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Tag Archive: Management Team

Steve Hall

Why Dealers Should Be In Express Service

Express Service

Dealers know you must provide fast, convenient, and competitively-priced service in order to retain your customer base.  They also know that oil changes and light maintenance are the most requested service items by customers.  Knowing this, why do dealers continually fight express service?

I’ve heard all the excuses: it hurts my hours per repair order; it hurts my gross profit percentage; it hurts my effective labor rate; I can’t make any money in express service; the list goes on and on.  Shouldn’t we think about it differently?

Isn’t it logical that if a customer comes to you for express services, you will have an advantage to getting the remainder of their maintenance and repair work?  Customers generally do business with people they trust.  If you start to grow that relationship from day one, when the only things that are needed are express-types of items, won’t you have the trust of the customer when the “real” repairs come into play?

We need to realize express service is the gateway to real profits, and if done properly you can make plenty of money along the way.   After all, how do you think all the mass merchandisers and independents stay in business?

Let’s look at it this way, have you ever taken a low profit (or no profit) deal on a new vehicle?  I’m sure that every dealer has, many times.  Why do you do this?  Often times it is because you are getting a trade-in you feel you can make money on.  Other times it is so you can move a unit off the lot to reduce your inventory costs, or maybe to help you reach unit bonus levels for factory incentive money.  Possibly, it was just so you would have an opportunity for the F&I department.  Whatever the reason you decided to take the short deal, you have a plan.  The loss of front-end gross on that unit gave you opportunities to make more money in the long run.  You had to make the deal to gain all of the other benefits.

Can you relate this thought process to express service?  We must retain the customer in order to get all of the long-term benefits.

But express service has an added benefit.

If properly structured, you will make money in express while retaining your customer.  That is a win-win, both short- and long-term!

Take a few minutes and examine how much money is spent on a single vehicle over the lifetime of that vehicle.  Include average warranty work, recalls, oil changes, maintenance, tires, brakes, breakdowns and everything else that happens eventually to every vehicle.  Once you add all of these dollars together and look at the complete picture, you really see what the customer is worth over the lifetime of the vehicle.  Now you must develop your plan to make sure that customer never goes anywhere else, and express service has to be part of that plan.

Let’s look at express service for what it can and should be, a profit center with long-term financial benefits.  Remember, customer retention is a good thing.  Get fast, get efficient, get competitive and get profitable!


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Permanent link to this article: http://blog.ncm20.com/2015/02/why-dealers-should-be-in-express-service/

Garry House

Are You of a Mind(set) to Grow?

synapses

Professor Carol Dweck of Stanford University believes humans have essentially two mindsets, growth or fixed, and through her research with employees of Fortune 500 companies, she found that managers with a growth mindset are more innovative.

Why is this important? According to the author,

“Growth mindset managers create better work environments. They are more open to feedback from employees (because they’re interested in learning); they are better mentors (because they believe in development); and they are perceived by their workers as more fair (because they believe everyone has the capacity to improve). Furthermore, those who have a growth mindset acquire the skills for success.” [Source]

It seems our mindsets dictate how we feel about ourselves and how we relate to situations, ideas and other people. For example, someone with a fixed mindset may believe his or her intelligence or talents are predetermined (or fixed) – you’ve either got brains and talent or you don’t. Those traits, therefore, are as good as they will ever be, so there’s no need spending time and energy developing them further. People with fixed mindsets are what we might consider “set in their ways.”  They think they’ve got it all figured out and any challenge to their way of thinking is a personal affront.

By contrast, people with growth mindsets believe that brains and talent are just the starting point; these folks believe their basic abilities can be improved with hard work and dedication. For this reason, they love to learn, are open to new ideas and perspectives, and they don’t let failure set them back; they learn from mistakes and capitalize on those lessons to find new and better ways of doing things.

Apparently, we can have different mindsets about different things: I may have a fixed mindset about my golf game, but I have a growth mindset about how I run a dealership. And, we have the capacity to change from a fixed to a growth mindset.

