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Tag Archive: Automotive Management

Jessica Kain

Three Tips to Improve Your Digital Marketing

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Are you spending a lot of money each month on your digital marketing and internet operation but not getting the return on investment you want? It’s a common problem.

Without the right plan, marketing investments fail

Every day, dealers spend thousands of dollars to improve their website, do search engine marketing and buy every lead source and product in the market. Sadly, though, most dealers struggle to break even on their investments—their close rate is poor, and morale is broken!

Understand how clients shop to improve your marketing

None of us can argue that 100% of our opportunities come from our marketing; however, all of our results come from having an efficient and fail-safe process. Process and communication tactics are not always the shiny objects that dealers chase or want to talk about, but they are the only way we will meet and surpass our goals for our internet operations.

When creating your tactics, remember that the internet has changed the way we all live and operate. And, especially for auto shoppers, the vast availability of information about products has made customers incredibly smart and selective buyers.

3 ways to immediately improve your digital marketing

Fortunately, you can capitalize off these trends and make an immediate improvement to your digital efforts with the right strategy.

Here’s what I recommend:

  1. Go where they are. There are more than a billion websites, so discovering where your clients spend their time and putting your marketing there is key.
  2. Recognize the wealth of information available to them. Buyers research—a LOT— before making a purchase. Your marketing should speak to them respectfully and give them the information they need.
  3. Be real. Social media plays a significant role in the purchasing decision, with most people relying on their social networks to guide their choices. Don’t be afraid to include social media in your marketing mix, but be critical about choosing the right channels and voice for your dealership.

If you or your team members are looking to improve your internet or BDC operation for the better, then please join NCMi and Kain Automotive for a workshop on Mastering Internet Sales. We will provide you with an understanding of today’s digital-savvy customer and how to read the leads that hit your system. Working together, you’ll learn a proven, fail-safe process to improve digital marketing, and come home with the best communication tactics to engage your customers. The basis of this course is to set your dealership up to better connect, appoint, and sell today’s internet shoppers.

Permanent link to this article: http://blog.ncm20.com/2015/12/three-tips-to-improve-your-digital-marketing/

Robin Cunningham

What Does a General Sales Manager Do Really?

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At the NCM Institute we conduct our Principles of General Sales Management I & II classes about every other month. They are often two of our most attended classes, so there’s lots of energy, and we are working with Variable Managers who have had some years of success in order to have claimed the title of General Sales Manager.

Often, even before introductions, I will ask the class something like: So exactly what is a General Sales Manager? Is it someone who has more experience than the other Sales Managers? Or someone who can cover for the Used Vehicle Manager or F&I Manager on their days off?

We get a lot of looks like: Is this a trick question? Or is there something else we are missing? It for sure depends on the size of the store. In some bigger stores the GSM might very well have had success at the New Vehicle, Used Vehicle, and F&I Management levels; and he or she is in a position to oversee the other Variable Managers. In smaller or medium sized stores the GSM may not have had that same breadth of experience. Or in the case of Used Vehicle Department, they may not have had much experience managing the used vehicle challenges in the Internet era, where everything has changed.

We find there is very little commonality in what a General Sales Manager is and exactly what they are responsible for. So we tell our students that the way the NCM Institute approaches this is that they are the “General Managers of Variable Operations.” That sure sounds like a cool title to have, but what exactly does that mean?

As with every class we teach we start with the discussion of Accountability Management & Leadership. This takes most of the first morning, especially since we are now talking about individuals who will be leading, coaching and managing every aspect of Variable Operations.

Within Accountability Management we refer to the Six Primary Elements of Accountability, and they are:

  1. Planning your work and working your plan
  2. Clearly defining and communicating your expectations
  3. Inspecting what you expect
  4. Measuring what you intend to manage
  5. Rewarding positive results and responding to negative results
  6. Developing and implementing a systemic structure

By this point in time, most of these managers realize they are in for a very different experience than they had anticipated. We then dive into their numbers using the NCM 20 Group Composite and Profit Trend Analysis tools. We start looking at New and Used Vehicle retail unit sales, year over year; per vehicle retail gross, year over year; total New and Used gross, year over year; net F&I income, year over year.  Then we look at several expense categories like: Advertising, Selling Expenses, and Employment Expenses, year over year. How are we trending? Do we know? What are our strategies, based on the knowledge we do have?

After the Financial Management discussion (which we often call “A Punch in the Nose”), we circle back to a full discussion of the second Element of Accountability Management: Clearly Defining and Communicating Your Expectations.

