Looking at 2017 and preparing for a very promising year it is becoming increasingly important to ensure your production staff is operating at an all time high. Most likely you fall into a group like the majority of us where we are still looking for additional technicians and this even makes it more important to get the very best out of every single technician in your stall. Here are a few common items that would be helpful to address with your staff to remove any unwanted roadblocks that reduce each individuals performance.

1. Clearly define “efficiency” and “productivity” terms for your techs so they know and understand the terms and how they can impact the result.
   1. Efficiency – how fast you perform each flat rate hour
   2. Productivity – how many flat rate hours turned in a given time period, typically an 8 hour day
2. Define the GOAL – performance is always increased when the goal is specific and clear. When the goal is challenging but well within the employees capabilities, the employee will accept the challenge and typically do their best to achieve.
3. Tools – Take inventory / Does your team have access to the best tools? Ask yourself.
   1. Are the tools well maintained and in good working order?
   2. Are your special service tools easy to get to?
   3. Are all the attachments/fittings there
4. Shop supplies – how many times have you seen your tech at the back parts counter or back room looking for a connector, washer or lubricant to finish a job. Usually they have to really look causing the loss of precious time
   1. Clean and organized
   2. Plenty of quantity on hand
5. Training – Fix it right the first time is not only good for CSI but it also drastically fixes efficiency without having to spend costly time repairing the mistake
   1. What is your process to properly train new technicians coming into your store
   2. Who is the person they can go to with any questions?
6. Proper Dispatching – if you have worked with your techs for any period of time you know their strengths. Now feed it to them. If you have someone that is fast with heavy line or one that is speedy with electrical feed it to him or her.
   1. Identify a process to quickly complete recalls and direct those to your entry level certified technicians so your senior staff  can help the shop produce all the other work at an efficient pace
7. Leverage technology – A slow Internet connection or a wireless connection that is spotty not only creates frustration but it burns delicate time. Most if not all of the factory updates are large files and uploading them to your customers car with a bad connection takes forever.
8. Sales and marketing strategy – What items are you marketing to your customers? Hopefully they are ones that you can do with extreme efficiency and create good gross profit. Identify the most efficient labor operation and develop an internal spiff around that operation.
9. Incentivize – Make it fun for your team and create a progressive incentive that helps everyone on the team increase his or her personnel best. If you can have every one increase by ten percent in a ten man shop will help you produce an additional 200 hours and in most cases this will generate over Twenty Thousand of additional labor sales

These are just a few to start with and if you observe your technicians routine or behavior there will be some other areas I’m certain you will have some constructive feedback to help your shops production. Good luck, make it fun.

Today’s workforce needs immediate feedback, constant counseling and suggestions to maintain motivation and focus on the current goal. The days of being able to line out the top ten goals and strategies to achieve the goal then meeting at the end of the month to review the employee’s performance have become very ineffective. Simply put, you have to be an ACTIVE manager and leader to get the very most out of your employees. Being an effective active manager is one that has a good working relationship with all employees or asks for a task to be completed and then follows up with the employee’s progress on completing the task.

Some managers that naturally gravitate to being involved with the day-to-day actions assume that their activity within their organization is beneficial for the long-term goal and success of the business however; their actions are not building accountability and growing the employee. Most managers’ tendencies are to work in the business instead of ON the business. So this is a very delicate line that is easy to cross and that is fine from time to time but do not immerse yourself into completing daily activities that your employees should be completing themselves. Pretty soon you find out that your employees will let you complete as many of their tasks as you would like without a second thought. Someone like myself from the old school of thought would have been mortified if my manager had to complete a daily activity for me, but in todays workforce the employee will allow you to complete as many activities as you desire for them without another thought.

So how do you be an active leader without getting buried in daily activities?

• Over Communicate with all departments about the overall goal and who on your team is responsible for completing the process that will achieve the prize. Get your team to concentrate on the process or the steps that will produce results vs. simply talking about the result.
• Delegate but investigate – Delegation builds trust within your team and empowers your employees. The most effective managers I have worked for gave me a task to complete but then followed up with me on the results and how I was able to complete the task and the steps I took.
• Constant feedback – Give “real-time” feedback daily. A common report or a performance management platform that gives consistent and accurate feedback and highlights the areas of opportunity.