As you might imagine, we don’t see that many with fixed mindsets in our classes at the NCM Institute. Here we see managers and dealers who want to learn new skills and better processes so they can improve their performance and enjoy greater personal and professional success. It’s not difficult to spot the ones with fixed mindsets, though. They are usually either very quiet or a bit combative when we expose their way of doing things as less efficient or effective.

Want to know how to spot your dealership’s innovators? Find the employees and managers in your dealership who don’t try to cover up their mistakes, but use them as lessons for improvement. Chances are, those are the ones with growth mindsets.  Harness their drive and enthusiasm by giving them every opportunity to expand their knowledge and skills where it will benefit you both.

Permanent link to this article: http://blog.ncm20.com/2014/06/are-you-of-a-mindset-to-grow/

Tony Albertson

Better Processes Improve Technician Productivity and Gross Profits

Calculator red pencilDid you ever perform this calculation for your dealership Service Department? Whenever we do this exercise, either in the field with one of the NCM Retail Operations clients or in the NCM Institute classroom, the result always knocks the socks off the dealership management team. Click here to be immediately taken to an interactive Excel spreadsheet to perform this calculation for your dealership.

If your dealership’s technician productivity is below the Best Practice Guideline for your franchise, what do you need to do to increase technician flat rate hour production by one hour per technician per day? If you’re scratching your head, don’t feel like you’re alone! It’s a lot easier to identify the need for improvement than it is to determine WHAT you need to do and HOW you need to do it!

Effective processes drive productivity! In the Principles of Service Management classes conducted at the NCM Institute Center for Automotive Retail Excellence, attendees are taught how to develop, implement and flawlessly execute the following:

  • The interactive Walk-Around Process
  • The Menu Sales Process
  • The Additional Service Request (ASR) Process

How have you improved technician productivity in your store?  What are your greatest challenges to improvement?

Click here to learn about all our service management training options, including NCMi classroom, regional and on-site training opportunities.

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Permanent link to this article: http://blog.ncm20.com/2013/12/better-processes-improve-technician-productivity-and-gross-profits-2/

Dave Anderson

Building a High Performance Culture (Part Four)

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

mediocreWords that Hurt: Mediocre

In this fourth post on building a high performance culture I’ll present an additional word that falls into the “words that hurt” column of cultural makeup: the mindsets, values, attitudes and behaviors must be weeded out of your culture in order to preserve a sound foundation in your organization. For a quick review, I’ve presented the following words that work, and words that hurt, in the three past blog posts:

Words that work:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Words that hurt:

Fault: responsibility for failure. To use in a sentence: It’s not my fault I had a bad month. In other words, I’m a victim.

Blame: to assign responsibility for failure.

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

This post’s word that hurts is mediocre, which is defined as: average, ordinary, not outstanding. Many leaders believe themselves to have high standards, and to have already built high performance cultures. That being the case, and as repulsive to you as this grouping of words is—average, ordinary, not outstanding—honestly evaluate your culture and determine the following:

  • How many average, ordinary, not outstanding performers remain on your payroll, and why?
  • How many average, ordinary, not outstanding strategies, policies and procedures do you continue to stick with, and why?
  • Which average, ordinary, not outstanding belief systems do you hang onto that permits these situations to persist, and when will you replace them with a philosophy worthy of the excellence you claim to aspire?

Hear more on this topic from leadership expert Dave Anderson at The Best Training Day Ever™ in New Orleans on January 24th. Register all your dealership’s key managers for this exceptional day of training and networking alongside some of the industry’s leading dealership executives. Click the banner below to find out more. Tell them NCM Associates sent you: use registration code NCM2014!

 

Permanent link to this article: http://blog.ncm20.com/2013/12/building-a-high-performance-culture-part-four/

Dave Anderson

Building a High Performance Culture (Part One)

Culture Words that Work: Earn and Deserve

business-cultureAccording to class attendees, one of the most helpful parts of my Up Your Business 2.0 Super Leadership Workshop is when I have attendees create two columns on a page and write “Strong Cultural Words to Weave In” on one side of the page and “Weak Cultural Words to Weed Out” on the other side. Over the course of the two days I add to the list to create a blueprint of the mindsets, values, attitudes and behaviors you must embed in a great culture, as well as the destructive mindsets, values, attitudes and behaviors you must remove. Over a series of blog posts I’ll share words from each column to help you do the same:

Strong Cultural Words to Weave in: Earn and Deserve.