We start this discussion by asking if any of the students’ dealerships has a current organizational chart in use; written job descriptions and objectives; and are any of the processes they use, like the Road to a Sale, in writing? We get them to reflect on just what tools they really have in place to lead, coach, train and manage with. By this point they realize we have huge upside opportunity for improvement and we still haven’t actually begun to talk about what they thought they came to us to learn.

Then we move into the discussion of Opportunity Management and Prospecting. We begin breaking down the sources of all of the Opportunities to do Business. We agree there are four sources:

  1. The walk-in customer
  2. The in-bound phone call
  3. The in-bound internet lead
  4. The salesperson self-generated lead (be-backs, repeat/referral, circle of influence, etc.)

We show them how each category has its own closing ratio and per vehicle income opportunity. We spend a couple of hours showing them how they can help their people focus more on the self-generated leads, which close at 50%, so they can start weaning them off the dealership-generated leads that most salespeople (and sale managers) count on for most of their sales.

Then we get into the discussion of Recruiting and Orientation which elicits some really great conversation. Then we spend a lot of time discussing Training Disciplines and Techniques. Because most of the managers in our GSM class have had quite a bit of experience, the level of interactive discussion amongst themselves, is the most we have in any of our NCM Institute classes. And we know from the evaluations from our students that they value the content of these in-class discussions as much as everything we bring to their attention.

We then wrap up the class with the (much-needed by this point) discussion of Time Management. They are wondering how in the world they are going to be able to fit all of these new, critically important ideas and processes into their daily, weekly and monthly schedules. They come away knowing it’s all very doable, if they make the commitment to begin mastering Accountability Management. They have written a number of Guarantee of Action Plans that will be sent back to their GM or Dealer to begin the buy-in and then implementation process. They can clearly see how they and all the other Variable Operations team mates they lead, can become increasingly more productive and profitable.

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Click here for information on all NCM Institute classes.

Permanent link to this article: http://blog.ncm20.com/2015/09/what-does-a-general-sales-manager-do-really/

David Spisak

Is Your Dealership Ready for an Automated Data Management Solution?

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Dealership data management systems collect and maintain mountains of data about your operation, your customers and your market. There is no doubt about the value of the information contained in those systems in enabling you to make the best possible decisions for improving your sales, retaining your customers, and increasing your dealership’s profitability. But what confounds many dealers today isn’t an issue of having data… it’s how to ensure the data is accessible, accurate, and is presented in such a way that it allows you to focus on the areas of your operation that need your attention. No dealer would willingly give up the data his dealership holds, because he knows it is absolutely vital to knowing what’s going on in the dealership and how effectively that activity is driving the sales it needs to sustain the operation.

But if you can’t get to the information you need, when and how you need it, it’s not going to help you drive maximum sales, efficiencies and profitability in your dealership. When you consider the implications of this across multiple locations with multiple systems, the problem seems almost insurmountable without hours and days spent compiling all this data into useful reports.

So you’re hearing about automated dealership data management and think this may be the solution to a big chunk of your problems. And just so you know, I’m a huge proponent of using smart systems to get a handle on all this information, especially when it gives me an out-of-the-box reporting solution that will help me spend my time managing intelligently, rather than creating spreadsheets and seeking out and inserting the data I need to put into them. But how do you know if you’re ready to take that leap? Here are a few thought-starters to help you determine if you’re ready… and to consider the risks if you don’t.

Does your data give you complete transparency to your operation?

If you’re one of the few dealers who feels very confident that the information you are using to keep your finger on the pulse of your operation is as timely and accurate and gives you the information you need to make immediate adjustments in the daily operation, you’re one of the lucky ones. However, most dealers do not have the confidence that they are seeing everything that’s happening in the dealership. What’s more, many worry that the information they do use is not accurate, either because it’s been filtered or because the data in the DMS or other systems from which they are being pulled isn’t as “clean” as it should be. The risks? The worse scenario is that you’re dealing with manipulated data and the possibility that someone is intentionally trying to misdirect you. At best, you don’t have a complete picture because you or your managers haven’t thought to bring some of the most critical pieces of information into consideration.

How easy is it to access the information you rely on?

Even more troubling is that while dealers and general managers do not have formal training in information systems or database management, they take it upon themselves to acquire, maintain and utilize their systems resources to the best of their ability. In their defense, for many years, the basic functionality of most DMS platforms hasn’t changed that much. And thoughtful dealers will study reviews, talk with their peers, and sit through hours of features and benefits presentations where they are shown all the bells and whistles of this system or that, with the expectation that the vendor knows what they need and will deliver on its promises. What do dealers need from their systems? They want easy-to-use systems that will collect the data they need and present that data in useful reports that will help them make great decisions. It’s a simple, straightforward objective, but what we’ve found to be consistently problematic among all DMS platforms is the part about getting the data out of the systems in usable formats for making great decisions. It’s your data, but there is a risk that the vendor does not offer you complete access to the information you need. And decisions made on incomplete information can be worse than making decisions with no information at all.

