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Tag Archive: Fixed Operations

NCM Associates

#AskNCM: Will more wholesale increase net profit in Parts?

Will addressing wholesale issues increase net profit in Parts? Yes, says NCM expert Steve Hall, but there’s an important step you must do first.What more insights from Steve Hall and other NCM experts? Join them for our intensive Mastery level classes in Service Management, Used Vehicle Management and General Sale Management. Have another question for #AskNCM – comment below!

Permanent link to this article: http://blog.ncm20.com/2016/06/askncm-will-more-wholesale-increase-net-profit-in-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/

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/

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 Hall

Three Hours Lost: Your Top 10 Service Time Wasters

Clock

When we ask service managers how important technician efficiency is to profitability, they most often say that “it goes hand-in-hand” or “if they aren’t efficient, you won’t make money.” While I agree with this, let’s look at it another way: time.

Here are the top 10 time wasters I’ve seen in service departments.

  1. Talking (non-productive talk)
  2. Waiting for the first job of the day
  3. Getting authorizations from customers
  4. Waiting on advisors
  5. Waiting in line in Parts
  6. Looking for or waiting on special tools
  7. Walking to Parts and back
  8. Phone calls, texts, e-mails and using tablets or laptops
  9. Smoking
  10. Arriving late or leaving early

How many hours lost?

I ask managers to make this list during each of my training sessions at the NCM Institute, and then I have them to assign time lost by activity. Sure, there are minor variations each class. But what doesn’t change is that we routinely come up with 2½ to 3 hours spent each day, not working on vehicles!

I know it is unreasonable to think that every minute can be spent on productive work, but how many of these lost minutes can we pick up?

Getting time—and money—back.

Let’s look at an example: We will figure an average shop of 12 technicians and gain just 15 minutes a day in actual production. We will use an $85.00 an hour effective labor rate and a gross profit percentage of 75%.

The numbers would look like this:

12 technicians x 15 minutes a day = 180 minutes of production gained a day (3 hours a day gained)

3 hours gained x $85.00 ELR = $255.00 in labor sales gained per day

$255.00 x 75% gross profit (labor) = $191.25 labor gross gained per day

$191.25 x 300 business days per year = $57,375 additional labor gross profit per year!

Add in corresponding parts gross generated from the labor sales, and you could earn more than $95,000 in additional fixed gross profit per year (and that is figured at 100% efficient). If they are 125%, the numbers are even larger! All of this from just gaining 15 productive minutes per day from each of your technicians.

Take the time to evaluate all of your technicians’ daily time wasters. Find ways to reduce the wasted time. Ask them for ideas and creative solutions. (And, once they know you are paying attention, some of the time wasters may just disappear.)

Go ahead, do the math your own numbers and find your potential: you’ll be amazed!

service_parts_senior

Permanent link to this article: http://blog.ncm20.com/2015/08/what-are-15-minutes-a-day-worth-in-your-service-department/

Jeff Cowan

The Myths of Writing Service Part 2

Writing Service Part 2As you remember from my article last month, myths can be very dangerous things. They can and will impede your ability to grow, expand, and succeed. I discussed some of the biggest myths surrounding the writing of service and will list a few more here today that have come up and continue to come up in the many meetings I am asked to speak at throughout the year.

Myth: Service writers do not need the same amount of training as the car sales staff.

Fact: A Service Advisor who works with just fifteen customers a day will generate more gross profit for a dealership in a month than a sales person does who delivers thirty vehicles in that same month. In addition, due to the volume of customers they will talk to in a month, they will have more impact on your survey scores and customer retention than any other employee in the dealership, including the dealer. So why would they not need the same amount of training or more?

Myth: Women service writers who are mothers are risky due to parental responsibilities.

Fact: Tell that to Abigail Adams, wife to President John Adams. While John was overseas for many years, she stayed behind and ran the farm, ran John’s businesses, and raised 6 kids, one of which grew up to be our nation’s sixth president. One of my daughters is at the child bearing age. She and ten of her close friends have all had children in the past twenty-four months. While one of them quit her career and became a stay/work at home mom, the other nine not only continued their careers, but eight of them actually increased their hours or took on more responsibility. Why? Because they quickly realized that if their kids were to have a life equal to or greater than their own, they had to work harder and smarter. If all things are equal and I have the opportunity to hire a male service writer versus a female service writer with kids, especially young ones, I will take the female with kids every time. Think grizzly bear with cubs.

