When you first come to work every morning, do you spend time planning your day, or do you dive right in and start working? Depending upon your role in the dealership, it may not matter that much. However, service advisors really don't have a choice. Your service department opens early and it's busy as soon as it opens. Ending your day with the beginning of the next day in mind is key to starting the day off right. 
 

If you're a service advisor, jotting down a to-do list for the next day isn't really sufficient. There's so much that can be done to prepare for early appointments. Being prepared means you can deliver a stellar customer experience first thing in the morning, even if you haven't had a chance to finish your first cup of coffee. 
 

Best practice is having service writers perform a day-end checklist. Advisors that completed these tasks before they went home arrived at work every morning ready to dive in and perform at the highest level! 
  

1) Review open Repair Orders (ROs) 
 

After you've said goodbye to all the customers who picked up their vehicles, review your open ROs. Have you contacted all these customers to update them on the status of their vehicles? 
 

At the end of each day, being proactive about letting your customers know the status of their vehicles will eliminate many incoming phone calls from them the next day. This means fewer interruptions while you're with clients, and fewer phone calls to return in a game of phone tag. It also makes your customers happy because they don't have to call you to find out what's happening. 
 

One of the best ways to let customers know about their vehicle status is texting. If your service department has a texting function integrated with its DMS, encourage advisors to use it. In general people are much more responsive to texts than to phone calls. Think about it: if you're at your son's baseball game or in a meeting at work, are you going to pick up the phone? Not likely. But you can easily read and respond to a text. 
 

2) Review morning appointments 
 

Print out service histories for all of your next morning service appointments. Look at what the client is coming in for and review that vehicle's history to see if there are any recommended repairs that need to be addressed, recalls in effect for their vehicle, or other opportunities. Print out your RO estimates and attach the service histories, highlighting or otherwise noting the items you've found.  
 

Reviewing appointments ahead of time also gives you a sense of how many big jobs vs. small jobs you'll have. This allows you to form a game plan in terms of who will be working on what, and in which bays. Having a game plan in advance saves valuable time in the morning, which your clients really appreciate.  
 

3) Update closed and work-in-progress ROs 
 

Review all closed and work-in-progress ROs, and update notes in the CRM and/or DMS. During the rush of the day, notes are often scribbled by hand onto ROs but never transferred into the DMS. Also notes from conversations that you've had with clients should be recorded that day before you forget the details. 
 

All items such as declined services and attempts to reach a client should be recorded. If you've made a repair recommendation, record the price quoted. If the customer is a possible candidate for a trade-in, make a note and alert the appropriate sales contact. 
 

4) Have loaner cars ready 
 

Last but not least, review how many of the next day's service appointments are in need of a loaner car. Make sure you have enough to meet the demand, and go out to physically inspect them. The cars should be vacuumed, washed, gassed up and ready to go. This is one of those no-brainer items that often gets overlooked, but makes a huge difference in the customer experience. When your customer is eager to get to work in the morning, making them wait for a loaner car is unacceptable. 
 

Taking care of these details at the end of your day will ensure that you're prepared for tomorrow. Trying to tackle these tasks at the beginning of the day, when cars are pulling into the service lane and customers are waiting, increases the likelihood of mistakes, missed opportunities and unhappy customers. 
 

What tips do you have for ending the day with the beginning of the next day in mind? 

What is profit? Quite simply, it's the difference between what you spend and what you make. Most dealers, when they think about profit, immediately think about how they can make more. They strategize how to increase revenue, increase gross margins, increase sales or increase customer pay ROs.  

However, spending less is an important part of creating profit. Dealers know this too. When times are tough, they've had to go through their operating expenses, line by line, and find areas to cut.  

But what about when times aren't tough? The last few years have been good for dealerships. As a result, many dealers have become a little lackadaisical when it comes to expenses. When times are good, they don't believe they have to cut. And they're right: they're still making plenty of profit.  

But as we all know the economy is cyclical. There are good times and bad times. If you don't prepare for the bad times during the good times, the effect can be tumultuous. During bad times sales plummet, employees are laid off and expenses have to be slashed to the point where it can compromise your ability to recover or even survive. 

It doesn't have to be this way.  

What if, during the good times, dealers focused on increasing sales while simultaneously reducing expenses? Not slashing expenses; but managing them in a way that insulates their dealerships from the economic boom-bust cycle. 

Analytics can help. Discovering and fixing inefficiencies today will protect you when sales begin to slow. Instead of having to react to a slowdown with drastic measures, you will be prepared to proactively implement a plan that mitigates the negative effects on your business. 