In closing, think of an active leader as one that involves the staff of the problems facing the business and delegates a role in solving the problem. Conversely, think of a passive leader as a firefighter or one that is constantly going around putting out fires or fixing issues after the fact. Over communicate, give constant feedback daily but hold your team accountable to achieve the desired results.

Typically when I review a store that is producing above average results in most categories such as increased sales, improved customer satisfaction scores and overall profitability, I generally find a common thread. The customer facing positions and the critical performance positions have had zero to very little turn over in the last year. We all have been faced with an employee that is leaving that is beyond our control and now it is more likely for an employee to change employment simply to change things up and try something new.

Generally speaking if your employee is already thinking about leaving it is too late to try and convince them otherwise and to take it a step further, if you look back at their performance over the past thirty to sixty days you should have seen the writing on the wall.

Managers today are faced with a harder challenge of keeping employees engaged and plugged in.

Here are a few, not all, ideas that should be the foundation of building a winning working environment that helps you create long-term employee tenure.

Value and Appreciated - This goes way beyond the occasional “atta boy” or month end review that comes with high marks. Although those are very much needed in addition there needs to be social praise in front of the right crowd. Employees’ today need a daily confirmation of what they are doing matters. Managers that can do this without effort are the ones that in a simple daily conversation have the employee walking away feeling valued by the way they have structured the conversation.

Trusted and Empowered – Many employees, by their very nature, are risk adverse. That’s why they are employees and not entrepreneurs. This is why you need to encourage safe failure and encourage them to make the hard decision needed. In addition to this encourage continuous training and self-improvement. A well-informed and trained employee will feel more comfortable to make the hard call.

Motivated and Challenged – This one starts by saying you need to hire the right person that likes to accept challenges and is motivated by finishing tasks or this type of pressure will be to daunting. Challenging employees starts by understanding the different factors that influence each individual’s workday. Once you have that down, you can be the boss who challenges everyone without stressing out anyone. Constant feedback to the employee is a must, positive or negative. Positive feedback is simple and easy to deliver. Negative feedback has to be in the form of constructive criticism and encourage the steps that will improve the result.

As I mentioned before these are only a few suggestions of areas to directly focus on when building a winning team. Look for future articles with additional strategies.

In sports there is an over used saying “next man up” that is referring to the next person in line to fulfill the position vacated by an injury or poor performance. The really good teams have two or three people capable to fulfill the position “waiting” for their chance and for their name to be called. In most cases, when asked most athletes have a story of when they received “their chance” and what they did to make the most of their opportunity. I could go through and name several professional and collegiate programs that perennially have a lot of success and when the coach is asked about the success they often refer to the fact that they have a very experienced team and when someone gets injured there is a person waiting for their opportunity to step up. I could also name several athletes in team sports that have gone on to have a very good career when they received “their chance” and they went on to make the most of it and became a superstar.

The point of this, we need to be looking at our organization and constantly develop people that are ready to be “the next man up” when a spot becomes available.

Think of when your service advisor has a family emergency or is sick, maybe they take that summer vacation, who fills in for them and how ready is that person to fill their shoes. My guess is there is a significant drop off in talent and that person is simply filling a hole for you to help reduce the stress on the department and the other employees.

This is not an easy answer and it is even harder to execute, taking in consideration that fine line of being over staffed and over expensed to simply have the pleasure of having a person ready to step in and help on the service drive.

So how do good organizations do this? They put a premium on training, cross training and a build a culture within the walls of the dealership that fosters this mentality.

The first step is to look at every position; this includes the manager position all the way to the car wash or porter position. Evaluate who would fill the position tomorrow if you lost someone for an extended period of time and then evaluate what training do they need to be ready to take on the added responsibility. I know we all have a shuttle driver, support person, office clerk that could “fill in” but the point is great companies have people ready to do more than simply fill in; they have cross trained and developed the next person in line to be ready for their chance to step up and take on the new role. As managers we need to be thinking, who is the person to take on my duties when we are away from the office? Who is our replacement?

