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Tag Archive: Service Management

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/

Steve Hall

Three Hours Lost: Your Top 10 Service Time Wasters

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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/

Steve Hall

Service Managers: How Well Do You Communicate With Sales?

ServiceAdvisor

Processes…even the best processes don’t work if employees don’t understand them. It’s Monday morning in the service department. The day is off and running and a flurry of customer activity abounds.  Things are busy, but running smoothly. Just the way you (the service manager) designed it.

Now it’s about 8:45 and the sales department is just leaving their Monday morning sales meeting. A fairly new salesperson comes into service, walks up to you (the service manager) and says, “I sold a car Saturday, stock number Z1576A. We spot delivered it, but we need to have a spoiler installed that’s not in stock. Can you take care of it for me?”

You look at him, as if he’s a nobody and snipe back, “Where’s the ‘We-Owe?’ Did you already order it, or not? When is the customer scheduled to come back? Do you even know the color code for the spoiler or do you want me to just guess?” The new salesman looks puzzled and slightly embarrassed.

He thought his job was to sell cars, which he did. He thought the service department was supposed to help him when he needed it. Maybe he misunderstood the relationship. He thinks, “They just seem so nice to customers and so grumpy to the sales department. Why?”

What the new salesperson was not privy to was the sordid history, and possibly the proper and much-improved process. The service department knows they can’t order or install the spoiler without proper documentation and basic information from the sales department. That happened before recently, and they got the speech, “Don’t EVER do anything on a vehicle without receiving a sales manager-signed We-Owe.” They also know the salesperson doesn’t get a CSI survey to submit on the service department, so I (the service manager) can “teach him a lesson” on how to interact with service without the repercussions of a negative CSI survey.

Unfortunately, this type of scenario happens way too often. With turnover in the sales department, often times the sales managers are stretched just to train the salespeople on product knowledge and the vehicle sales process…and they never get to train the other necessary dealership processes.

This is where the service managers need to take charge.

We need to realize that if we want the sales department to be a “bell cow” to our customers on how great we are, we need to start treating them great. One way that I have found that improves this relationship quickly, along with strengthening processes, is to attend sales meetings on a regular basis.

When you (the service manager) attend a sales meeting, several positive things happen. Here are a few:

  • You get to know the people, and they get to know you. You are on the same team and this relationship helps everyone. You get to learn who people are. Now they have a name, not just the new salesperson who “knows nothing and wants everything.”
  • You get to answer their questions. Open communication between sales and service…now that’s REALLY a good thing!
  • You can train on a process or two – departmental or inter-departmental – every time you attend. Short, precise instructions to make the processes flow better. Yes, as you have turnover, you will have to re-train the process, but if you don’t, who will? Also, refresher topics can even help long-term people.
  • You will get a better understanding of what they have to deal with and you may become slightly more open to training someone…not just “barking” at them.
  • You may even learn a few sales training tips to help make your advisors more effective.

Whether you attend the whole meeting or just do your part and exit, it will be time well spent with one of your most important clients. The goodwill from this effort pays large dividends. Become a leader, a mentor, and have success the old fashion way: one person at a time.

At the NCM Institute, we believe every department should better understand the dealership as a whole. With that in mind, some of our clients purchase an annual training subscription and cross-train managers in different departments. Sales managers learn about service; service managers learn about used vehicles; parts managers learn about service; and so on. This greatly helps them understand the daily struggles each department has and helps them learn the importance of working together as one unit. Check into a more affordable way to help make your team stronger and ask about our annual NCMi training subscription and bundling options.

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Permanent link to this article: http://blog.ncm20.com/2015/08/service-managers-how-well-do-you-communicate-with-sales/

Steve Hall

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

Parts and Service

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Steve Hall

60 Seconds to Gain a Service Customer

Clock

Do you have 60 seconds to gain a service customer? Let me restate that: Do you have a structured 60 seconds to gain this customer? Why the emphasis on “structured”?  Let me explain.

Let me start with this.

If you are a dealership that doesn’t already perform an introduction of the new and used vehicle owners to the service department, then you aren’t quite ready to read this article. In that case, set the process in place, and get it started. Enough said?