A. Earn: to acquire through merit.

B. Deserve: to be worthy of, to qualify for.

An “earn and deserve culture” repels entitlement. It sends the message that all team members will receive rewards, opportunities, promotions and discretion in accordance to what they’ve acquired through merit, what they’re worthy of, and what they’ve qualified for.

“Boss, why didn’t I get an end-of-the-year-raise?”

“Because you didn’t acquire it through merit. In our culture we reward results not requests, stepping up versus showing up. Let’s sit down and redefine expectations so you’ll more clearly understand how to qualify for, and be worthy of, additional compensation.”

Or…

“Boss, I’d like the next shot at management, after all I’ve been here the longest.”

“I sincerely appreciate your interest in advancing in our organization. However, in our culture we reward results over tenure; the person we promote will be he or she that is most qualified for, and worthy of, and additional responsibilities. I’m happy to lay out for you exactly what you can do to earn a shot at future promotions.” 

This is the first of a series of articles Dave Anderson is contributing to the Up To Speed blog on Building a High Performance Culture in your automotive dealershp. Be sure to watch for future articles in the series about every six weeks.  In the meantime, you can learn more about Dave from his bio, below, or visit www.learntolead.com.

leadingyourteam

Permanent link to this article: http://blog.ncm20.com/2013/07/building-a-high-performance-culture-part-one/

Garry House

Vehicle Sales OTDBs in the Service Lane…Part 1

Target-Rich-EnvironmentIt happened again two weeks ago! It seems to happen each time I talk about opportunities to do business (OTDBs) with a training group of automotive dealers and/or their managers. When I suggest the potential sales, trades and purchases available as a result of an effective prospecting initiative in the dealership’s service lane, I get that “deer in the headlights” look from the vast majority of my audience. C’mon guys and gals… As “Goose” (Anthony Edwards, as the co-pilot to Tom Cruise’s “Maverick” character) said in the 1986 movie Top Gun, “This is a Target Rich environment.”

As I’m sure you know, I’m all about the numbers and sales mathematics. So I’m going to take you through an exercise, by which you can determine how many unit sales are available through a service drive prospecting initiative at your dealership…assuming that all required processes are in place and are being effectively executed. Process details will be addressed in a subsequent article.

OK, here’s how to crunch the numbers and see how the mathematics work:

  1. What percent of the customer vehicles entering your service department each month are (a) those that should be replaced based on age, mileage, and/or condition, plus (b) those that would be a great addition to your pre-owned vehicle inventory? What was your overall percentage estimate for the two categories? Your answer is Variable #1.
  2. What percent of the owners in above category #1 do you think would be willing to discuss (by making an appointment) replacing their current vehicle with a new or nearly new vehicle, if they were approached at the right time, and in the right manner? Remember, these people are currently doing business with you, so they have a “relationship” with you. Your answer is Variable #2.
  3. Finally, what percent of the owners in above category #2 will you ultimately deliver after they have shown up for their appointment? Remember, these people are currently doing business with you, so they have a relationship with you. Your answer is Variable #3.

So when you multiply the three variables together (Variable #1  x  Variable #2  x  Variable #3), what answer do you get? This final metric, when applied against the total customer-paid and warranty R.O.s written in an average month, calculates the number of potential monthly vehicle sales as a result of the service lane prospecting initiative.

Every time I’ve performed this calculation for a dealership, the resulting sales potential was both shocking and impressive to the dealer principal and/or the dealership managers. If you’d like to learn more about developing and managing your opportunities to do business, I encourage you to check out our next webinar series on OTDB Development and Management in the Variable and Fixed Operating Departments beginning July 25th.