Identify and develop your people, the more knowledge they have the better off your team will perform. Take the time to cross train and grow your people from within, they will perform better and faster than trying to hire someone from the outside. As you are evaluating your team and you have someone in a position that is not able to step up in the next role, you need to really look at what type of exposure that is to your organization and determine a game plan. The ultimate goal is to have a cross trained person that has been trained in all facets of the organization that is simply looking for their opportunity to “step up.”

Final count for U.S. auto sales for the month of October -5.9% and YTD -0.3%

As some of the industry experts have pointed to a potential softening of new vehicle sales over the next 18 – 24 months, it is more important than ever to focus on the backbone of the dealership. Taking it a step further, narrow your sights on the most critical position within the store, your service sales advisor. What have you done to this moment to help your current service sales advisor succeed?

Lets take a look at how you can help set the stage for success.

Training – In person or online, it all helps re-focus your service advisor.

In person - When I was a service manager we used to meet for a quick 10 minute warm up before we opened the doors. Of course we were not able to dig deep into the intricate nuances of how to write service but I would be able to set the tone for the day. I likened this to a basketball team warming up before a game, layups and free-throws and then a few instructions on the game-plan.

Online training - help your advisor learn and give them an environment where they can simply focus on the training. There were many times when I would send a service advisor off the drive for a couple of hours during the day to complete a couple of online modules, more often than not the reluctant advisor comes back with something new to discuss and talk about.

Streamline your appointment booking process and allow others to maximize the schedule. Do you want a quick 20% increase? Proper shop loading and production will give you an immediate shot in the arm. Tired of Saturdays being the FREE lunch day? Implement an in-house or outside vendor based BDC. This will take away any personal agendas from the service advisors and allow you to effectively load your shop and control the workflow coming in.

Environment – I may be a little nostalgic here but I talk about this often during trainings and with other team members. When I started writing service in the early nineties I joined a team that worked really hard but they played even harder. There were six of us that had each other’s back, we cohesively attacked the day and sub sequentially the evening as well. If one advisor was off the other team member stepped right up and took over. We had fun and most everyone looked forward to coming to work. As I look back and as I have tried to duplicate that type of environment I realized that the focus was always on the goal and the steps that were being made to achieve the goal. Obviously during meetings we would address some of the items that needed improvement but overall the end line is all that mattered and the small little infractions along the way were part of the game. Do not focus on the negative.

Looking for a little more gross? How about looking toward a $33B industry. A few of the latest reports show that the accessory industry is on the climb at a rate of close to fifteen percent over the last 3 years. Close to 9 out of 10 people that purchase a vehicle will add an accessory within the next 90 days. Light Truck and SUV owners will spend over $1500 on average to make their vehicle stand apart.

This all seems good right? Everyone would like to have a little something that makes their vehicle look and feel the way they like it. Recent studies show that close to fifty percent of customers purchasing vehicles will buy an accessory if they were simply asked.

Coming from a store where we built a quarter of a million dollar display and outfitted trucks with $8,000 to $10,000 of lifts, wheels and tires all the way to another store where an all season protection package was a big ticket. In short accessories is a mindset. The stores that sell accessories typically have someone that loves them and works hard to offer what is hot in the industry. Those who succeed at selling accessories have a solid

• Process
• Interdepartmental relationships
• Updated pricing and products
• Bring awareness at time of purchase

Generally a store that has developed a process and works well together will succeed. Add in some point of sale material and a team that generally likes accessories and the sky is the limit.

Most of our OEM’s have come to market with a decent list of add-ons and actually most of them have created a decent profit margin for parts and labor for the simple bolt on and drop in items. Floor mats, cargo trays and roof racks continue to be the most common add on however in some regions tint and paint protection products have taken over this as the most common add on item.