How confident are you in the accuracy of your data?

“Garbage in, garbage out” is another common problem business owners and their managers deal with continuously…the information you get out of your systems is only as good as the data that’s going into them. I’m sure there have been many times when you found yourself questioning whether the information in your reports was correct. It’s frustrating, but essential that the information you’re using is “bullet proof,” so you find yourself going back and forth with a manager questioning, discussing, and reviewing the data until you’re eventually satisfied that the information is accurate enough that you can make a good decision. That could take several hours or several days for each report you question.It’s a real drain on your time and energy, and the kicker is that you probably still don’t have complete confidence in the information you’re using! In terms of your time and attention, your manual reporting processes could be costing you much more than you realize.

Can you get updated information quickly and as often as you need it?

Even if the data going into the dealership’s systems is as accurate as it can possibly be, there is yet another problem that some dealers may not admit they have: They simply don’t have an effective data analysis discipline. Relying on standard reports and what’s always been done, some don’t know that other information will give them better insights to make the critical adjustments that can result in the most net profit by month end. And they don’t know how often they should be watching that information. And even if they wanted to keep their finger on the pulse of the dealership’s daily operations, they quite likely wouldn’t (or couldn’t) be able to get to the most up-to-date, reliable information as quickly as they’d need it. In fact, our data suggests that the average dealership report usage is 800 report views a month. When you consider the average time managers spend preparing and updating a report is about 15 minutes, that’s a lot of manager productivity lost to manual reporting. A more efficient and effective discipline would be to have all the updated information you need in a matter of seconds…not hours or days. The risk associated with the reporting lag-time described here is that you aren’t effectively making the adjustments you need to be making to have the greatest impact on the month-end net profit of the dealership.

Does any of this resonate with you? Are you feeling called-out a bit?

You are not alone. In fact, you’re in the majority. As I said, most dealers we talk with about data management best practices are experiencing one or more of these problems, and most are feeling the pain of all of them. Want to do a quick gut-check on the wasted productivity your dealership may be experiencing for lack of an automated solution?  Check out the Productivity Calculator to see what manual reporting may be costing you. Then schedule some time for a demo with a data management solution provider like NCM axcessa today.


Learn more in this upcoming course, taught by David Spisak:

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Permanent link to this article: http://blog.ncm20.com/2015/07/is-your-dealership-ready-for-an-automated-data-management-solution/

Robin Cunningham

Have You Put in Your 10,000 Hours?

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I don’t know about you, but I read a lot of books.

Recently, I was covering for Steve Hall, who had to leave town on business at the end of one of his classes. The class had just started taking their exam. I didn’t have my laptop with me, so I didn’t have anything do for 45 minutes. We have several bookcases at NCM, and one of those is right outside the classroom. So, I walked over to it to see if I could find something interesting to read to keep me occupied while the class finished their evaluations and final exam.

I started scanning the books to see which title or author might jump out at me and I noticed several Malcolm Gladwell books. For some reason, I picked up Outliers: The Story of Success and began reading. An outlier, by definition, is a person or thing situated away or detached from the main body or system.

As the title suggests, it includes many “stories of success.” There are many stories of success in the retail automotive business. I think, though, that there are more stories of failure.

In many of my classes, I do a little exercise. I ask everyone to go back to their first car sales position and remember all the people who were on that staff or started at a similar time. I ask them where those people might be right now. When they think about it, they all agree that most of them are no longer in the business at all. It’s not that they are all at other dealerships; they must be in some other job or career. They then agree that they (including me) are the lucky few. We somehow liked the car business enough and were good enough that here we are all these years later, still in the business and trying to get better at it.

The book, Outliers, has many amazing stories about success in a number of different fields that have no connection to each other. The common denominator in each story, though, was each individual’s or group’s experience in getting in their 10,000 hours of practice time, in order to become phenomenally successful.

The first stories of success come from the world of violin players. They were broken up into three groups. The first were the stars, the students with the potential to become world class soloists.  The second group was judged to be merely “good.” The third group was unlikely to ever play professionally and who intended to become music teachers in the public school system.  They were all asked the same question:  over the course of your entire career, how many hours have you practiced?

They all started at the same age of five and practiced approximately two or three hours a week.  The students who would end up being the best in their class began practicing six hours a week, then later eight hours and by 12 were practicing (purposefully  and single-mindedly  playing their instrument with the intent to get better) well over 30 hours a week. In fact, by the age of 20, the elite performers had each totaled 10,000 hours of practice.