Myth: Service writers who work in economically challenged areas cannot sell as much as service writers who work in affluent areas.

Fact: Many times, they can sell more for one simple reason; the more financially challenged a person is, the more important their vehicle becomes to them. Financially challenged customers know that if their vehicle does not run and they cannot get to work, then their financial situation will only get worse. I have worked in countless service drives with countless service advisors where their customers were financially challenged and the sales made were either equal to or greater than those in service departments where the reverse was true. The difference is that the financially challenged customer requires a service advisor who has a slightly different skill set and outstanding follow-up and over the telephone selling skills.

Myth: Women service writers have a tougher time in service because men prefer to talk with men.

Fact: This is not a gender specific problem. A service advisor who is strong at taking control of the customer and exudes confidence, can and will be able to handle your customers. While this myth used to have some validity twenty years ago, it has none today. If I were to list the top ten service advisors that I have worked with over the past twenty-nine years, seven of the top ten would be women.

Myth: It does not take as much skill to be a quick service writer as it does to be a full shop service writer.

Fact: Arguably, it takes more. Think about it. A quick service writer is many times the first person a new customer will work with in service after purchasing a new vehicle. Their ability to handle your customer and convince them that your shop is the only place to go for service, has to be near perfect, if not perfect, to get the job done. Although the path to full shop writer begins many times in express, the express writer should be trained to expertly handle any scenario that a full shop writer would. Again, they are likely to be the first point of face to face contact in the dealership after purchasing a new vehicle. Express should be trained to impress every time on every level.

Myth: It is impossible to train veteran service writers to adapt to changes in their customers’ demands and in new technology.

Fact: Not if you have established a culture of constant change in your department. The service writer or employee who cannot adapt to change and evolution in retail sales will become a dinosaur within five years. When you consider how rapidly your customers and their buying habits have changed in just the past few years, and how rapidly technology changes, any employee who can not keep up is costing you money. In the future there will be two types of sales people; those who sell technology and those who use it. The rest will become obsolete.

Myth: Service writers can handle setting their own check-in times, checking in your customers’ vehicles, following up on those customers throughout the day, closing those customers over the telephone, closing out their own repair orders, contact customers who have been waiting for parts, cashier their own customers, actively deliver vehicles back to each customer as the vehicle repairs are completed, send a thank you note to each customer, contact customers who missed their check in times, contact customers who previously declined repairs, contact customers they have not seen in over six months, while at the same time getting and maintaining high survey scores and customer retention.

Fact: Only if they write ten to fifteen repair orders a day. Just like on the vehicle sales side, you want to free your service writers (sales people) up as much as you can, to talk to your customers.  Sales people make you money when they are talking to your customers.  The more time they have to talk to your customers, the more money they will make you. From the beginning of car sells through the early 1960’s, vehicle sales people answered the dealership’s incoming sales calls, did their own financing and helped people when they came in for service. When dealers realized that those activities kept their sales staff in the building and not out on the lot where the buyers where, it ushered in the era of the telephone receptionist, the F & I department and service staff, and significantly more vehicles were sold. The more you can do to support your advisors by freeing them up to talk to your customers, the higher your retention, survey scores and sales will be.

Myth: Service writers will not sell or are not good at selling additional products like special wheels, extended warranties, details, etc.

Fact: Not true. To sell anything on a service drive requires three things; a great product, great training in how to present and sell it, and a great pay plan.

If you are consistently not hitting your sales, retention and survey goals, it is a sign of great weakness not to try something new. Trying something new can be as simple as taking a look at what you or your staff say can’t be done, and testing to see if the reason is based on fact or myth.

You should make this a common practice and part of your monthly routine to dispel myths that may exist in your work place. I get blamed from time to time for being too willing to test and eliminate these myths and reasons that hold my business back. I am told I need more patience. The fact is, I do have patience for the time it sometimes takes for myths to be tested.  What I do not have patience for is the lost customers and revenues that myths produce.