GMEPbanner

Permanent link to this article: http://blog.ncm20.com/2013/07/vehicle-sales-otdbs-in-the-service-lanepart-1/

Dennis Kane

Dealer Beware: Pitfalls of Selecting the Wrong Contractor or Subcontractor

paper_stacksmedI have seen a significant number of high value claims as a result of contractors or subcontractors not carrying insurance or inadequate limits of insurance.

Examples of high value claims against dealerships include:

  • Claim against a dealership’s workers’ compensation carrier or general liability carriers due to an injury of a subcontractor’s employee and the subcontractor doesn’t carry workers’ compensation insurance.
  • Claim against a dealership’s property insurance carrier because a roofing contractor started a fire repairing the roof and didn’t have adequate insurance.
  • Claim against a dealership arising out of work performed by a subcontractor to modify or perform specialty services on a vehicle.  The work performed was later determined to be faulty or negligent resulting in serious injuries and the subcontractor was out of business with no insurance.
  • Claim against a dealership’s liability carrier arising out of a contractor’s negligence for services performed while removing snow and the contractor didn’t carry insurance.

Here’s what you need to know:  You can be held liable for injuries to employees of, and the negligent work of, contractors and subcontractors. The good news is there are relatively simple steps you can take to reduce your exposures to high value losses.  Use this checklist for selecting contractors or subcontractors:

  1. Require the contractor/subcontractor to provide a certificate of insurance as evidence of coverage for Workers’ Compensation, General Liability and Umbrella Liability. It’s very important the limits of liability insurance are adequate. A good minimum standard for establishing the limit of insurance is requiring the same limits as your business liability insurance. This is effective to address inadequate limits by contractors and subcontractors. Review the effective dates of insurance to confirm the insurance is valid.Certificates need to be mailed directly from the contractor’s agency or carrier, not the contractor. This prevents contractors from issuing their own certificates to satisfy the insurance requirements and secure the winning bid without proper insurance.
  2. Require your company to be added as an “additional insured” on the contractor’s General Liability policy. You should require a copy of the endorsement from the carrier or the agency of the contractor.
  3. Ask your attorney to draft a “hold harmless and indemnifications agreement” that contains absolute defense and indemnification language and repayment of any expenses incurred in accordance with your state law to insulate you for any type of claim due to any inference of negligence. This agreement needs to be executed before work or services begin.
  4. Do not use “friends” or a friend of a friend to do any type of work, use only certified licensed contractors.

As you bid out work for your dealership, make the steps outlined above a required part of the selection process. You will find many legitimate contractors/subcontractors with excellent reputations for quality service and work willing to comply with these standards.  If any of the steps above can’t be provided by your contractors or subcontractors, it’s definitely an early warning of potential problems that need to be investigated further.

GMEPbanner

Permanent link to this article: http://blog.ncm20.com/2013/06/dealer-beware-pitfalls-of-selecting-the-wrong-contractor-or-subcontractor/

Steve Hall

Does Your DMS Match Your Actual Parts Counts?

Fotolia_36189691_XSHave you ever had this happen?  … A service advisor contacts your parts department to see if you have a specific part in stock. You check the computer system and it shows that you have it. A price is given, “Yes, we have it in stock” is told to the advisor.

The advisor proceeds to sell the job to the customer; the information is relayed to the technician who then comes to the parts counter to get the part. Your counter person goes to pick the part from the shelf, only to find the spot on the shelf is empty!

What happens now? You either have to pick the part up from another dealership, possibly hold the vehicle over while the part is ordered, or have the customer return at a later date. None of which are good end-results.

What caused this to happen and what can be done about it? If you believe that you “can’t sell what you can’t find” then you need to have systems in place to make sure that you can “find it.” Let’s look at a few basic rules for a parts department:

  1. Every part must have a “home.” A bin location must be assigned to every part that you have in stock. Even if you are cramped for space, you must designate a space for every part in your system that has an on hand quantity. This includes special ordered parts.
  2. Each bin or location should have a designated number for identification. Does the numbering system make sense? Can a new counterperson or stocker locate the appropriate bin quickly and efficiently?
  3. Each bin should be arranged in alpha numeric order. Shelves should have parts tags for each part that is stocked in it. This makes for easier, faster and more accurate stock replenishment.
  4. If space allows, leave the top and bottom shelves empty. This will allow space for growth within specific bins. You will need this as you add additional part numbers into your stock.
  5. Perform I-bin counts. Individual bin or “I-bin” counts should be a daily discipline within your department.

