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Tag Archive: Service Department

Steve Hall

Curing the Fixed Ops Hangover

Monday morning again

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

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

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

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

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

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

What causes the Fixed Ops Hangover?

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

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

Stopping the Fixed Ops Hangover

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

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

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

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

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

NCM Institute

#AskNCM: My service advisors can’t meet at the same time. How can I train them?

This question comes up during every service management class at the NCM® Institute: How can I train my service advisors when we can’t all meet as a group? It’s a challenge that every service department faces, whether you’re a big shop or small.

NCM expert, Steve Hall, gives you his take on the problem and offers his “coaching from the sidelines” technique as a solution.

Have you tried Steve’s technique in your service department? How did it go? Want to #AskNCM a question? Leave a comment below, and we’ll answer it!

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

NCM Institute

Developing the right pay plan for service advisors

Mechanic wrench tool

Last week, George Gowen wrote about the importance of service advisors to retaining your customer base (Miss it? Check it out.) This naturally leads to the question: How much should I be paying them?

Taking Stock of Service Advisor Pay

Before you make any decisions about your dealership’s pay plan, you need to carefully evaluate the current market, as well as your budget constraints. In general, NCM recommends that you consider the following questions:

1.     What’s your philosophy towards advisor compensation?

2.     What’s the right amount to budget for advisor compensation?

3.     Should advisor productivity affect advisor compensation levels?

4.     In addition to monetary compensation, what other elements do you want to include in a well-balanced advisor pay plan?

What’s your philosophy towards advisor compensation?

Most dealerships have begun to view their service department as a “selling” organization, not just a “fix it and smile” division. When you take that philosophy, your compensation plans must focus on sales activities and results. To achieve this, your advisors will need to improve their customer R.O. transactional quality while decreasing their customer R.O. transactional quantity. This could result in the need to add more advisors.

What’s the right amount to budget for advisor compensation?

When it comes to service advisor compensation budget, NCM recommends using 12.0% of department gross (before any parts gross transfer) as the metric for budgeting service advisor compensation. This budget guideline may vary sometimes—a little higher for domestic franchises and a little lower for luxury franchises—but relating compensation to performance is an important step. And, remember: budgeting refers to how much you should pay, while structuring refers to how you could pay.

Should advisor productivity affect advisor compensation levels?

Advisor productivity is a critical component of compensation. You must clearly define this connection, and let your service advisors know that their income will be dependent on it. Set expectations and get their commitment to this approach. After all, it’s advantageous to them: an advisor with high transactional quality and CSI, could earn as much as 14% of the gross he/she generates; meanwhile, an advisor with below average transactional quality and CSI, might earn as little as 10%. When your service directors understand this, they will do what’s necessary to improve their pay.

What other elements do you want to include in a well-balanced advisor pay plan?

This is harder to answer. Here’s the thing: there is no “one size fits all” solution to automotive pay plans. What works brilliantly for one dealerships may be an absolute disaster in your shop. Each dealership has a different business culture that impacts pay plans. And your franchise requirements, personal priorities and state and local laws will all significantly influence the decisions you make on pay plans.

Structuring Service Advisor Pay Plans

While you must keep in mind that every dealership is different, here are the general recommendations that NCM has for any service advisor pay plan:

 

1.     Service advisor pay plan structure should be 100% incentive based, with a reasonable underlying guaranteed draw against commission.

2.     As billable hours is the force driving service and parts profitability, the main determinant for pay should be Hours Billed per Individual Advisor per Month, with $x.xx paid for each hour billed, in all labor categories. We’ve seen this as a stand-alone compensation metric, as well as combined with either customer effective labor rate or hours per customer R.O., sometimes both. This category might represent 55% – 70% of the plan structure.

3.     CSI Performance is usually the next element. The advisor should be rewarded for achieving world-class service. The payment can be quantified as “an additional $x.xx paid for each hour billed” (see #2, above). Depending on how much manufacturer money is tied to CSI, this category might represent 10% – 20% of the plan structure.