Permanent link to this article: http://blog.ncm20.com/2015/03/the-myths-of-writing-service-part-2/

Steve Hall

Sales Management Responsibilities of the Service Manager, Part 2

servicemgr

Last week at the NCM Institute, we talked about six of the “35 Responsibilities of the Service Manager”.  Today, I would like to go over five more of the sales management responsibilities on this list. These processes are not in any particular order of importance, but realize that if you want to become a world class service organization, they will all be important. Let’s get started!

Labor Pricing System

In continuation from our last six responsibilities, the next responsibility is the labor pricing system.  Ensure that a proper grid labor system or precision labor rate for non-competitive repair work is in place and followed consistently to improve the effective labor rate.  Also, verify your factory maintenance service and high visibility repair work is priced competitively.  You can sum this up by saying, have a well thought out method to your pricing, employ different target effective labor rates by category, and then make sure your employees follow it.

A.S.R Process

Responsibility number eight for sales management in the service department is the A.S.R. process. A.S.R. stands for Additional Service Request. These are the needed items found by your technicians during the multi-point inspection process.   Ensure you have a documented process for these requests, and that it is followed consistently by the technicians and advisors.  This is a crucial process to maximize sales opportunities. As with any crucial process this must be measured and inspected every day. You should track average requests per vehicle and the closing percentages on these requests as a department, along with by advisor and technician.

Extended Service Hours

The ninth responsibility is extended service hours. Always have extended service hours with early bird and night owl services, along with Saturday hours that will accommodate your customers. You don’t have to be open longer than your competitors, but you should be open the same.  When a customer needs help and you aren’t open and your competition is, you run a real risk of losing that customer.  In conjunction with providing great customer service, the incremental gross profit that can be obtained in these additional hours can have a large positive effect on your net profit. Just be aware that if you aren’t currently doing this, it will be a culture change and you must communicate well with you staff to make it succeed.

Internal Repair Orders

The tenth responsibility under sales management focuses on internal repair orders. You must ensure you are retaining 100% of all available internal work.  This should include all reconditioning, pre-loaded accessories, aftermarket items, and detailing.  You must also make sure all reconditioning work is being completed within three business days.  The quick turnaround of reconditioning helps to maximize the opportunity to turn the inventory for the pre-owned department. As a result of that, you have an increased opportunity to gain additional vehicles to recondition.  This will make both the service and pre-owned departments more money.

Fleet and Commercial Accounts

The final responsibility we have under our sales management of the service department section is fleet and commercial accounts. In an effort to achieve incremental sales and gross profit, you should pursue these volume accounts.  Guaranteed this is somewhat easier for certain brands, but if you look hard enough you can find fleet vehicles for every manufacturer in the market. Some places you might look into for this type of work include, local and state governments, rental facilities, construction companies, medical transportation companies, and the list can go on and on. That covers our 11 responsibilities that fall under the service sales management category, even though these are just the tip of the iceberg.  Again, as you work towards taking your dealership to the next level, feel free to reach out to NCM, and all of its professionals, to see how we can help. Did you miss the first six responsibilities? Watch a recap from CBT News here:

Permanent link to this article: http://blog.ncm20.com/2015/01/sales-management-responsibilities-of-the-service-manager-part-2/

Jeff Cowan

Who’s Failing Who? How to Improve Your Service Department

apptmnt

I have a friend who called me up in late June and asked me for some help. His daughter Tammy, who had graduated college the year before, was having trouble finding a job.  He knew I’m in the automotive industry and wanted to know if there might be an opportunity for his daughter. Knowing Tammy, I was thrilled to think that this bright young woman would have an interest in an industry that I love so much.

Although her college had been paid for, Tammy, not one to be idle, worked a part time job as she went to school. She worked at Starbucks for a while, but worked the bulk of her college years at an electronics and appliance store. She started out in customer service but quickly moved to the sales floor, as the managers saw that she had a work ethic and personality more suited for sales. After making that move, Tammy earned more than her share of spiffs and small awards for her ability to work with and sell to customers. This did not surprise me, as I had always known Tammy to be a happy, outgoing type of person; the type that could one day be a great salesperson if that is where her heart lead her.