By contrast, the merely good students had totaled 8,000 hours, and the future music teachers had totaled just over 4,000 hours.

In this study, they couldn’t find any “natural” musicians who floated to the top while practicing a fraction of the time their peers did. They also couldn’t find “grinders” who worked harder than anyone else, yet really didn’t have what it takes to get to the top. They found that once a musician has enough ability to get into a top music school, the distinguishing factor of success is how hard they work. THAT’S IT.

The idea that excellence at performing a complex task requires a critical minimum level of practice surfaces again and again in studies of expertise. In fact, researchers had settled on what they believe is the magic number for true expertise: 10,000 hours.

I am sure you might be thinking, what in the world does this have to do with selling cars, selling service, servicing cars, selling financial service products, answering inbound phone calls or taking inbound Internet leads. Well, the short answer is: everything!

I have been in and around the retail automobile business much of my life. I know for a fact that, in general, there is a huge lack of practice time for almost every job in a dealership. I say “almost” because technicians have gotten more training and practice time in their positions than any other. I am not talking about the fact that we work arguably too many hours at what we do at work, I am talking about the amount of training and practicing at improving our skills and knowledge in each position on a regular basis.

The fact is, many of the people who decide to join the retail automobile business in most positions, do not do so with mindset of it being the career they had always planned on. I can also say that even though both my father and grandfather were dealers. I had all the educational opportunities one could hope for. But until I was 31 years old, I had not seriously considered making the car business my career.

Most of the Dealers and General Managers in the country started in the business selling cars. I often ask them to go back to the time they were hired into their first car sales position. I ask them to remember what the interview was like, what they were told their responsibilities were going to be, what the onboarding process was going to be, how much training there was going to be, what the career path could possibly be, etc.  Most of the people I work with are smiling at this point because this is not how it went down. And as I said earlier, we were the lucky few.

Now, I ask them to come back to the present, at the dealerships or departments they now lead and manage. I ask them to reflect on the interviewing process they now have; what they tell and show new prospective employees that their responsibilities are going to be, what the onboarding process will be like, what the training is going to be like and what they can expect the likely career path to be, if they excel at what they do. In many cases, these manager’s personal experiences being new in the business isn’t terribly different than what they now provide their people, now that they are the leaders and managers and coaches.

There are many more stories in Outliers than I can recount here. But one of the recurring themes in each was that these people or groups had a unique and conducive set of circumstances that allowed them the time to spend an accumulative 10,000 hours practicing their skills to become great. Yes, in many cases there were extenuating circumstances and perfect timing involved, but also there were parents, coaches, teachers, mentors, handlers, bosses, or managers who made sure the time was spent virtually on a daily basis for an increase in knowledge and skills training.

Talent can only be identified in any role when the knowledge of what needs to happen and why is consistently presented; and when a person is consistently working on the skills necessary to succeed. For someone to take off and become almost obsessed enough to put in their 10,000 hours, they must really like what it is they are doing.

I really love this business and I know there are some 10,000 hour car business stories that could be discovered and told. But I also know that there are far fewer than there could be. There is so much more opportunity available to us in each and every department of each and every dealership. I challenge all managers, leaders, and coaches to help and work with your people, so they have the opportunity, if they so choose, to put in their 10,000 hours of practice to become their own story of success.

 


Start training immediately with NCM OnDemand:

Permanent link to this article: http://blog.ncm20.com/2015/06/have-you-put-in-your-10000-hours/

Dave Anderson

Building a High Performance Culture (Part 21)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

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Words That Hurt: Micromanage

In this post on building a high performance culture, I’m assigning the word “micromanage” to the Words that Hurt column. Micromanagement is an often-misunderstood word, so in this piece I’ll explain what it is and is not, as well as the danger it poses to your culture, people and results.

I’ll dig deeper into micromanage momentarily. But first, quickly review the strong and weak cultural words below so you can conceptualize the ideal culture to move your organization towards, as well as what you must weed out of your culture in order to maximize your organization’s potential.

Words that work and must be woven into culture:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Wise: having or showing good judgement.

Diligent: giving constant effort to accomplish something.

Words that hurt and must be weeded out of culture

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about. (as opposed to being committed).

Foolish: lacking good sense or judgment.

Micromanage is defined as “to control with excessive attention to minor details.” Here are seven thoughts on micromanagement and how it will influence your culture.

1. Holding people accountable for tough standards is not micromanagement.

It’s important to note that there are a handful of things within a culture that are not up for debate, must be held in a iron grip, and thus may be wrongly perceived as micromanagement. Managers who are diligent in holding others accountable for living company values and following prescribed processes are often erroneously accused of being micromanagers. This reflects a failure to understand that micromanagement involves “minor” details, and values and processes are major matters and must be vigorously enforced and upheld.