Here are a couple examples of how this works: 

Let's say your dealership sells $2 million in new car inventory every month, and you like to keep about $10 million in inventory on the ground. To keep that $10 million in inventory consistent, you order an average $2 million in new inventory every month. This gives you a six-month supply of inventory. Most dealers would feel pretty comfortable with that. 

But there's a significant cost associated with holding a six-month supply of inventory. That cost is pretty easy to determine. What if you could cut that cost in half by holding a 90-day supply and ordering just $1 million in new car inventory every month? 

Your initial reaction is probably negative. You're thinking no way, cut my inventory in half? The manufacturer won't be happy. Besides, the more cars we order, the more we sell. And there's a part of you that takes pride in having all that inventory on your lot. It makes your dealership look big and important. 

But we're talking hard dollars here. With analytics, you get plenty of insight as to what's selling and what's not. You can easily spot when a particular model begins to fall out of favor, just by a slight downward trend in sales volume over a three-month period. At that point, don't order any more of that model until you have sold what's on the lot. You'll also be able to see which models are trending upwards, so you can order more of those.  

Don't let your manufacturer tell you what to buy. Let your data tell what to buy. Every market is different and changes in purchasing behavior don't happen overnight. Analyzing data allows you to catch trends in the early stages, enabling better inventory management and saving thousands of dollars per month. 

Another example of where you can achieve significant savings is in employee salaries. But I'm not talking about laying employees off. I'm talking about increasing the productivity of each employee so you don't have to hire as many new ones. 

The way to do this is by analyzing your gross profit per employee. Let's say you have two stores. Store A is doing $1 million in gross profit per month and has 100 employees. That means they're averaging $10,000 in gross profit per employee, per month.  

Store B also does $1 million in gross profit per month, but they have 120 employees. So they're averaging $8,300 in gross profit per employee, per month. What gives? Store A's employees are 17 percent more productive than Store B's employees. 

This is where you can start drilling down into your data. Breaking out gross profit by department in both stores will give you the first clue on where to zero in your search. Is the problem in sales, fixed ops, accounting or all of the above? 

Clearly there are employees in Store B who are performing unnecessary tasks or duplication of tasks. Is there some process or technology that Store A is using that Store B isn't? Is it a manager who isn't holding their team accountable? The answers to these questions are in your data. If you can find the answers and fix the problem you should soon see a 17 percent increase in gross profit in Store B. 

These are just two examples out of dozens that illustrate the way data can be used to increase profit through increased efficiencies. Today's reporting tools make it easy to drill down and identify where inefficiencies lie. Using this data to create new disciplines will help insulate your dealership from the next sales downturn.

For service managers, I have found that Thursday is a good day to do a trial close as you get ready for the end of the week. By Thursday you know pretty well where you stand and if you discover problems, you still have two days to get them cleaned up. 

A trial close starts with closing every Repair Order (RO) that can possibly be closed. Since many dealerships still pay techs and service writers weekly off of closed ROs, this process will ensure your employees are getting paid in a timely manner, which makes them happy.  

Additionally, I recommend reviewing a few Key Performance Indicators (KPIs) that can tell you if there are problems lurking in your processes. Potentially, these problems could rear their ugly heads at any time to take a big bite out of your weekly profits. Tracking these on a weekly basis will help you close out this week on a positive note, while setting up next week for maximum profitability.  

1) Open Repair Orders (ROs) Over 3 Days 

How many ROs are currently open that have been open more than three business days?  Ideally, no more than 10 percent of your total RO count have been open this long. A number higher than 10 percent indicates a problem somewhere. To find out what--or rather, who--is causing the problem, drill down. 

First, focus on the low-hanging fruit that delivers max profitability: customer-pay and internal ROs. Typically there are three reasons why these ROs stay open. 

The first reason is because the customer hasn't picked up their vehicle. Sometimes the service writer can't get hold of the customer, or they have tried and the customer has not returned their call. This can happen if the customer has gone out of town or if the loaner car they're driving happens to be nicer than their own car. They're not in too much of a hurry to pick up their vehicle. If this is the case, it's time for the service manager to get on the phone and become a little more persistent. You may want to tell the customer you'll have to start charging a daily fee for that loaner car.  

The second reason why an RO may stay open is if a service writer has placed it on the back burner to prioritize jobs that are easier or more profitable. Since the squeaky wheel gets the oil, this should be taken care of pretty quickly with a terse note from the service manager. 