Items one through four are pretty basic, but I would like to expand more on item five. Parts managers should be aware of this term, whether they apply it or not. General managers or owners may not have been exposed to it, so let me explain how and why to perform these counts.

I-bin counts are used to check the accuracy of your DMS parts system vs. the actual on-hand quantity.  Ideally, they should be set up the following way:

First, make a spreadsheet listing each of your parts bins number. Have additional columns for the date the bin was counted and a column for who counted it. You should have one more column noting that there were, or were not, discrepancies found and adjustments to on-hand quantities.

Each day, the parts manager should print off and have on hand quantity or inventory sheet for the bins that need to be counted. Ideally, you should count enough bins so that you “look” at your complete inventory every 30-45 days. In most parts departments, this only a few bins a day.

Once the sheets are printed, the count should happen quickly. The reason for this is, if any parts are pulled after the sheets are printed you will show a discrepancy and have to research it before any potential adjustments are made. Normally it only takes a few minutes to count a bin, with the obvious exclusions of high-density drawers. In those cases, you may want to count a couple of drawers a day to break it into bite-size chunks.

After the count is completed, if you find any discrepancies, research them appropriately and if the count truly is wrong, make the adjustment in your system. At times you will have positive adjustments as well as negative adjustments. After you are finished with the bin, including the necessary research and adjustments, you should retain the count sheets for future reference.

On a side note, it is a good idea to have different people do counts periodically. Though we don’t like to think that any theft would happen within our store, it can happen. Having a variety of people doing bin counts will make it harder to cover up. As a general manager, be willing to go back and perform some counts yourself; it can be an eye-opening experience.

By doing the perpetual count and check, you will get to see how accurate your DMS and actual on-hand inventory really are. You might just find that the “missing” part in our example above was just stocked in the wrong location!

If you are interested in continued training for your parts manager, be sure and check out the upcoming NCM Institute Principles of Parts Management I and II courses that are launching this fall.

Parts_Acc_Sept

Permanent link to this article: http://blog.ncm20.com/2013/06/does-your-dms-match-your-actual-parts-counts/

Garry House

Tap Your Unsold Prospects for Incremental Sales

Unsold Prospects for Incremental SalesWe expect our salespeople to follow up on unsold prospects, right? But how consistent are their efforts, how intelligent are their strategies, and how are they being held accountable for results?Some proactive automotive dealers believe unsold prospect follow up is so important that they’ve made their sales management team primarily accountable through what we here at NCMi refer to as the ”Make-a-Deal” Meeting process.Briefly, here’s how the process is intended to work:

  • The desk manager responsible for closing in the evening must make sure that the daily desk logs and sales worksheets are complete and easily accessible to the managers who open the following morning.
  • Every morning promptly at 10 a.m., all Sales and F&I managers (and team leaders) assigned for duty will meet. Ideally, the Dealer Operator/General Manager should attend and lead this meeting. The purpose of the meeting is to review all unclosed deals (those on which we developed worksheets and “worked” the customer) and develop strategies to turn these deals into sales. If structured properly, this meeting should last no longer than 20 minutes.
  • Each potential deal is prioritized and assigned to a manager or team leader. The assigned manager is accountable to immediately call the customer and interview him about his previous day’s experience at the dealership. The objective is to quickly secure an appointment with the customer to revisit the dealership, restructure a deal and, if necessary, assign a different salesperson. The assigned manager has now personally assumed ownership of this customer.