Now, for the intended audience:

What does your customer introduction to the service department really look like? Think about this. You have just worked hard to gain a vehicle sale, and now your sales consultant completes the dealership “road to a sale” process by escorting the new customer to the service department for an introduction and to set the appointment for the first service visit. The salesperson stands with the customer in the service drive as the advisors are busily moving around. One of them is on the phone, one is with a client, and another is working on something, but we’re just not sure what. Five minutes pass by… OK maybe it’s only 45 seconds, but it feels like five minutes. Once the wait is over, the sales consultant and customer approach one of the advisors. The advisor glances around, looks at the salesperson and customer with a “what do you want” look, and he doesn’t even smile. Everyone can can tell that he’s distracted.

The salesperson tries to make the situation better and introduces the customer to the advisor with an enthusiastic phrase, but the advisor’s response is lukewarm. The advisor congratulates the customer on his purchase and says, “If you ever need anything, please let me know,” and then he hands over a business card.

At this point both the sales consultant and the service advisor feel that they have followed the process and have “done their job”.  But what really happened? Did the customer feel welcomed? Did the customer feel like you really wanted them to do business with you? Did your people provide anycompelling reason why this new customer should do business with you?

Your service department just had 60 seconds to win a customer – and you fumbled. Worse yet, you didn’t even realize the opportunity that you missed.

I am a firm believer that every new customer should be introduced to the service department, parts department, and the collision center. I am also a firm believer that these introductions should make a very positive impression on each customer. This is our time to shine! After all, this may be the only time that members of these departments ever get to see this customer, so we need to make a great impression.

To help you along the way, here is an introduction script that I developed for our NCM InstitutePrinciples of Service Management class.

Introduction Script:

Service Department Employee: Congratulations on your purchase. I would like to be one of the first to welcome you to our family. What type of vehicle did you buy? (as the customer talks, smile, nod in approval slightly, and listen… do not interrupt them.)

Customer: (Answers)

Service Department Employee: Terrific! May I ask what kind of vehicle you have been driving up until now?

Customer(Answers)

Service Department Employee: Well, we’re glad that you are joining our family now, and I’m sure that you will enjoy your (type of vehicle purchased). I would like to share a little information with you, so that you can feel comfortable anytime that you come in for service… 

  • (Point to the service doors.) You can see over here, these are the service entry doors. Any time that you need service, you will just pull up to them, and we will open them up and let you in. 
  • (Point to the service advisors.) Also, you can see the advisors over here. They will greet you and take great care of you any time that you arrive.
  • I would also like to reassure you that we are here for you. There is no reason to worry about anything pertaining to your vehicle, because we can handle it. Whether it is warranty work (which hopefully you will never need), routine maintenance, tires or anything… we can handle it for you. We offer highly competitive prices on everything, including oil changes. We will get you in and out quickly to make it most convenient for you.
  • But, most of all we want you to know that, since you have purchased your vehicle, you are now part of our family and we will take great care of you. 

Are there any questions that I can currently answer for you?

Customer: Not right now, I’m just excited to get the vehicle.

Service Department Employee: I’m sure you are. Here is my business card. Just know that if you ever need anything please let us know, and enjoy your car.

You can see that your employees will need to practice the script, but I’ve underlined the most important points so they are easier to learn. You will also need to modify it slightly for customers that are currently servicing their vehicles with you, but you get the concept. As a final tip, I suggest that the sales consultant carry a color-coded, bright yellow clip board when he escorts the customer to the Service Department. The yellow clip board signifies to the service department employees that the salesperson is accompanied by a new dealership customer and not a “heat case.”

Consistently perform and flawlessly execute the structured 60 seconds approach to win over the customer, and it will become one of the most profitable investments of time ever spent with your clients.

Permanent link to this article: http://blog.ncm20.com/2015/05/60-seconds-to-gain-a-service-customer-2/

Jeff Cowan

The Myths of Writing Service Part 1

writing_service

The automotive industry is filled with myths regarding service writing. I think they hang around so long because myths are convenient excuses not to change. They certainly give us license to be lazy and ignore problems!

Today, I list some of the most common myths surrounding the writing of service and hopefully, once and for all, make the many believers of these myths see otherwise.

Myth: If you write service and have a high closing ratio and high customer paid repair order averages, then it is impossible to have high survey scores and/or high customer retention.