2. Making every decision, solving every problem and having all the ideas are signs of micromanagement.

You’ve conditioned people to count on you so heavily they cannot think for themselves. Micromanaged people lack passion and tend to play not to lose.

3. Over-involving yourself in others’ jobs, especially in areas where you have little expertise, may constitute micromanagement.

While your authority allows you to set clear expectations and deadlines for results for the various aspects under your charge, you err when you then nitpick and continually second-guess those responsible for producing the results throughout the process.

4. If you hire the wrong people you’ll have to micromanage them.

This is a sad truth, because it’s foolish to empower incapable or corrupt people with latitude and discretion and expect anything positive to come from it.

5. Micromanagement is a primary de-motivator for top performers.

High achievers resent having to check with you for everything. They feel that their past performance should earn them the trust to move faster and with less supervision than less-proven team members.

6. Micromanagement works in the short-term.

It’s always easier to personally make a decision or perform a task than to teach someone else how to do it. But this strategy causes you to plateau, and stunts the growth of others over the long haul; you become overwhelmed doing too much personally, and others never get to try new things or venture beyond their comfort zone.

7. Micromanagement is rooted in pride and to a large degree, insecurity.

Micromanagers feel that if someone else performs tasks or makes decisions without their involvement it makes them less important. They may also feel that “if they want it done right they have to do it themselves”, overestimating their own abilities while they sell short the potential of their teammates.

In summary, micromanagement overwhelms you, demotivates others, and creates an oppressive culture.

Face it: if you’ve hired people who must be micromanaged that’s your fault; if you don’t train people to do their jobs more independently, that’s your fault; if your ego doesn’t allow you to empower others, that’s your fault. Are you seeing a pattern here? The good news is that you can fix what is your fault. The bad news is that most micromanagers are too full of themselves, or busy doing everything themselves, to even bother trying.

Permanent link to this article: http://blog.ncm20.com/2015/06/building-a-high-performance-culture-part-21/

Mark Shackelford

Have You Tracked Your Employee Turnover Lately?

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Do you find yourself constantly concerned about retaining your employees and trying to hire the right people to take care of your customers?

There has been an awful lot of discussion about this topic and how to become better at your hiring process and pay plans. I believe the issue starts with identifying the right personality for the job and then having the right training process and accountability in place in order to retain good employees.

This starts with the dealer doing the right thing and having managers do things right!

We come in contact with salespeople in our everyday life and when we do, we recognize talent and we also recognize when we are treated poorly. Today’s workplace is becoming more and more challenging to find someone who wants to work the hours needed to operate our business effectively and is motivated by money. That being said, maybe we need to look at our pay plans and how they motivate our employees, while at the same time allowing them to balance their work schedule with time off.

We know that our industry has been challenged by vendors as well as manufactures in finding ways to change or eliminate our sales process, however, one thing will never change: people sell cars. So we need to hire the best at it and keep them.

The first thing we need to change is how we look at the work schedule.

Then, through our interview process, we need to identify what motivates the new potential hire financially as well as how we can assist them in achieving their goals in order to succeed in their new career. Our pay plan should be tied to performance, as well as effort. Along this line, how often do you monitor their training and evaluate their performance? Do they align with each other?

Don’t forget that most people like to be held accountable and be led by a leader.

How often do you have an accountability meeting with your employees to discuss what obstacles may stand in the way of them hitting their objectives?

Let me give you an example of what I’m talking about: A new salesperson was hired that had performed quite well at their previous store, but after two months of struggling with their sales performance, they began talking about leaving. The sales manager and the HR manager held a meeting with the employee. During this meeting it was discovered that the sales person was struggling with getting leads and opportunities to work with customers.

After reviewing the salesperson’s closing ratio and the number of opportunities, they discovered the statement to be true. In fact, the salesperson with the most sales had a lower closing ratio and burned through more ups than the person being reviewed. What if this salesperson had been given the same number of opportunities? It would be a win for everyone.

Many times we lose good employees and never know the real reason for their departure. Dealers who are doing the right things and managers who do things right will make the right hire, train weekly, and have a performance review with all employees at least twice a month.

 

Permanent link to this article: http://blog.ncm20.com/2015/06/have-you-tracked-your-employee-turnover-lately/

Dave Anderson

Building a High Performance Culture (Part 20)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

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Words that Work: Diligent

In this post on building a high performance culture I’m adding the word diligent to the words that work column, although diligence can hurt you if you’re investing it in the wrong habits or activities.