There is nothing in a dealership sales department that (1) requires less time and effort, and (2) generates more vehicle sales than this proven process. In a medium-sized dealership an Every Day, Same Time, Without Fail, No Exceptions Make-a-Deal Meeting will result in 10-15 incremental deliveries per week. Here is how the math works:

Yesterday there were 6 appointments and 7 first-time walk-ins for a total of 13 opportunities to do business (OTDBs). The 6 appointments came from Internet leads, phone inquiries and salesperson proactive efforts.We delivered 3 vehicles to this group of OTDBs. The 7 first-time walk-ins had virtually no relationship with the dealership or its employees. We delivered 1 vehicle to this group of OTDBs.

Subtracting the 4 deliveries from the 13 OTDBs, we have 9 unsold prospects on which to focus our efforts in today’s Make-a-Deal Meeting.

With intelligent and consistent follow-up, coupled with accountability by our management staff, 1/3, or 3, of the unsold prospects should be converted to “be-backs.”  We should deliver 2/3, or 2, of the be-backs.

Assuming consistent performance with 6 selling days per week, there should be 12 incremental sales from the Make-a-Deal Meeting process (6 days multiplied by 2 deliveries per day).

Clearly the math illustrates the time spent on Make-a-Deal Meetings is well worth it. Do you have a consistent method for following up on unsold prospects at your dealership? If so, what’s your process and how many incremental deliveries does it account for each week?

The Make-a-Deal Meeting is one of the processes taught in the Principles of General Sales Management I class at the NCM Institute Center for Automotive Retail Excellence. To learn more about NCMi and our automotive management training programs, give us a call at 866.756.2620 for a schedule of upcoming GSM training programs.

Permanent link to this article: http://blog.ncm20.com/2013/03/tap-your-unsold-prospects-for-incremental-sales/

Joe Basil

What’s your job?

managers not working as a team!A top 10 nationally-ranked auto dealer called me recently and asked me to do an assessment. I said no problem, I’ll send the list of schedules that I need from your controller and we can get started. The dealer responded no, not that assessment, the management assessment that we did two years ago. Based on the urgent tone in his voice, I asked, “Tell me what’s going on?” The dealer explained that in 2011, the store had a record year in volume, market share and net profit. Based on that year, he and his team expected to surpass those results in 2012. Surprisingly, after the first quarter, their volume and net profit were down and market share was about even. He felt the management team had lost the spark that was there in 2011 and he couldn’t figure it out.

I proceeded with the project and began to interview each manager one-on-one. I had a list of key questions that helped frame and definitively pinpoint what the issues were. After interviewing five or six of the 18 managers, it became clear what had changed. Two questions were most revealing. The first question was “What do you focus on when you come to work every day?”  And second, “What did you used to do that made the store successful that you don’t do today?”

After compiling all the input, we held an off-site management team meeting including the dealer principal. One by one I went around the room and asked each manager, “What do you focus on every day when you come into work?” Their answers generally centered around their activities. For example, “take care of customers, sell cars, sell parts,” and so on.

When everyone was asked, “What did you used to do that made the store successful but has faded away?” The responses were very revealing. “We communicated better, we were better connected, we’re on the same page, each manager knew what the other manager was trying to accomplish, we worked better together as a team.”

So I asked all of them, “What’s your job?” The responses were a repeat of what they told me when asked what they focus on every day. When the dealer answered that question, he touched on the “key”: The dealer and the managers had lost sight of what their real job is every day, which was to “build and lead the team.”

As they listened to each other answer the question about what they used to do but has since faded away, they solved their own problem. They became so focused on activities that they forgot to focus on building and leading their team.

So if we asked each manager in your store “What’s your job?” how would they respond? And lastly, Mr. Dealer, if you were asked the question “What’s your job”? How would you respond?

Joe Basil is an Executive Conference Moderator with NCM Associates whose career spans 40 years in retail automotive. Joe is the former owner-operator of three franchised operations with strengths in operations turnaround, culture change, expense restructuring, finance, acquisition and divestiture, and human resources and regulatory compliance. To reach Joe, email jbasil@ncm20.com or call 913.317.6885.  

Learn to lead your dealership team to greater success!

Permanent link to this article: http://blog.ncm20.com/2013/02/whats-your-job/

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