4.     Next up are the Spiffs and Incentives, which cover such things as: (a) Parts Sales per Customer R.O.; (b) Customer Effective Labor Rate; (c) Menu Closing Percentage; (d) Tire Sales; (e) Service Contract Sales; (f) MPI (ASR) Closing Percentage. The payment might be quantified as an additional $x.xx paid for each hour billed (see #2, above), as a flat amount or as a per item amount. This would represent approximately 15% of the plan structure.

5.     The final category is a Team Incentive based on Percent of Total Monthly Shop Hours Objective Achieved. The intent here is to have all service and parts personnel focus on one number—total shop production capacity— throughout the month. Their goal is to achieve or exceed full capacity operations. You may quantify the payment as an additional $x.xx paid for each hour billed (see #2, above) or as a flat amount. This should be about 7% – 10% of the plan structure.

Pay plans are tricky. What successes have you had in creating and implementing pay plan changes? Tell us below.

 

Permanent link to this article: http://blog.ncm20.com/2016/01/developing-the-right-pay-plan-for-service-advisors/

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/

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/

Steve Hall

Sales Management Responsibilities of the Service Manager (Part One)

servicemgr

At the NCM Institute, we have something we call the “35 Responsibilities of the Service Manager.” Today, I would like to go over six of the sales management responsibilities from 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!

The Road to the Sale Process

In the sales management category, the first process the management team must “own” is the road to the sale process.

I’m sure your dealership has a fully documented road to the sale process for the sales department and that every salesperson can recite it back to you and they follow it to maximize your sales department closing percentage.  But, do you have a documented road to a sale for the service department?  In our nearly 4,000 dealerships that we process data for, the average service advisor generates more labor gross profit per month than the average new and pre-owned sales person generates selling vehicles.  Consistently, the advisors average about 20% more gross profit than the vehicle salesperson.  This disparity is much larger when you consider the vehicle salespersons’ average includes the F&I gross profit generated, yet the service advisor’s average doesn’t include the parts gross profit they generate.  With so much riding on the service advisor, shouldn’t they have a documented, trained, and followed road to the sale process to drive increased dollars per repair order and customer satisfaction?

Sales Training for the Service Staff

The second responsibility under the sales management category is sales training for the service staff. Performing consistent, let me repeat that one word, consistent, sales training for all service customer contact personnel to improve their skills in recommending services, overcoming objectives and closing the sale is a key, yet often neglected responsibility.  Unfortunately, too often service managers know how important this training is, but often don’t know how to perform it effectively, so they just don’t do it at all.   With this in mind, don’t be afraid to involve other people for this training.  Whoever performs sales training for the new and pre-owned vehicle departments could be used for a portion of this. You might also consider some outside assistance.  Your tire supplier will generally provide no cost training on tire sales and presentation.  Other suppliers offer sales training, just be sure their content and tactics match what you want.

Vehicle Walk Around Process

The third responsibility I would like to share is the service vehicle walk around process.  Do you ensure the vehicle walk around process is part of your service sales culture?  Do all of your advisors understand that performing a vehicle walk around with each client is a condition of employment?  Many times when we talk about walk arounds, we never explain the “why” to our employees.  They typically come to the conclusion that it is to look for damage on the vehicle and to “protect” the department.  Though that can be a side benefit of the vehicle walk around process, the real reason for the walk around it to build the relationship with the customer.  This is why you must have the customer present when preforming the vehicle walk around.  Take the time to train your people on the real reason to do this and they will be more likely to actually perform it.  Encourage them to use what we call the F.O.R.D. system during the walk around.  The F.O.R.D. system is just an acronym standing for Family… Occupation… Recreation…. and Dreams.  When performing the walk around, teach your advisors to look for car seats, sporting equipment, bumper stickers or other items that will give them insight into the customer’s interests and activities.  Use these to start a relationship-building conversation.  Remember, people purchase from people they like and trust. You must build that relationship and it all starts at the vehicle during the vehicle walk around.

Menu Sales Process

The fourth sales management responsibility is the menu sales process.  Do you have a menu sales process?  Is it consistently followed by all of your service advisors?  Do you track menu closing percentages versus opportunities?  Let me define what NCM considers a menu opportunity.  We consider a menu opportunity to be any vehicle that is within 1,000 miles plus or minus from its factory recommended service.  In order to maximize this opportunity, you must build your menus on a competitive basis.  You will need to price shop your competitors on this, particularly the franchised mass merchandizers and local independent repair facilities.  In addition to selling the factory scheduled maintenance, you should also use the menus to support the selling of detailing, tires, accessories and other ala cart items.