I’ll expand on diligent in a moment, but first do a quick review of the strong and weak cultural words so you can conceptualize the ideal culture to move towards, as well as what you must move away from culturally in order to maximize your organization’s potential.

Words that work and must be woven into culture:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Wise: having or showing good judgement.

Words that hurt and must be weeded out of culture:

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about. (as opposed to being committed).

Foolish: lacking good sense or judgment.

The word diligent is defined as “giving constant effort to accomplish something.”

High performing cultures are those where the right things are done consistently, and where the team members diligently persist to see those right activities come to completion.

In order to maximize results, discipline must precede diligence. In other words, one must be disciplined enough to choose and execute the highest leverage tasks from the outset, and to say “no” to the distractions that arise in the process, before diligence is beneficial. Frankly, giving constant effort to stick with, or accomplish, the wrong something, or a low-return something, hurts an organization and stifles results.

The word “consistent” is a cousin of “diligent.” To be consistent means to “constantly adhere to the same principles”. Thus discipline chooses the right activity or principle; consistency ensures those same things are done repeatedly, and diligence ensures the actions are not only initiated but followed through to a successful completion.

Discipline, consistent and diligent are critical success traits demonstrated by highly successful people, and are a trait of highly performing cultures overall. Without discipline you’ll consistently put second things first, as you diligently move forward majoring in minor things.

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Permanent link to this article: http://blog.ncm20.com/2015/06/building-a-high-performance-culture-part-20/

Steve Hall

We’re All On The Same Team: Parts & Service – Helping Each Other Succeed

Parts and Service

Have you ever wondered why Service and Parts Managers don’t get along? In reality, don’t they need each other to succeed? As we examine this, let’s start with some generalizations from dealing with thousands of Service and Parts Managers along with General Managers throughout my career. The overwhelming consensus is that Service and Parts just don’t get along. That’s not to say that there aren’t dealerships where they do get along very well, but those are definitely in the minority.

If you think about it, it’s easy to see why these managers can be at odds. Here are just a few reasons:

  • Service Managers are typically extroverts, whereas Parts Managers are typically more introverted.
  • Service Managers typically have a “whatever it takes” attitude towards resolving issues. At that moment, they just want the customer handled. In the same situation, the Parts Manager will typically revert back to the processes to work through the issue, looking for the reasons why it happened.
  • Parts Managers like to have a place for everything and everything in its place. Service Managers generally don’t.
  • Parts Managers work from an inventory of parts. If a part doesn’t sell today, it will still be on the shelf to sell tomorrow. Service Managers work from an inventory of time. If they don’t utilize an hour today, it’s gone forever.

I’m not saying that one is right and the other is wrong; it’s just that they’re wired differently. That’s what makes each of them good at what they do; they have different mindsets for different types of positions. Unfortunately, these different mindsets can often times cause friction and impede them from effectively working together.

Rather than belabor the differences, let’s work on why and how they must align to achieve their departmental goals.

Did you know that, in a typical dealership, 85% of the Parts Department gross profit is generated from their internal customers, meaning the Service Department (and the Collision Department, if they have one)?

Or, have you ever thought that the Parts Department doesn’t really sell anything? They fill orders and requests. On occasion, they may “sell” an additional item when filling a request, like when a front counter customer is purchasing a timing belt and, at that time, the counterperson suggests drive belts or a timing belt tensioner and the customer purchases them. But most of the time, they are filling requests. Again, this is not an indictment; it’s reality.

Why is it so important? Because it all comes down to knowing what truly affects your department’s numbers. Realizing that 85% of your Parts gross profit is generated from your Service and / or Collision Departments (and that they are truly the salespeople for the Parts Department) is vital in building a growth strategy for your Parts Department.

Let me explain a key correlation for your Parts and Service Departments.

When dealers are asked how much total gross profit they generate for every dollar of labor they sell, we generally hear an answer like this: “We have a gross profit on labor of 75%, so that would mean we earn 75 cents of gross profit for every $1.00 in labor that we sell.”

While that answer will appear accurate on the surface, it actually is incorrect. Remember, I said the Service Department is the salesforce for the Parts Department, and when I asked how much total gross profit is generated from every $1.00 in labor sales, this changes the previous answer. Because there is a relationship of Parts to labor sales, for every $1.00 in labor sold, a typical dealership will generate approximately $1.25 in total gross profit. You have to remember that when you sell labor, Parts will naturally be sold with it.

Realizing that the Service Department generates the vast majority of the Parts Department gross profit, what would be the most effective way to grow both your Parts and Service Departments?

You need to sell more billable flat-rate hours! Both departments must be focused on this primary goal.