Anxious to help, I recommended she give writing service a try. I told her how she could earn an income of $50K plus annually, and over a short period of time, 50% more than that. I explained to Tammy all the benefits of the job, explaining that although it might be tough, it could be a very rewarding career choice for her. Being the motivated, hard-working person she is, she immediately started applying at dealerships in her area. She was hired within one week of looking.

Tammy started at a GM dealership in July. This particular dealership has about 50 vehicles visit its service department every day. The pay plan she showed me was one that would allow her to make the $50k plus annually, just as I had told her, with a decent benefit package. She was stoked to say the least. With this job, she could accomplish her dream of being totally independent and on her own.

As I write this, it has been just over three months since she started. It has been nothing short of a disaster. She is averaging about $1,700 a month in gross income with no big upswing visible in the near future. Everything I had portrayed the job to be has not panned out. What went wrong?

1. In three months’ time, she has received one hour of training. That training came from the factory rep. He happened to stop by the dealership 35 days after she started. He was kind enough to spend an hour with her to show her some “tricks” on her computer.

2. With it being July and right in the heat of the summer, the advisors she shares her day with were supposed to help her learn the job. They did not. My assumption is that either they did not have the time, simply did not want to, or most likely, did not know how to do the job themselves, since their numbers are ridiculously low as well.

3. Her manager, who seems to be always missing or putting out fires, has spent zero time with her beyond normal chit-chat and monthly team meetings where he talks about the importance of better numbers – “Talks about,” yet gives no instruction on how to get these better numbers. The General Manager, however, taking a liking to Tammy and seeing her struggle, bought her a copy of the book “Gung Ho!” He felt by her reading the book, it would help improve her survey scores.

4. Morale is understandably low since no one is making anything close to the money they were told they could make, and would make with some training. What is even more demoralizing for the service staff and Tammy, is that they witness every week how the vehicle sales staff get endless training, endless spiffs, and have regular Saturday auto sales contests with hundreds of dollars in cash being handed out.

I have advisors write and call me all the time with similar stories, and although I have always felt for these advisors, it never quite resonated with me until I saw it happen first hand. I know that not all dealerships are like that, but by my best guesstimate, I believe that somewhere between 30 to 50% are, just based on the communication we have daily with dealerships who are seeking us out to improve their service profits.

Personally, I don’t get it. Why would someone go to the trouble of finding the land, building the facility, inventorying it with millions of dollars of inventory, spending thousands to get people to walk in the door and then stop short by a very few thousand dollars to train their employees to be prepared for their customers? We in the auto industry cry and scream for people to come and join our employment ranks. We are stunned that more would not want to, with all the industry has to offer. Yet it is easy to see why they do not. Just like an untrained salesperson will run your customers off, any business who does not train their employees will run those employees off.

As far as Tammy goes, she is now talking about leaving the car industry, not because she wants to, as she sees great potential in it. She is leaving it because her whole reason for going to school and working is not being met; the need to be independent and live without a handout, or the aid of others.

What a shame. I thought young, educated people were what we wanted and needed in our industry! If they truly are, we will never attract and keep them with our current approach. I did give Tammy access to my training, but as I was not able to be with her on the drive every day (living 2,000 miles away), I could not show her how it worked and coach her the way she and the rest of the staff needed to be coached.

All this to say: If you’re wondering why your advisors or service department is not meeting your goals, here are a couple of things to think about or address:

  1. Do you actually have a solid and ongoing training process for each advisor hired at your store – for veterans and rookies alike?
  2. Does your Service Manager hold daily and weekly meetings where they coach, critique and role play?
  3. Do you have clear, concise goals for your staff to meet?
  4. Do your managers themselves understand the profession of selling?
  5. Do you as a Dealer, General Manager or Fixed Operations Director fully understand the opportunity missed by not having a fully trained staff, prepared to meet and handle any situation in a proactive way?

Permanent link to this article: http://blog.ncm20.com/2014/10/whos-failing-who/

Steve Hall

Becoming the Best You Can Be

Optimistic businessman contemplating in office.