Today’s Special Board

The next responsibility I would like to cover is the ‘Today’s Special” board.  You should have a professional, daily special board to offer items you need to sell seasonally, that have little activity, or that you wish to otherwise promote.  Think of this as the gum, candy and magazines in the register line at the market.  The items displayed on the daily specials board are typically impulse items along with reminders of often forgotten items like wiper blades, detailing or tire rotations.

Tire Merchandising

Item number six is tire merchandising.  You must make sure your customers immediately see that you are actively in the tire business as soon as they enter you service write up area.  Having a great looking tire display with installed prices for show-and-tell greatly assist in the selling of tires.  Tires are a major point of defection for clients.  We must make sure they know you are in the tire business and are highly competitive.  If you do tire price matching, make sure that is displayed for the customer, and used to build value in the way that you price your tires.

As you can see, these six sales management responsibilities are very important to follow to reach success in day-to-day operations and will set your business apart from the competition.  Please join us next week as we discuss five more sales management responsibilities.  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.


Want to learn more?

NCM OnDemand provides virtual interactive training that translates into better productivity and higher dealership profits. Take a free test drive by clicking here.

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

Robin Cunningham

How Much Service are You Providing in Your Service Department?

pe0075011.jpg

In order to write this blog article I am compelled to admit that on occasion I will visit… a fast food restaurant. The reason I say it that way is that I am generally known as a very healthy eater who takes pretty good care of himself. That being said, if I leave too little time to get somewhere and I need to eat something, it can happen.

Recently I was working off-site, but had to get to an NCM team meeting at 1:30 p.m., but had cut it too close, given that I had not yet eaten anything that day.  As I was driving towards our offices I was mentally deciding my options. it turned out itt was going to have to be faster than I wanted. I knew I was going be near a McDonald’s that was on the way. I vaguely remembered it being closed some time back for a remodel or even a brand new building, but I had not been there for many years so I didn’t really know. As I walked in I was impressed about how fresh, modern and well, un-McDonald’s-like it was.

As I walked in I was greeting by a well-dressed, middle aged woman who smiled and said, “Welcome back!” I had to smile because I had not been there, of course, for years. So, I instantly knew something different was going on. I stepped up to the counter and a very well-dressed, middle-aged man wearing a tie, with a big smile, greeted me and started telling me about the daily specials.

While my order was being put together I walked into the restroom to wash my hands. As I turned around for a paper towel, the dispenser was empty. There was a hand dryer on the wall, but I could not get it to work. I walked out the door with wet hands to tell someone and it seemed like within seconds another well-dressed, middle-aged man came up to me and asked me if he could help. I told him what was going on and he took me back into the restroom and showed me the sensor on the hand dryer that I had missed and proceeded to dry my hands.

I came out, got my food and sat down to eat in view of people walking in and being greeted with “Welcome back!” I really was amazed at the level of service being provided and knew for a fact that this just doesn’t happen by accident. On my way out I approached the woman who was greeting everyone, told her what type of work I did and that I really appreciated and respected what was going on there. She smiled and said it was a new way of doing things and it was decided that the best place for the store manager to be was out in front greeting and being involved with the customers during peak times.

I have to admit, this experience was so different than I would have ever imagined that I knew I was going to write about it.. I know of another McDonald’s not that far away that is completely different. You walk in and there might be one person working the counter that has three registers, with many people standing in line to be waited on. When you look around to see if anyone might be in charge, it would appear to be some industrious, but very young person and lots of other very young people standing around not even really trying to look busy.

So what in the heck does this have to do with how much SERVICE you may or may not be providing in your Service Department…or any department for that matter? Do you have a morning rush on your Service drive that prevents your advisors from having the time to properly greet your customers? This, of course, is required in order to build the relationships we need with our customers if we expect them to stay loyal to us. But just as important, it’s to make sure we are able to identify everything these vehicles need while they are in our care and custody…and sell that work today!