Fact: I know hundreds of service writers who complete the trifecta month after month year after year.  The difference is how hard you are willing to train a person and hold them accountable. If you expect and allow the myth to come true, it will, but it doesn’t have to. Think high-end restaurant here.  If you visit a five star restaurant, like Ruth’s Chris you will experience servers that please people, sell plenty of appetizers, desserts and drinks, and have people return in the future and request them.  As a matter of fact, if they cannot do those things, their service will not be retained and they will be let go. They accomplish the trifecta because they are trained to and then held accountable.

Myth: It takes at least a year before a service advisor can be a top producer.

Fact: If it takes that long, you simply hired the wrong person, did not train the person to be successful, or the person has no goals and desire to perform. If a new service writer is not meeting or exceeding your minimum standards within ninety days of their start date, it is likely they never will. If this is a concern for you, change your interview practices and/or your training program.

Myth: Finding a great service advisor is next to impossible.

Fact: The average service writer makes $65,000 annually, gets two weeks paid vacation, and has a benefit package that rivals some of the biggest industries.  An employment package like this puts them in the top twenty-five to thirty percent of income earners in the country. It allows them to have a house that will average 2300 square feet and drive a new vehicle in the thirty-five thousand dollar range.  And if they have a spouse that works, add in another vehicle and another eight hundred square feet of house.  All that said and you can’t find these employees? You need help with your ads, your interviewing techniques and help in knowing how to sell a marvelous, highly satisfying, and rewarding career like service writing.

Myth: A great service writer rarely makes a great manager.

Fact: Not if you pull them out of their job writing service one day and then stick them in the manager’s chair the next without any coaching.  The mistake I see here is we constantly put people in management because they understand the technical side of the business, are well liked, and appear to want to go the extra mile.  The first and most important thing to look for in a new manager is their ability to lead, make decisions, and make those around them better. Those are things, just like the technical side of the business that can be taught and learned by a willing student. To develop tomorrow’s leaders from today’s service writers, you have to teach them how to lead and make good decisions as they perform today’s job. Teach them to prepare for the next step up the ladder as they occupy their current step.

Myth: Service writers can handle more than fifteen customers a day.

Fact: Not if you want to have high survey scores, high customer retention, high closing ratios, high customer paid sales and the maximum profits. For years, I have said this in nearly every meeting I conduct. If you allow your service writers to write more then fifteen repair orders a day, then forget about the high numbers in the fore mentioned areas. If you choose that path, you are now limiting your service writers to be high volume clerks.  You can and will make some profits off the high volume sales template, as that is the very way most dealerships allow their service writers to work. But the other numbers simply will not be there for one reason: lack of time.  If you want to have high survey scores, customer retention, closing ratios, hours per repair order, and maximum profits, you have to give your writers the time to sell and work with the customers. You only have the right in my mind to expect high numbers in all categories if you limit and control the number of tickets written in a day to fifteen or less.

Myth: Service writers will not do what is asked of them like walk around vehicles and memorize word tracks or respond well to authority.

Fact: No, they do not respond to weak leaders and weak leadership.  If that is your problem, then your problem is clearly a question of you or your manager’s ability to lead and command respect. Think of your service writers as vendors.  It is a business deal.  You require them to do what you ask, and they either do it and get to remain on your preferred vendors list or they do not do what you require and you find a new vendor.  Easy to do. Read myth three again.

Myth: It takes a special service writer to be able to handle high line vehicles because high end customers are different.

Fact: High line customers are rarely different than the non-high line customer.  As a matter of fact, they many times are the same exact customer. Literally.  For example, I drive a Mercedes, my wife drives a Ford.  Furthermore, look at the very street I live on.  There are fifteen houses.  Each driveway has either a Mercedes, BMW, Audi, Porche, Tesla, or Lexus in it. In addition, each of those driveways is Ford, Chevy, Toyota, Nissan, Hyundai, or Honda. Regardless of which vehicle we drive, we simply want to go to a place where they are enthusiastic, caring, honest, can get the job done, and where their skill and approach make us want to return for future visits. My CFO is a perfect example.  When she needs service, she drives past her Infiniti dealership to do business with the Toyota dealership simply because, in her words, “I get better service at the Toyota dealership.

