Andy Church shares why prospecting is incredibly important in this Quick Tip.

ProfitByAction.com Quick Tip on the essential Follow Up actions required to ensure your plan is achieved and success delivered.

ProfitByAction.com Quick Tip on the importance of getting the buy-in and agreement of all Dealership Management as part of the Planning Process. Once everyone has agreed to the plan, set appropriate actions

ProfitByAction.com Quick Tip on the importance and the role of the team meeting as part of the overall Automotive Business Planning Process.

ProfitByAction.com Quick Tip on the home work required before you start your Dealership Business Plan.

It is widely known that Service is the lifeblood of all dealerships and, in many cases, keeps dealerships financially in the black. With the inundation of service requests by consumers, largely due to the increasing amounts of recalls that we’ve seen in the last few years, service departments are finding it more difficult than ever to accommodate all of the customers that need their attention in a timely manner. Shortages of technicians, and shop capacity diminishing due to demand, can easily see service advisors move away from a consultative selling mode and move towards a “get ‘em in and out!” mentality. While it’s easy to see how this could happen as service advisors – and dealerships – want to accommodate as many customers as possible, dealerships are skipping sales steps in the name of efficiency and customer experience and leaving money on the table.

So, here are a few tips that you can utilize when it comes to service recommendations. As a Dealer you should be holding your Service staff accountable for ensuring they are taking advantage of the opportunities and explaining how important they are to the overall profitability of the dealership:

Let’s start with the multi-point or “courtesy” inspection that should be completed on every vehicle in for service. Of course, every service advisor will present the results of the inspection to the customer. The question is that, as service advisors get busier, do they miss things that could easily increase “upselling” in service? And it starts by showing the customer what passed! If you present the items that passed and then those that are recommended you will be off to a great start! Now on to the tips…

1. Service Advisors Forget to Sell - Customers don’t necessarily “want” to spend more money for services that they weren’t expecting, but many will do so if they are convinced that the vehicle’s safety and life will be negatively affected by not doing so. Informing a customer that their vehicle needs X service and that it will cost $X without explaining what the service is, why it’s important and what the consequences of not doing the service, gives the customer an easy way to decline the service, and so the service advisor moves on. The problem is that oftentimes customers decline service not because they don’t want to keep their vehicles maintained and operating safely, but rather because the service advisor has not explained fully why it’s important. Service advisors should always take the time, no matter how busy the service drive is, to fully explain the reasons for the recommendations and the impact failure to complete them could bring.

2. Review Service History - many service advisors fail to review past service visits and reinforce the need to complete previously declined recommended services. Many customers take service recommendations with a skeptical perspective, so unless they’re a gearhead, they many not truly understand why or how important a recommended service is, and so they decline it – even if it’s just being declined “for now” in their minds, thinking “I’ll go ask a family member or do some research, to see if I really need it”. Then of course they get busy and forget about it and even if they did go ask that family member or do that research, they forget the answer by the next visit. You can’t tell a customer that they need new brake pads or tires on one visit, then, assuming the brake pads or tires weren’t replaced in between, fail to reaffirm it 3-6 months later! That kills their confidence in the advisor and the Dealership!  

Ensuring that technicians are continuing to “re-recommend” any previously declined services from each customer accomplishes two things:

-         It reinforces the integrity of the original recommendation

-         And builds trust while reminding the customer that they needed this service

Depending on the technician that did the MPI in each visit, recommendations from previous visits could differ from a current visit. By “re-recommending” previously declined services, the dealership stands a better chance of capturing that service business. The only valid reason not to “re-recommend” a previously declined service is if a customer informs the service advisor that they had the service done elsewhere and the technician can visually verify that it was.

3. Time is of the Essence - How many services get declined for the simple reason that the customer wasn’t contacted in a timely manner to get permission to do the additional repairs? If the advisor waits until later in the day to contact the customer often the only reason they decline it is because they think their vehicle won’t be ready when they needed or expected it. Research time and again proves the faster the MPI is completed and the customer contacted, the higher the likelihood that the customer will agree to the additional services assuming that everything is explained properly by the service advisor.

What rational customer does not want to keep their vehicle running properly and safely? Cars tend to be the second largest purchase that a consumer makes in their lives and they rely on their vehicles to transport themselves and their families to work and school safely. The loss of a vehicle can be financially devastating to many American families. The mere fact that the customer is at your dealership versus having a family member or local mechanic do the work means that they not only value the quality of service that a dealership provides, but that they are also relying on the experts at your dealership to let them know what, if anything, their vehicle needs.