Actually we should already know all or most of that information by the way the reservation process was handled when the customer called us. And ideally that call was not handled by our service advisors. By the way, where are your general manager and service manager during this peak timeframe? At McDonald’s, the store manager was on the “service drive.”  Just sayin’….

Are we actually ANTICIPATING our customer’s arrival as much as is possible? If we have too low of Labor Gross Profit margins, too low Hours Per Repair Order and too low Effective Labor Rates, this is one of the primary causes.

As retail automobile dealers, our competitive advantage is to provide GREAT SERVICE. If we stage it right and anticipate what is really happening on our Service Drives, we can be very profitable. Why would customers not want to come to our new or remodeled facilities when we have: loaner cars or shuttles, and in many cases, beautiful waiting rooms with flat screen televisions, espresso machines, wireless Internet, etc.? We should be as competitive as the Independents with our competitive and maintenance labor categories and we can be profitable doing it.

One definition of SERVICE I found was: an act of helpful activity; help; aid: to do someone a SERVICE.

As our good friend Dave Anderson says: “Give it a try!”


Robin Cunningham is an instructor for the NCM Institute Center for Retail Excellence and one of the featured trainers in NCM OnDemand, a new virtual training and communications platform for NCM’s Dealer 20 Group members and other automotive retail dealers who desire 24/7 skills development and better employee communications processes.

Click here to take the 24-Hour Test Drive.

 

Permanent link to this article: http://blog.ncm20.com/2014/03/how-much-service-are-you-providing-in-your-service-department/

Garry House

The Importance of the MPI-ASR Process

wrenchesBack in May of this year, I published a blog article focused on the difference between good and great automobile dealers and I promised to follow that up by discussing what we, at the NCM Institute Center for Automotive Retail Excellence, have learned about the differences between some of the good and great processes employed by these dealers. This is the second of those follow-up articles.

What is the MPI-ASR process? “MPI” is an acronym for Multi-Point Inspection. “ASR” is an acronym for Additional Service Recommendation or Additional Service Request. The two together make up The Process. By definition, an ASR is necessary work discovered by the technician, in his stall or on his lift, during the performance of a Multi-Point Inspection, which has nothing whatsoever to do with the customer’s primary concerns. It is therefore often referred to in the dealership as the technician up-sell process.

Most every experienced fixed ops director and service manager that we work with at NCMi recognizes and admits that a well-designed, habitually-performed, and flawlessly-executed MPI-ASR process will provide more fixed gross than any other available service department opportunity. One of the exercises in NCMi’s Principles of Service Management I class continually demonstrates that a well-managed MPI-ASR process in a 15-technician shop will produce an incremental net profit of at least $250,000 per year.

Both the good and great dealership fixed operations professionals understand the need for a sound MPI-ASR process, however, very few (only the “great” ones) know that their MPI-ASR activities must be continually trained, monitored, reinforced, and enhanced in order to avoid process evaporation.” Following are the 10 components of what the NCMi faculty believes to be a great MPI-ASR process.

  1. Ensuring that a sound MPI-ASR process is anchored within the culture of the service department. Strict adherence to the requirements of this process must become conditions of employment for service advisors, service technicians, service support personnel, and service management.
  2. Performing Multi-Point Inspections on 100% of the vehicles accessing the dealership service operations (including express service), beginning with the first service visit following vehicle delivery.
  3. Continually educating the customer as to the value of the Multi-Point Inspection process and consistently obtaining the customer’s permission to perform the MPI.
  4. Ensuring 100% documented feedback to the customer of the results of the Multi-Point Inspection, even if no out-of-line conditions were discovered.
  5. Conducting regular technician training sessions (a) on how to perform a “quality” MPI, (b) on understanding the standards relating to “within-line,” “marginal,” and “out-of-line” MPI line items, and (c) on clearly and effectively communicating the results of the MPI. Conducting regular service advisor training sessions on how to advise the customer of ASRs and on how to overcome objections in closing the sale of these ASRs.
  6. Based on valid industry data for vehicle age and mileage, defining and communicating expectations to technicians for:
    • Ratio of ASRs to MPIs
    • Number of Line Items per ASR
    • Number of Flat Rate Hours per ASR
  7. Based on valid industry data for sales effectiveness, defining and communicating expectations to service advisors for sales closing rate on ASR hours requested by technicians.
  8. Ensuring that there is a disciplined “second effort++” program to sell declined ASR work is employed, both with the customer when he/she is still in the dealership and/or after the customer has exited the dealership.
  9. Developing and implementing a system to measure and report the results of the MPI-ASR process on an accurate and timely basis. Without the availability of current procedural technology, this step is, without question, the most difficult and painful in the overall process.
  10. Installing and instilling a highly-visible score-boarding discipline to internally display, on a month-to-date basis, the most current MPI-ASR recommendation frequency and quantity by technician and sales results by service advisor.