Is it a Knowing Issue or a Doing Issue that is holding you back?

Have you ever thought about what keeps you from becoming the best you can be? Hopefully, not only have you thought about this in the past, but you think about it on a regular basis. Though this thought process can apply to any employee, manager or owner, today I will focus on managers in the fixed operations departments.

Let’s consider the following situation for our example: The general manger meets with you to review your department’s past performance. During the meeting, the general manager states that she wants to have a minimum of a 50% increase in net profit in your department this year. How do you react?

When faced with a challenge, most people have one of three natural reactions. The first one is the simplest and goes something like this: You agree and believe that the requested 50% increase in net profit is obtainable, and you already have ideas on how to make it happen. You develop your plan, communicate your plan, and actually perform your plan. At this point the stars are aligned, life is good and you are on your way towards achieving the set goal.

The second and third types of reactions aren’t as simple as that. Unfortunately, they are more common than the first reaction.

Let me explain the second type of reaction that we can have when a target, goal or objective is presented. Again we will use the above example, where the boss has mandated a 50% increase in profitability. You may not have a plan to obtain the needed profit. You know that you work hard every day and you just can’t see where the increase is going to come from. You’re not sure whether you need additional sales, additional margins, good old-fashioned expense reduction, or a combination of all three. You want to perform to the requested level, but you just don’t have the answer to how to perform to that level. We consider this a “knowing issue.”

The best part about knowing issues is they are fixable. Our industry has many ways to tap into the knowledge base of highly successful people. Here are just a few ways to gain knowledge that would help you overcome a knowing issue to obtain the objective.

Automotive Training Companies

These companies can provide a wide range of solutions to overcome most any obstacle. You can attend two-, three- or five-day courses that will cover a variety of topics to overcome challenges faced by today’s managers. A side benefit of this type of classroom training is that in addition to the course curriculum, you get to engage other students and learn from their experiences. It also gives you time to get away and work on your business, rather than just in your business.

In-Dealership Consultants or Retail Operations Coaches

Consultants or business coaches are another effective way to get very specialized knowledge. These people will work hand-in-hand with you, on your turf, to come up with solutions that will meet your needs.

Webinars, On-Demand Video Training, and e-Learning Seminars

These on-demand and scheduled training segments are becoming an efficient way to learn new ideas or to help you understand the solutions that are available on a wide variety of topics.

Print and/or Digital Magazines and Blogs

These are easy to access and search. They are full of timely and useful information. Whether you’re looking for information on products or time-proven tactics to help you achieve your objective, much can be learned using this format.

Lastly, don’t forget other resources for information. They include digital automotive groups, discussion forums, professional networks, personal acquaintances, and the list goes on and on. In today’s world, we are never short on being able to find information and ideas.

Knowledge issues all come down to this:

If you really want to know how to accomplish something, with a little research or investment, you can find suggestions and best practice methods. Since we can see that information for solutions is readily available, this brings us to the third possible reaction. It may be the hardest to address. I call this one a “doing issue.” Continuing with our example above, you may understand your boss’s request and even have the knowledge or solutions to obtain the target, but are you willing to do what it takes to achieve it?

This reaction can get tricky, partly because many times managers disguise it as a knowing issue, when really it is more of a doing issue. They know ways to impact the desired result, but for whatever reason they decide not to take action and do it.

They may justify their decision with thoughts like, “The solution sounds like too much work,” or “If I do that, it might upset (you fill in the blank),” or “I’m happy enough with the way things are, so I’ll just wait this out and hopefully it will go away.” These particular types of responses can be devastating to a business, a department and even a career. Unfortunately, they happen way too often.

So how can you overcome this negative reaction? I am going to give you two solutions. The first one is to personally take control, or ownership, of this reaction. If you know that you are the stumbling block, then you can change and become the solution.

Be introspective and figure out why you refuse to “do what it takes.” Is it because the solution is illegal, immoral or unjust? If it is, then find a solution that doesn’t cross these non-negotiable boundaries. If it is just because it sounds like more work than you want to do, then find a way to make it manageable and make it happen, or find a suitable solution that requires less energy, investment or time. You must realize there are many ways to overcome every obstacle.