As I have noted many times, I am a student of history.  Studying history I have seen time and time again that once a myth is dispelled, great advances routinely follow. In the future, whenever you hear something that sounds like a myth or hear an excuse from your staff and those in the business that impedes your ability to advance; question it, challenge it, and test it before succumbing to its restraints. Then you will be poised to break free from the myth’s chains that bind and make advances that will make your Dealer Principal happy. Because, in the end, it gets down to one simple fact-like being married, if the Dealer is happy, everybody is happy – and that ain’t no myth.

Jeff Cowan is considered the creator of the modern day walk around and selling processes for service departments everywhere. His company, Jeff Cowan’s PRO TALK, Inc. is recognized as North America’s number 1 fixed operations training company.

©Copyright Wm. Jeff Cowan 2015

Permanent link to this article: http://blog.ncm20.com/2015/02/the-myths-of-writing-service-part-1/

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.


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

Jeff Cowan

Six Tips to Having Your Best Service Year Ever

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As the tide rolls out on 2014 and we look ahead to the new incoming tide of 2015, it is time we sit down and start to plan for what I believe will be a record year for service department sales.

Since the recession began back in 2008, I have witnessed many service departments experiencing their best years, year after year. Although the number of service departments having their best years has not increased much with each passing year, those who are having record years understand that it is not happening because of luck. It is happening because they are identifying their roadblocks, developing plans to navigate around those roadblocks, setting minimum acceptable standards, and executing.

Having worked with literally hundreds of these successful service departments, I will share with you their secrets of how and why they are so successful.

Tip #1:

They have processes that have created a sales culture throughout their entire service department — processes that guarantee no matter who a customer speaks with in the service department, they will be spoken to and handled in the exact same way. The managers in these successful stores understand that just like in selling, you have to take control of a customer, and they understand that you must do the same with your staff. Take control of them, train them, require the memorization of word tracks and processes, and then make sure your staff executes. They fully realize that if they are not in control of their staff and their customers, their staff and customers will control them.

Tip #2:

They have all the latest tools needed (including multi point inspection processes) which are utilized to their fullest by both their technicians and their service advisors. They have tablets to make the check in process cleaner and quicker. They have up to date displays which are inviting and easy to work from. They have processes in place to maximize the technologies of email, texting, telephones and video to communicate to their customers in the most efficient ways possible; ways that today’s customer welcomes with open arms.

Tip #3:

They have some type of rewards system that remunerates their best customers for repeat business. Think airline mileage programs. They know that these types of programs are what truly accelerates customer retention, and they never rely on cheap prices and coupons. That said, they will use coupons, but with an advertised “value price” and not necessarily the cheapest price.

Tip #4:

They have processes to guarantee that every declined service and every missed check in time is followed up within 24 to 48 hours, maximizing every opportunity and showing their customers how serious their shop is when it comes to maintenance, repair, and providing great service.

Tip #5:

They approach training from the stand point that training is not something you did. It is something you do – forever. They have a basic training course that every service employee must attend when first hired, where they earn a certificate. This is followed by weekly fifteen minute sales meetings, capped with a monthly hour long sales meeting, where strengths and weaknesses are examined and corrected as needed. They typically have a recertification meeting once a year, because they believe all training certificates should come with an expiration date. They also look outside their own business for training, to make sure that they do not become stagnant and that their message does not grow tired.

Tip #6:

They schedule annual meetings with each employee to discuss goals, each individual’s role, and what they are being held accountable for. They have a briefer quarterly meeting to make sure that their goals are on track and stay on track. Their mantra tends to be, “It is not about any single employee; it is about every single employee.”

In addition to all of these major items, there are minor things they do as well to ensure their success. They take this seriously and execute it with great enthusiasm, because they clearly understand that if the customer is not “wowed” every single time, there may not be a next time. They get that they are there for the customer and if there is no customer, there is no job security.

As many of you know, I am out in the field on a consistent basis and have been for over 29 years. I may not know everything, but I see a lot. I receive telephone calls all the time from dealers and managers asking exactly what these dealerships do to have these record years. That question arises in nearly every meeting I am in. When I spell out what I have spelled out here, a few heed the advice and steer their ships toward newer and greater horizons. However, many more write it off as too much work or unrealistic and remain on the same ship in the same rough waters, never seeming to realize that it is they who need to simply plot a new course and guide their ship to discover these newer, bigger horizons that await all who are willing to navigate the waters.

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Permanent link to this article: http://blog.ncm20.com/2014/12/six-tips-to-having-your-best-service-year-ever/

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/

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