Are you starting to see how these managers must start working together for the good of their departments? So far, I’ve focused on why the Parts Department needs to get along with Service. You may be asking, “Why does service care?” It still comes back to the driving factor for both departments — producing more billable flat-rate hours. The Service Department can’t produce as many billable flat-rate hours if they aren’t working well with the Parts Department. Parts can slow down or even stop production, thus costing the Service Department the ability to produce gross profit for themselves.

What we need to find is common solutions that allow the Service Department to bill more flat-rate hours and the Parts Department to achieve more Parts sales through those hours billed. So, how do both managers find ways to increase the amount of flat-rate hours billed? Let’s start with what the Parts Department can do to help. Here are some thought starters:

1) Stock more breadth of Parts and less depth of Parts. With daily stock orders, departments need less depth of parts, or how many of each individual part number you have on hand. Then, you can repurpose this capital into having more part numbers in stock, thus increasing your breadth, or total number of parts that you have on hand. By having better breadth of Parts, the Parts Department will be able to have a higher filled-from-stock ratio. This will help keep Technicians in their bays producing billable flat-rate hours and help both departments grow.

2) Another way to increase billable flat-rate hours is to find ways to keep the Technicians in their bays working, rather than waiting at the Parts counter for Parts. The best way to achieve this is by delivering the needed Parts to the technician right to his bay. This saves walk, talk and wait time for the Technician, as they would normally make their way to and from the back Parts counter.

3) Stock fast-moving Parts in the express Service bays. At the very least, oil filters have to be in the bay, but in reality you should make provisions for additional fast-moving items like air filters, cabin filters and wipers. Service Managers, take note: once these parts are stocked in your bays to increase Technician productivity, the parts are now under your control and any shortages are the responsibility of the Service Department.

4) Aggressively chase parts rather than automatically subjecting the Service Department to the perils of the special order Parts process. If you can pick up the part locally from another dealer and complete the job today, do so.

5) Keep your Parts Department aware of the daily and month-to-date hours produced in the Service Department. Seldom will you have a great month in the Parts Department without your Service Department having a great month. Therefore, the Parts Department needs to know exactly how the Service Department is tracking.

By posting these numbers, this will keep the relationship of hours billed to parts sold fresh in your employee’s mind. Hopefully, this will make them more proactive in finding ways to keep the Technicians in their bays working rather than waiting in line, or talking about their latest fishing adventure.

You can even incorporate shop hours produced into the pay plans of back counter people to keep them focused on increasing flat-rate hours billed. This helps make them more open to solutions.

Those are some ways that the Parts Department can help the Service Department produce more flat-rate hours. But since this is a team effort, what can the Service Department do to assist in this effort?

The Service Manager and Department must realize that the Parts Department is a business partner with them, not a servant to them. The success of both Service and Parts will be greatly reduced if they don’t work together.

Think about this: how is the Service Department staffed? Do you have enough Technicians and Advisors? Are both of these positions selling and producing enough? If you’re short Technicians or Advisors, your labor sales will suffer, thus your Parts sales will suffer. This is a critical element for both departments. Remember: your Service Department is your sales staff for your Parts Department.

Next, track and scoreboard your “Parts sales to labor hours billed” ratio. This will help you determine any shortcomings that you have by individual employees.

The final suggestion that I would like to give is simple. Employees find ways to work their pay plans. If you want to increase Parts sales, include your “Parts sales staff”, meaning your Service Advisors. Incentivizing Advisors (along with Service Managers) will help increase your Parts gross profit and help break down some of the interdepartmental barriers, as they will feel more a part of the same team. Continue to promote teamwork to ensure that both departments are successful, as that’s how the dealership wins. Just like a football team, the offense must be successful and the defense must be successful for the team to win the game. One without the other just won’t get it done.

Permanent link to this article: http://blog.ncm20.com/2015/06/were-all-on-the-same-team-parts-service-helping-each-other-succeed/

Dave Anderson

Building a High Performance Culture (Part 19)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

Chess

Words that Work: Wise

Words that Hurt: Foolish

In this post on building a high performance culture, I’m adding the word “wise” to the “words that work” column, and “foolish” to the list of cultural “words that hurt”.

I’ll expand on traits of both wise and foolish people, as well as strategies for dealing with both below. First, let’s do a quick review of the strong and weak cultural words so you can conceptualize the ideal culture to move towards, as well as what you must move away from culturally in order to maximize your organization’s potential.

Words that work and must be woven into culture:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Words that hurt and must be weeded out of culture:

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about (as opposed to being committed).

Wise is defined as: having or showing good judgment.

Foolish is defined as: lacking good sense of judgment.