As an example, if you are having production capacity issues, don’t just convince yourself that you are maxed out and can’t grow. Maybe you have looked at installing a four-day, 10-hour work schedule to increase capacity, but for some reason, decided that was not a good fit. Now you have convinced yourself that there are no other options. Since you don’t want to do a 4-10 schedule, you just muddle along, not growing month after month, and just making excuses.

If you truly decided that the 4-10 option wasn’t the solution for you, does it stop there, or do you go back to the drawing board looking for other ways to improve capacity?

Again, it comes back to a “knowing” or a “doing” issue.

Did you consider the possibility of using a second or even a third shift, or possibly increasing your hours of operation or days of operation? Maybe a team system would help to gain stall density, or a three-day 13-hour shift program is another option. You could look at reduction of bays-to-technician ratio, or utilizing “community” bay programs. These are just samples of a variety of methods to increase your stall utilization and production capacity. There are many more potential solutions for the example, but you must research solutions, find the one that fits your situation the best, and then actually do it!

lightbulb

To help with doing issues, I like to use the Thomas Edison philosophy. When Edison was asked how he felt about failing so many times when trying to develop the incandescent light bulb, he said that he didn’t look at it as failure, but rather he had found 10,000 ways not to make a light bulb. But he added that he only had to find one way that it would work.

If we kept that same attitude, how great could we become? If you start evaluating every challenge as a either a knowing or doing issue, you will be better equipped to know what path you need to take to find that “one way” to make it work for you. That is a key to ultimate success for your dealership, department and career.

This article was originally published in the July/August 2014 issue of Fixed Ops Magazine.


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Permanent link to this article: http://blog.ncm20.com/2014/08/becoming-the-best-you-can-be/

Jeff Cowan

How Service Appointments and Reservations Destroy Customer Retention, Survey Scores and Upsells

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In my workshops I always like to have plenty of Q & A time so that I can address the real concerns that Service Advisors believe keep them performing at their highest level. One concern that never fails to be mentioned revolves around the issue of service appointments and reservations.

Typically, when your Business Development Center (BDC) or your Service Advisor sets your customer up with an appointment or reservation, the customer assumes it means the same thing as it does at a restaurant: when they arrive at the given time, their seat will be ready with no waiting. And just as when they make airline reservations, they expect to be on the plane backing up from the gate at that reserved or appointed time. When you set up a reservation or an appointment for your customer, they have been trained by business in general to believe that the work will begin at the appointment time. No matter how many times or how well you try to explain to your customers what is really going to happen upon arrival, the mere usage of the words “reservation” or “appointment” reinforce their belief that the work will begin at the exact time of the reservation.

This is a serious problem.

According to what I hear from your Service Advisors, and based on what we witness when providing our training on your service drive, three fourths of the customers your service staff work with everyday have this misunderstanding at the initial write up. As your Service Advisors try to explain that the time set for the appointment was for the purpose of gathering information, the exchange with the customer quickly turns into an argument. Therefore the write up and the relationship began with an argument. An argument that your staff can’t win; an argument that takes about six minutes to resolve; an argument that only gets the customer thinking that what they were told was just a ploy to get them in; and an argument that sets the mindset that you don’t do what you promise. Anytime you start out a relationship like this, you put yourself at a big disadvantage toward accomplishing the goals of customer retention, high survey scores and the chance to acquire any necessary up sells.

The simple and easy solution to stopping this and turning it around is as simple as implementing the following two steps.

Step 1: In service, never use the words “appointment” or “reservation” again. Not verbally. Not on signs. Not in print. Not online. Not anywhere. Appointment and reservation times imply an exact time that an event is going to begin. Check-in time implies that waiting will be involved. For instance, when you go to the airport you are encouraged to arrive two hours prior to check-in. Once you check-in, the next step is to wait for the reservation time when you will board the plane and take off.

From now on, you are going to start scheduling “check-in” times for your service customers so that after they check-in, they will wait for the appointed time set by the Service Advisor after they have had a chance to talk with the customer in person about their needs. In the customer’s mind, appointment and reservation times indicate that the event will commence at that specific time. Check-in time however, precedes an appointment time. In the customers mind, check-in time refers to a preliminary period designated for the collection of information. After the information is given, an exact time for work to begin can be determined. Check in time and its implications are familiar to customers.