 Here is a very likely scenario for a store that has decided to install tint and shield.  This not a high volume sales store and they very much fall in the mid-size dealer segment. They promoted one of their lot techs to install tint and shield. Trained him for 30 days and then set out to sell 100 tints and 25 shields. They had the approval from the GM to spiff the salesman and service writers for selling these products and in their first month they sold 66 tints and 22 shields. Figuring they sell tint for $150 and have a cost of materials and labor of $55 they make $95 gross per tint. On shield they sell it for $450 and have a cost of $210 for labor and materials they make $240 in GP. In this particular month they created an additional $11500 in gross, not bad right. They soon found out they needed to hire and train another installer.

Keep in mind these results did not happen by chance. They had the dealership on board and spent nearly $1700 in spiffs but they gained $11500. When I asked how this worked out so well the reply from the service director was, “my GM was pushing the process and made sure everyone knew how much he liked the tint and shield business”. Well for a net of close to 10K I bet he liked it even more.

There are opportunities everywhere within our dealerships to do more and sell more, who’s going to go get a piece of thirty three billion dollar industry?

It's October and in most parts across the country this means it's tire season. A couple of things come to mind when I hear this. Number one, shouldn’t EVERY month be tire month at out dealership? Number two, what are you going to do this month to capitalize on this opportunity that again our competitors have done such a great job in creating urgency for us?

Tires should be sold every month at our dealerships and we all know the various reasons why this type of business is so critical to customer retention and service growth. Here are a couple of best practices that should be commonplace within your store.

• If you can smell them, you can sell them – Tires should be everywhere within your service drive with proper signage of price, fitment and benefits of the tire.
  • Signage with clear pricing should include an out the door pricing, customers hate surprises and the add on.
  • Fitment – Car, SUV and Trucks should be separated so a customer can narrow in on options for their vehicle easily
  • Benefits – make it simple. Its easy to regurgitate the tire manufacture benefits but does this resonate with your customer? What sounds better and makes more sense to most: “Strategic siping in all of the tread blocks increases the biting edges” or “This tire works great in bad weather”
• Inspect tires 100% of the time – What I have observed throughout the dealership world is that the inspection is completed more often than not, but from that point there is typically a dramatic drop off with the following. Remember more than 70% of people buy tires from who first offers them and have their car serviced WHERE they purchase tires
  • Conversation with customers about the tires on their vehicle. This needs to start when the tire is still in the green condition and not only when it is red.
  • Pricing for the tires needed – successful shops give options and do it rather easy. In most cases it is wise to price the tire that is currently on the vehicle and then also give two to three alternative options. Most aftermarket shops make sure they quote the lease expensive option.
• Utilize other offers to maximize benefit
  • Nitrogen, lifetime alignment, free rotations, free balance are all common offers from the aftermarket shops and now are no longer value added services. If not all, MOST of these services should be added to every tire discussion with the customer
• Payment options
  • Tires are a major investment and when not properly prepared can come at a complete surprise. For most coming up with that type of cash is difficult and is a burden to the monthly budget. Make sure you have options to help with this.
• Tires near me
  • I performed this search recently from my house and the top ten returned searches for locations were the aftermarket shops that have owned this portion of real-estate. Number eleven was a Ford store less than 2 miles from my house where their quick lane was mentioned. Just to make it clear I will never call past the 3rd option, most of your customers are the same.
  • Website – can customers come to your website and find the tire that matches their needs? Can they put in the year make and model and then be shown several options? ALL of our competitors have robust websites that make this possible. If you don’t have this option I suggest the first thing you do is reach out to a vendor that can help you with this. It is critical.
    • Tire information page – this is a great idea to have customers land here that have links with national brands to see the most current rebate offers. In addition you can tell your story and explain the benefits of purchasing tires from you.
  • Follow-up – Do you remember the customer that needed tires last month? Do you remember the one that was “advised” they needed tires two months ago? My guess is NO!!! Develop a follow up process, it might be op code driven or it might be a manual folder system, whatever it is FOLLOW UP!!!

These are just a few ideas from the top of my head and I would love to hear other ingenious ideas that you have implemented and had success with. I promise if you do a couple of these items one hundred percent of the time you will sell more tires and retain more customers.