The bottom line is, if you make sure that your service advisors are being thorough in their service recommendations to every customer, then reinforce and validate any past declined services and verify the best contact methods with each customer to ensure fast communications and recommendation resolutions, you will see less declined service and higher repair order values!

Do you have a suggested blog topic? Email me at andyc@aseamericas.com or leave it in the comments. Until next time…

Be Profitable!

Say the words “We’re changing Pay Plans” in a dealership and everyone starts to run for the hills! This is typically because pay plans in our industry are usually designed with little thought, flexibility, or consideration for what you are actually trying to achieve. The pay plan is written around “So how much do you make now?” or “what does the average person make in that job?” instead of what really matters, Incentivizing, Motivating, and Rewarding employees to achieve GOALS!

Spend even a little time defining your goals, and then creating a pay plan in line with those goals, and your employees will reward you with improved employee retention, performance, and a winning culture! My workshop will provide you with the skills and tools to create Pay Plans that Drive Profitability!  

For example, here are 3 tips for designing a successful pay plan:

1. Position not Person – When designing the pay plan make sure you do it for the position not the person. In other words, just because Bob looks good on paper don’t give him a “Special” Technician pay plan to do the same job as your other Technicians of the same skill. 
2. Define Success – If we don’t know what success looks like, monetary compensation, performance achievement, and any other areas we expect, how can we know if the person achieved success or if the pay plan had any impact on their performance at all? And how do they know what they are trying to achieve? Define success and then monitor results!
3. Win = Win – A successful pay plan will result in a win for both parties involved. So, the Dealership gets a win and the employee gets a win. If the employee earns more money than ever, yet the Dealership is far less profitable, you can bet dollars to doughnuts that the pay plan will be out with the trash in no time!

Remember these 3 tips when reviewing, adapting and creating pay plans for your Dealership! And Make sure to attend my DSES Seminar where I will share with you the skills, tips, and practical examples, for “Creating Pay Plans that Drive Profitability!”

Be Profitable!

Department Managers have an enormous impact on your Dealerships Profitability. That impact can either be positive, or negative. The choice is really up to you. We would never let the coach on the field without a playbook and a strategy, yet as an industry we let our managers “play” every day without the skills and support to manager their teams. Ask yourself “do I have a plan in place to ensure my managers have a positive outcome on the bottom line?”

Managers have so much influence over the daily operations of the business you would think we spend tons of time and money developing leaders who understand how the business operates, how we make money, deliver great customer experiences, get and keep great staff, plan the business, all of the essentials in running a successful department and dealership. 

Unfortunately, we find there is no strategy or plan for these essential team members. Managers are just good people, doing the best they can with the tools provided. The average department manager has been promoted through the ranks (which can be a very positive thing) but actually never received training in how to be a manager and be successful in the job. Sure, we show them how to work the computer (a little), how to handle customer situations, and how to juggle, and say “get on with it”. But do we actually have a plan in place to improve their skill set, knowledge, and understanding of how to drive the business and contribute to the bottom line?

Here’s how to start turning the tide for your team and increase your managers skills and knowledge:

1. Make it a topic of conversation – At your next Managers meeting ask the Managers where they believe they might benefit from additional training. Then act to fill the gaps.
2. Create a training plan – Making Manager training a monthly habit drives the whole team forward and gives you a “Topic of the Month” to focus on with your team.
3. Follow up – At each Managers meeting have each Manager say 1 thing they learned that month and how they applied it to the business to drive the bottom line!

Take the 3 actions above and your team will have the competitive edge to drive profitability and increase your bottom line! 

Questions or want to talk more? Message or email me andyc@aseamericas.com

Be Profitable!

Andy Church

Andy shares his Magic Formula for determining profitability in this ProfitByAction.com Quick Tip. 

Take a look at the most current version of your local business directory, and count the number of NEW mechanical repair shops which have opened up in your community recently.

I’ll bet you can count more than three; some being sole proprietors, while others are national chains.
Ask yourself: “Why?"
 

"What is going on in my market that justifies an additional repair shop?" It could be your area has seen increased growth, so a larger vehicle population demands an increase in service providers. But ask yourself:
 

1. If my shop is not completely stuffed to the gills every day, how could I allow a competitor to open his doors and steal work from me?
2. How did I drop the ball so he could eat my lunch?

The answer can be broken down into four basic categories:

1. Wishful self-limitation: You are a franchised dealer. You specialize in your franchise’s brand. You market solely to your brand audience, hope they will do business with you, and reach no further. After all, your only competition is other dealer franchises selling your brand…not the aftermarket; You additionally dislike the complication which comes with setting up and using different vendors, pricing, accounting, and pay plans required to be both competitive and profitable – it’s too much work for such a limited market share opportunity.