Keep in mind that wise doesn’t necessarily mean book-smart, and a fool isn’t necessarily an untalented dullard. In fact, sometimes the “fool” is the brightest person in the room. And while most people show signs of both wise and foolish behavior from time to time, the trait that dominates should best foretell their future with your organization.

What can accurately help you determine how to categorize one as wise or foolish is in how they respond to the feedback you give them on their behaviors. Author Dr. Henry Cloud specifically mentions the following differences. Pay close attention, because in order to build or sustain a strong culture it’s essential you have wise people throughout; those who respond as follows when receiving feedback on their behaviors and performance:

  • They thank you for it.
  • They own it; take responsibility for it.
  • They show remorse for unhealthy behaviors when you bring it to their attention.
  • Your relationship with them strengthens as a result of the feedback.
  • They change their behavior as a result of getting feedback.

You can take wise people far in an organization. Your investments in time, dollars, training, coaching and mentoring return to you exponentially over time as they grow and increase their capacity to contribute to the organization.

Unlike a wise person, the fool does the following when you give him feedback:

  • Externalizes it: He will blame others, conditions, and even you for their behavior or results: “You do the same thing!” etc.
  • Minimizes it: He will try to convince you his behavior or result isn’t that big of a deal: “I was only ten minutes late. What’s the big deal?”
  • Rationalize it: He will excuse it; say he had no choice based on the situation he was in, the options available: “Given the hand I was dealt, I didn’t have a choice,” etc.
  • The relationship weakens as a result of your giving feedback; the person withdraws, pouts, resents and tells others how unfair you are.

Your future with foolish people within your organization should be brief, at best. They demonstrate character flaws you cannot fix or change. They can fix or change them, but don’t seem to see the need for it.

 


toptalent

Permanent link to this article: http://blog.ncm20.com/2015/04/building-a-high-performance-culture-part-19/

Steven Banks

Get Your Arms Around The Data In Your Dealership

Get Your Arms Around Your Data

Lately it seems I am unable to hide from the term, Big Data. I’m exposed to it in headlines, newspapers (a bit old school, but I still read them), magazines and yes, even blogs. But what does “big data” truly mean and why are we being doused with it? The term is so new I couldn’t locate it in the Merriam-Webster® dictionary, so I took the obvious next course of action and looked up the definition in the infamous Wikipedia. This is what I found:

“Big data is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.”

To dealerships, big data, or more importantly the management of big data, can mean the difference between increasing profitability and stagnation. Let’s take the aforementioned definition in a bit more industry-specific direction. To ensure we are maximizing day-to-day operations efficiently we use traditional DMS systems, inventory management systems, RO analysis software, manually-generated spreadsheets, etc. All of this is great and even necessary, but it seems as other technology is advancing and there is more information readily floating around in the cloud, our in-house systems should be able to progress at the same accelerated level.

So what does this mean for us?

In order for us to know what actions we should take, we first need to know what questions to ask ourselves.

What data should we pay attention to?

Any data that can impact our dealership should be monitored. Ignore the data that is fascinating but irrelevant. Perhaps instead of looking at the national averages, comparing our dealership numbers at a regional or state-specific level is the best course of action.

Who should we rely on to receive this information and is the source of this data really credible?

I often find myself five minutes into reading an article or looking at a visually stimulating pie chart that shares impressive data when I realize I’ve never heard of the company publishing it and don’t recognize the columnist.  Does that mean you need to recognize every author’s name?  Absolutely not (as you might not recognize mine), but take what you find with a bit of caution if the author or company is unfamiliar. These days, it’s pretty easy to find out if an “expert” is speaking with authority, so do some research to find out more before acting on the information.

There is so much noise out there; what should I be looking for to help me manage my data?

There are some amazing new solutions available to help dealerships with data management.  Some data management vendors will unleash a plethora of raw data to their customers, but it is hard to make sense of it.  Avoid any vendor that says they have it all, as they will tend to over-promise and under-deliver.  Look for a platform that works in conjunction with your DMS, fixed, variable and accounting systems.  After all, this is the approach that we took when developing NCM axcessa, our web-based software that aggregates your dealership’s big data in real-time and eliminates the need to manually generate reports.  Why?  Because our clients demanded it be that way; otherwise, it’s just another piece of software rather than the actionable intelligence tool they desired.

Big Data has arrived at the party and the reality is it’s here to stay.

So let’s not only get used to it, let’s embrace its power to help us accelerate our dealerships in an economy and marketplace where the complacent mindset is depleting and the progressive mindset is excelling.

 


Permanent link to this article: http://blog.ncm20.com/2015/03/get-your-arms-around-the-data-in-your-dealership/

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