According to the Harvard Business school increasing retention by 5% can increase profits by 25% to 90%. So the question is…Why is customer retention not the most important key performance indicator of today’s automotive industry? Specifically speaking of how it impacts the service department and future growth of Fixed Operations. With everyone competing for market share and increasing the units in operation what is fixed operations doing to hold on to those customers and never let go.

• Visualize a funnel and think we have this large intake or place where we continue to fill the pipeline with “market share” and our goal is to reduce and restrict the other end of customers falling out of the funnel. What tools are we using today that will help us achieve the lower end funnel restriction?

History would indicate and we know that the customer cycle declines rapidly from day one ownership and is almost nonexistent after three years; so the time is now to act and take the mindset that customer retention builds future dealership profitability. Think of the proverbial boulder at the bottom of the hill that we need to get behind with the entire team. Most of you just envisioned your immediate team as service advisors and customer care representatives but I am talking bigger than this and talking about this being a store initiative, the left hand knowing what the right hand is doing and working together. The first step it to get behind the rock, get involved and look at what tools are in place and how effective the results have been.

Customer retention is simply reducing the number of customer defections and increasing the number of customers you attract by your marketing efforts.  Are your marketing plans customers centric and personalized? Is there a direct call to action that has interest and will catch the customer’s eye? Are you venturing out of the traditional marketing channels and leveraging all the other resources you have at your disposal to get your message out?

Improving your customer retention is more than a great marketing plan with high brand awareness, so here are some other items to consider when evaluating your customer retention strategy.

Customer retention killers

• Not measuring your default rate or retention rate
• Sales to service transition low
• First service retention number is low
• Convenience
• In-ability to easily set an apt
• Poor internal process for handling customers
• No Training
• No game plan
• No Awareness

Customer retention promoters

• High Customer Satisfaction
• Brand loyalty and strength –
• Perceived Value for Money
• Future “connected” cars –
• Customers want Transparency
• Personnel connection and a tenured staff
• Everyone on the team knows the measured score
• Everyone is following the customer retention “game plan”

After a recent internal 20-group idea session where every GM was sharing their best idea that is helping their team and store become successful, I realized the two managers that were currently having the most success talked about how they treat their employees and what they do on a daily basis to motivate and inspire them. One general manager indicated, “the goal is to take your performers and show them how to be leaders; naturally the majority of the team will follow.” This practice will help you build a stronger team and you will find that you will now have more time to develop a work place environment that everyone wants to join. The secret, creating a positive workplace environment attracts top talent.

Here are 6 things that make you win the hiring battle.

We have all experienced the let down of a well qualified, proven performer slipping through your fingers at the last minute to make a decision to stay with their current employer rather than joining forces with you. Sometimes they even decide to go with another company that has their hat in the ring as well. The point is, when you are trying hire the right person there are usually other players in the game and this high stakes game is very competitive. According to a Forbes article in 2014 states

“Staying employed at the same company for over two years on average is going to make you earn less over your lifetime by about fifty percent more.”

As a manager this type of notion is scary as hell knowing the shortage of skilled human capital. So what can we do? How do you not end up with all the “leftovers” to build your team?

First suggestion put a premium on your workplace environment that encourages those to stay but more importantly attract new talent when needed.

Here are 6 tips that will help you create a workplace that attracts the top talent.

• Open communication – Open discussion about company goals and the steps needed to complete the goals. Tip – this includes the good and the bad news.
• Career path – everyone wants to see his or her opportunity for advancement. Show them the path and the steps necessary to climb the ladder.
• Be open with information – The industry buzzword is “transparent” but this really does create employee happiness. Tip – open dialog between employees and management.
• Recognition – everyone likes to be rewarded for their hard work, unfortunately the easy path is to throw some money at it. Although it is a start; sometimes a well thought out public recognition goes a lot further.
• Honor your commitments – As a manager the most important thing you can do is commit to something and then do it. Not falling through on your commitments makes you come across as not dependable or trustworthy.
• Promoting the wrong person – Sometimes the person advancing is not the best performer; it’s the manager’s closest friend. EVERYONE in the workplace sees right through this and it makes their effort seem all for not.