Finally, the open ROs may be tied to a hoarding technician. Perhaps someone is flagging good jobs and won't let anyone else do the work. Meanwhile they're getting assigned to other jobs and the RO is sitting there. This problem is easily solved by the service manager, simply by assigning the jobs to other technicians. But you can't solve the problem if you don't know it's there. 

2) No Show Percentage 

How many service appointments were made but the customers did not show? Your no show percentage should be 15 percent or less. 

This KPI is important to track because if you're not following up on no shows, that's a lot of techs standing around doing nothing. If your no show percentage is higher than 15 percent, drill down. 

First, separate the warranty no shows from the customer pay no shows. There's no rush to follow up on the warranty work. But if it's customer pay, pick up the phone. Call the customer directly to see what happened and try to re-schedule. 

If your no show percentage is consistently higher than 15 percent, you may want to think about implementing an appointment confirmation process in your service department. It works in your sales department, why not service? 

3) Special Order Parts on Shelf 

Many times a customer needs a special order part to have a repair done, but their car is fine to drive in the meantime. The part comes in, someone leaves a voice mail for the customer telling them that their part is in...and nothing happens.  

There should be zero special orders parts over a week old. Daily calls and/or emails may be necessary to get the customer's appointment scheduled. 

Reviewing these KPIs will help keep your service department cash flow healthy and your shop scheduled to maximum capacity. What service KPIs do you like to review on a weekly basis? What other tips do you have to ensure that your week ends on a positive note? 

Is data your best friend or your worst enemy?

Why do I ask? Well, if you work in a dealership, chances are good that you either review or are responsible for creating reports on a regular basis. For principals and managers, reports reveal important information such as how many units your dealership has sold this month, how many customer-pay ROs you've completed, or whether you're on track to hit quarterly revenue goals.

But knowing these numbers doesn't necessarily lead to improved operations or more revenue. Are you leveraging your business intelligence to increase ROI for your dealership?

In auto dealerships, business intelligence is defined as the analysis of data gathered from reporting applications, and the subsequent application of that knowledge to improve best practices and make better decisions.

Here are three ways that accurate business intelligence can deliver immediate ROI to your dealership:

1) Process Improvement

Business intelligence has proved time and time again, with many different dealerships, that when processes are followed you make money. Not only that, but the more adherence there is to established processes, the more money you will make.

If your Key Performance Indicators (KPIs) are set up correctly and your data shows that certain departments or individuals are not operating within those KPIs, then you know your processes are not being followed. It's as simple as that.

The nice thing about using KPIs as a process-checker is that you'll know beforehand if revenue goals are in trouble. So instead of having to go to your sales director and ask why your sales team had such a terrible month last month, you'll be able to approach them proactively. Halfway through the month you can say "these salespeople are not making enough phone calls," which gives the team time to correct their actions and play catch up so you don't get a nasty surprise at the end of the month.

2) Transparency

I’m sure that just about all of you have had a department manager and a GM look at the same numbers and come up with different projections, it’s a pretty common occurrence in dealerships. That's because often there isn't consistency or accountability in the reporting process.

One of the main benefits of business intelligence is that it can be harnessed into a format so everyone is looking at the same data in the same way. For example, if a service advisor provides a weekly report in an Excel spreadsheet, and one week sees an unusually high number of open ROs, he may be tempted to fudge that number. But when reports are generated in a consistent template using the data in your DMS, it becomes difficult to fudge the numbers. This creates transparency; everyone is looking at the same data, which can then be used to improve accountability and to apply discipline where necessary. Additionally, increased transparency often leads to increased motivation by employees, because it becomes impossible to hide poor performance.

When it comes to data, transparency is either your best friend or your worst enemy. If it's your worst enemy, chances are you like to procrastinate or don't like to follow processes. However for a dealer, transparency is in fact always your best friend because it gives you a more accurate picture of where you are, how you got there and how you can get to where you want to be next month, quarter or year.

3) Increased Productivity

The most accurate business intelligence is gathered from reports pulled from your DMS or from an enterprise reporting system that's integrated with your DMS. A side benefit of using this these types of reports for business intelligence is that they can be run quickly, which significantly increases staff productivity.

Do you really want each of your Internet Managers spending four hours a week creating reports in an Excel spreadsheet? Or would you rather have them spend that four hours following up with leads? Same with your service advisors; wouldn't their time better be spent training techs or following up on declined repairs?

Taking the extra time to dig into KPIs and glean business intelligence from them will deliver increased ROI in the form of process improvements, transparency and more productivity.

What story are your reports telling you? Focusing on rear view numbers tells you where you've been. Business intelligence can help you navigate to where you want to go.