated our third General Management Executive Program (GMEP) class. This is the NCM Institute’s premier program for educating automotive dealership general managers. We were on the last day of the 11-month course, talking about what they had learned, what processes they had put into place, what successes they were having…and it became clear, as would be expected, there had been “process evaporation” in some areas. On the spot, I kind of made up the “Six-Month Challenge to Maximize Your Profits.”

I said to the class, “Reflect on where you are right now in all your departments in terms of sales, gross, expense, inventory aging, training and personnel productivity. Then when back at your dealerships, be sure to go over the 30 items on the Used Vehicle World Class Checklist with your used vehicle team and get buy-in to all the processes. Also, go over the 35 items on the Service Department World Class Checklist with your service team and get buy-in.”

“Now imagine it is six months in the future. You have put into action and are now seeing the results from the consistent application of the disciplines learned during your GMEP experience, including:

  • Daily Save-a-Deal and Make-a-Deal Meetings
  • Daily Trade Walk and Stock Walk
  • Daily salesperson one-on-ones
  • Weekly manager meetings to go over all the relevant forecasts, trends and metrics, discussing what has been working and what has not been working in each department and why
  • Measuring the price-to-sale gap on each used vehicle sold and also calculating the ROI  on each one
  • Coaching your service manager and helping transform your service department from a fix-it-and-smile operation to a selling operation
  • The ‘road to a sale’ is well entrenched on the service drive (yes, service drive!)
  • Your multi-point inspection process has generated increased amounts of additional service requests
  • Your percentage of competitive service work has increased AND your effective labor rate is increasing
  • Your customer retention efforts are really paying off”

OK…OK…I have to admit… I did not make the Challenge that long or comprehensive, although this just scratches the surface of what we covered over 11 months.

I could see in their eyes and by the nodding of their heads that I had made my point.  If one was to cover all those bases systematically, day in and day out, and if rarely did more than a 24-hour cycle go by where most processes were performed, monitored and enhanced, increased productivity and profitability are virtually guaranteed!  That is easier said than done for sure…and that is why we start and end each class with Accountability Management and Leadership.

We find for some managers the elements of the Six-Month Challenge are a timely reminder. We find for most, however, it is their first exposure to an approach that can truly help them become the effective leaders and managers they really want to be.

To learn more about the NCM Institute’s General Management Executive Program, click the link below or call 866.756.2620. Enrollment is currently underway for the next GMEP, with sessions starting August 5, 2013.

Permanent link to this article: http://blog.ncm20.com/2013/06/will-you-take-the-six-month-challenge-to-maximize-your-profits/