Step 2: Now that we have replaced the words “appointment” and “reservation” with “check-in” time, the following word tracks are how you are going to explain check-in times and stop the arguments forever.

Word track one is to be said by your BDC or by the person scheduling the check-in time:

“Now that we have established your check-in time for 9:00am tomorrow, allow me to take a minute to explain to you what that means and what will happen once you arrive. First, you will want to arrive as close to your check-in time as possible. Getting here early means you will have to wait and getting here late could result in you losing your place in line. Once you do arrive, your Factory-Trained Service Advisor will be ready with all of the information you just gave me.

During the first part of the check-in process they will go over all of this information to ensure that I wrote everything down correctly, to make sure they understand what your concerns are and to see if anything needs to be added to your list.

The second step in the check-in process is when you and your Factory-Trained Service Advisor will walk around your vehicle to collect numbers off your vehicle and do a quick visual inspection.

The third part of the check-in process is when it will be determined which department and which Factory-Trained Technician will be the one best suited to diagnose and repair your vehicle. That decision will be based on what you and your Factory-Trained Service Advisor discussed and saw during the earlier part of the check-in process.

Once that is determined we will then look at the schedule for that department and Factory-Trained Technician and that will determine approximately when your vehicle will enter our state of the art shop.”

By using this one minute long word track, I have fully explained to the customer exactly what to expect when they arrive, exactly what happens if they are early or late, and exactly what will happen and why. I have explained that the check-in time does not mean reservation or appointment. I have explained and prepared them to wait. Once they arrive prepared, the Service Advisor has two word tracks to deliver:

“Thank you for arriving on time to get your vehicle checked- in. Now that you are here let me explain to you what we will be doing to get your vehicle checked-in. First, I will be going over all of the information you gave us on the telephone to ensure that it was written down correctly, to ensure that I understand your concerns, and to add anything that needs to be added.

Once that is done, we will both walk around your vehicle to collect some numbers off of it and to do a quick visual inspection. Based on what we discuss and what we see during the visual inspection, we will select the department and or Factory-Trained Technician that will be best suited to address your concerns today. Once that is determined, we will take a look at their schedule which will dictate approximately when your vehicle will enter our state-of-the-art Service Department.”

After the Service Advisor completes everything as they said they would, they follow with this final check-in time word track:

“Now that we have reviewed all of your original concerns and have completed our visual inspection, I believe the department/ Factory-Trained Technician that would be best to diagnose and repair your vehicle would be ____. Right now they are working on another customer’s vehicle, so it is likely your vehicle will be entering our state of the art facility at approximately _____. Let’s give them about one hour to an hour and a half to complete your diagnosis, meaning you can expect a telephone call from me between ____ and ____ with an update on the status and findings regarding your vehicle. Fair enough?”

By using these two word tracks, which combined take one minute to deliver, you have done the following:

  1. You have started the relationship on an up note and not with an argument.
  2. You have done everything to the letter that your BDC told them you were going to do.
  3. You have established the reality that when you say something is going to happen, it is going to happen. They can count on you.
  4. You have saved about four minutes at the write-up by being in control of your customer and the write-up itself.
  5. You have slowed the customer down giving yourself more time to build rapport and inspect their vehicle which will substantially impact customer retention, survey scores and your ability to get necessary upsells.
  6. The customer has been educated that speed is not the most important thing in getting their vehicle repaired.

It’s really that easy.

By changing your verbiage from appointment or reservation to check-in time and by delivering these three, simple word tracks, you will experience immediate impact and the arguing will end forever. I have always felt the best way to win an argument is to eliminate all possibility of an argument arising. You can always tell a great Service Advisor by the number of scars they have on their tongues from years of biting back argumentative words. The solution I have presented here will do two things; stop the arguments before they start and save your Service Advisors from acquiring unnecessary scars.

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Permanent link to this article: http://blog.ncm20.com/2014/07/how-service-appointments-and-reservations-destroy-customer-retention-survey-scores-and-upsells/

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