2016 is slated to be a banner year for the automotive industry. Develop a strong team, execute the game plan and prepare to dominate. Good luck.

After finishing a very successful August and looking back on the success so far year to date it is very easy to blissfully roll into September and the remaining quarter of the year. Let’s face it, the fixed operations business has been good. Everyone I talk to are having record months with increases in parts and labor gross and customer retention, this trend is very exciting. In addition, it is showing us that with a good basic process in place and decent staff there to help the increase in traffic you should be in a position to do more sales. And most of us are doing just that but I have one simple question; Are your departmental profits showing the same percentage of increase?

I am immediately drawn back to pre-2008 when our business was growing at an exceptional rate and the lessons I learned post 2008 and everything it took to sustain business thereafter. Now I am not saying to prepare for that type of scenario but I am saying that most economist are predicting some form of downturn and you should be preparing right now so you are in a position to weather the storm.

Process – Is your team following each proven step of the repair process, or have they been able to deliver industry standard type of results when our industry has been anything but standard. My guess would that they are following the path of least resistance and are not taking your customer through every step you have put in place to maximize your opportunity for this increased traffic. Time to get back to the basics, train on the basic process steps and make certain everyone on the team can deliver a similar process and result.

Personnel – Do you have the right people in the right position? Do you have more people doing more siloed type of activities and daily functions? Review your staffing needs at every spot and ask your self can you get the same type of results by asking everyone to do a little more. When our business is strained those with the best staff will be the best positioned and those with the most staff will have the hardest time.

• Number of People - Quick calculation: What is your gross per employee? Take your TOTAL gross and then divide that number by the TOTAL number of employees in your department. Are you above or close to the guide of $12,500? I like to look at this number a couple different ways to identify the area for improvement. First is a combined Fixed number, total parts and labor gross divided by total number of employees and then do the same calculation departmentally. You will find that the parts average is and should be a lot higher average than service. Everyone’s operation is structured slightly different and there are many variables but using this a guide will you help you determine a proper headcount.
• Price per person – The largest expense we all have on our financial statement is our staff and it is the largest controllable expense. Identify every dollar it takes to employ someone (this includes their income and benefits.) Guide for service should be in the thirty percent range and parts should be closer to forty percent. Again this is a guide but it is a proven metric that the most profitable dealers meet and exceed month in and month out.

Profit – One of the best words of advice I received early in my career was “you can’t save yourself into a profit” and “gross hides a lot of sins.” Really what this means, our staff needs to be seasoned sales vets and as managers we need to have our department price positioned to capitalize on those additional sales. Of course and as I mentioned before; a good well followed process will help you with this but make certain your team knows the importance of the dollar and how critical effective labor rate is. Again I see many stores do this differently but make sure you are looking at this ELR correctly. This should include all discounts such coupons and other price manipulations. Next you need to determine what is your true cost per flat rate hour sold. This number should contain your average cost per hour from your technician staff and then it should also contain your total expenses. NCM does a really good job on their composite breaking this down but you can do the calculation as well.

• Technician expense – this is a pretty typical report from most DMS and can give you an average of your cost per hour. Typically, I see this number to be in the $16 to $23 range depending on your work mix in the shop.
• Total expense – take all your departmental expenses and overhead expenses then divide that number by the total number of flat rate hours you produced. For instance, your TOTAL expenses for the month come in at $160,000 and your total flagged hours were 2,500. This would put your number at $160,000/2,500 = $64. This would mean that if you take your average cost per technician ($23) and your average expense per flat rate hour ($64) your break even combined ELR is $23+$64 = $87

To wrap it all up, I have found that it is easier to make changes when the going is good (like fixing your roof on a sunny day) and there is less push back from employees. Review your operation and make sure everyone is following your process for success and you have the right personnel in place and your department is price positioned for success. Good luck and more importantly have fun!!!