And, yes, you guessed it! Within the NCMi Service Management training curriculum, we do teach the details of each of the above 10 MPI-ASR Process components.

Training Solutions for Service Managers sept oct

Permanent link to this article: http://blog.ncm20.com/2013/08/the-importance-of-the-mpi-asr-process/

Garry House

Does Your Service Department Have a High-Performance Culture?

strategies and tactics

At the NCM Institute Center for Automotive Retail Excellence, the training that we provide in our Service Management courses focuses primarily on strategies and tactics. However, we have discovered that the effective execution of the strategies that we teach is most often hampered by an important missing ingredient: most dealership service departments do not have a “high-performance culture.” And as noted management thought leader Peter Drucker said, “Culture eats strategy for breakfast.” Without a strong and persistent focus on workplace culture, technical knowledge and business expertise alone will not optimize service department sales, gross and profitability.

To gauge whether or not you have a high-performance culture in your service department, ask yourself the following questions:

  • Are your service advisors, technicians, and support personnel fully engaged? Are they producing at 100% of their capability? Do they love what they do and look forward to arriving at work each day because of the passion they have for serving your clients and each other, finding it meaningful, challenging, and fun?
  • Does your service manager lead from the front (in the service lane and on the shop floor) or from the back (in his office)?
  •  Is your service department a “selling organization” or a “fix it and smile organization?”

Employee engagement is a problem in the retail automotive workplace. We find in every dealership we have the opportunity to work with, that employees actually care less about the bottom line and more about their inner wellbeing. People will sacrifice wages for a positive business culture. So what are the values you need to employ to create greater employee engagement? Research shows that the following represent some of the key elements that the best employees desire from the workplace:

  •  Clear performance expectations
  • Coaching that develops employee skills and potential
  •  Resources that enable employees to do their job right
  •  Opportunities to do their best work
  •  Sincere and genuine recognition and appreciation for efforts
  •  Meaningful participation in matters that affect them
  •  Encouragement and support for development
  •  Fair, equitable and respectful treatment
  •  Genuine concern for them as a person.

The four service management training programs (and also the Webinars) offered by NCMi include significant emphasis on Accountability Management and Leadership…the cultural drivers of employee engagement, sales and productivity. We recognize that great leaders focus on building positive, lasting relationships with the people they lead…and they should be sensitive to how they are perceived by their direct reports. This approach requires department managers to:

  •  Identify and communicate the important aspects of the employee’s position
  •  Designate and communicate what acceptable performance looks like
  •  Communicate clearly to the employee what performance is expected and how performance will be rated
  •  Communicate performance feedback and conduct performance discussions during the rating period, and evaluate performance based on the agreed-upon performance targets

There should be little doubt that the operative word is “communicate.”

Improving workplace culture shouldn’t be reserved just for service departments with obvious issues. It can also help well-performing dealerships progress to their full potential. Once the store’s leaders recognize that the behavioral culture is as important to success as are resources, processes, marketing and the rest, enhanced employee engagement will follow. Culture optimization needs to go hand-in-hand with the dealership’s business strategy. Service departments that integrate cultural optimization into their day-to-day business practices are far more likely to position themselves for success. In most instances, what is good for your people ultimately proves good for your business.

training for service managers

 

Permanent link to this article: http://blog.ncm20.com/2013/01/does-your-service-department-have-a-high-performance-culture/