2. You didn’t see it coming: While development in your area has increased, you are hoping for “converts” to purchase new or used vehicles from your brand at your place of business, and crossing your fingers that service customers find you.

3. Fear of misdiagnosis: Your techs are brand specialists. They might misdiagnose another manufacturer’s product simply because they don’t know it well.

4. Poor return – on – investment perception: “I won’t do general repairs on other brands that much, so why should I invest in the tools and technology required to capture that market share?
 

But the world is different now.

• If it has lug nuts and some sort of propulsion system (be it diesel, gas, hybrid, or all-electric) you’d better be able to fix it if you want to keep your business and make it grow

• Few clients are concurrently product-loyal; ask any client about the other vehicles in their driveway…there’s a high probability they don’t carry the same name badge as the one they brought to you for service today. The other vehicles will still need maintenance and repair. Why can’t your shop do this? Or at least facilitate and manage the repair for the customer as sublet?
 

• Your techs all learned the same mechanical principles during their trade school training. They simply need the infrastructure (read: information and occasional tool resources) to effect a proper repair. There is no excuse…a good tech can fix anything.
 

• Clients open their wallets where they are well-treated. In this economy, clients will spend a thousand dollars today to avoid a three – to – five year car payment;
 

• You don’t just want your client’s branded vehicle in your shop. You want ALL of their vehicles…and their family’s…and their neighbors.
 

• The shop that sells tires (meaning, gets the wheels up in the air, off the vehicle, and performs a free safety inspection) wins. All of it-Everything, Sales, gross profit, client loyalty and retention. The whole bag. Don’t want to sell tires? Your client will go somewhere else to get them…along with their brakes, shocks, exhaust work, and oil changes. Let one thing go, and you are letting it all go.
 

• It’s time for “empire building” to end between your service and parts departments regarding aftermarket repairs and “who gets what” as far as profit margins are concerned. Adopt weighted-cost average pricing models for aftermarket work, structure your pricing to be competitive in the marketplace, and go after your “unfair share” of the pie.
 

• You must be profitable, but consider your investment in “all makes service” to be just that – an investment in building your store as a brand in the community while capturing and keeping clients away from your competitors.

It’s now 3pm on a Wednesday night, and your service bays are empty…what are you doing to fill them for tomorrow, next week and next month?

Missed Shots in your Service Department

How many times have you heard: “How many (fill in the blank) did we sell this month?

We’re always pushing our service advisors to sell every possible opportunity they can find, be it from a walk around, factory maintenance, or what the technician finds.

We need to examine one specific word: “find”.  In this context, “find” is a verb, indicating some form of action. In our industry, action is an essential element of everyday life, and at ASE, we translate that into the simple word “do”.

For this discussion, and to start your thinking process in the right direction, ask yourself this one question: In terms of finding immediate service sales opportunities, who, in your dealership, is responsible for performing the action we call “find”?

• Service Advisors find work every day through walk arounds and visual inspections at vehicle drop off.
• Technicians find work through diagnosis and in-depth vehicle examinations.
• Service Managers find opportunities in terms of new revenue generation ideas, efficiency improvements, and expense controls.

Problem is…human nature only compels us to look for things that are of interest to us which might prove beneficial to our work skills or paycheck…and sometimes, work needed on a customer’s vehicle is simply overlooked because it is not advantageous to the Technician to do it, or for the Advisor to sell it, or for the Manager to ensure said work is being “found”.

Sure, you may have a “21-point inspection sheet”…if a vehicle comes in needing work (a necessary job which is excessively complicated and/or time consumptive), what’s the likelihood that item will make its way onto the inspection sheet, and then be sold? Moreover, what auditing tools do you have in place to ensure this process happens with every customer every time?

I’ll provide a simple example…your battery vendor probably has a tester which they will provide you basically free of charge which provides a complete battery test in thirty seconds, provides a printed battery health report as a customer sales tool, and also keeps track of total battery tests performed per week/month, and by whom. Obtain this device, and require 100% battery testing in your shop. Match your monthly car count against battery test count and determine how many opportunities were missed.

You will be astounded how many “shots” you are missing!

People like to do what comes easily to them…unfortunately, not all opportunities in vehicle repair offer this luxury. All professionals are compelled to “do the right thing” which may not be the easiest, or most interesting act of our day. However, we discipline ourselves to ensure our area responsibility is covered, and we demonstrate an awareness to ensure repeat business and profit. This awareness must become a “culture” within your shop to ensure 100 per cent of the “shots”…good and bad…easy and complicated, are taken.