Automotive Avenues
A Must Read for Owners, Controllers and CFOs!
As we all know, the manufacturers have been after dealers for years to remodel. Whether it is a complete rebuild, a remodel, or even just a facelift, dealers are spending millions to “Keep up with the Joneses”. These remodels are a major event for most dealers, spending thousands on temporary buildings and offsite storage lots, not to mention the loss of traffic and gross in Service and Sales. For the employees and customers, it is also a nightmare. If you’ve ever worked in a temporary trailer in a cold winter in Colorado, you know what I mean.
What most dealers don’t know is there is a major tax credit when it comes to remodels. Yes, I know what you’re thinking, “My accountant handles that”. Not quite and the answer is simple; it is not their area of expertise. Although some building owners and CPAs have substantial experience with Cost Segregation, most do not. There is a dearth of true educators in this field, which unfortunately leads to much misinformation. These factors have caused countless thousands of building owners to miss out on this powerful tax savings strategy. This is why in my 21 years as a Fixed Ops Manager, I wondered why dealers spent so much money on advertising, management systems, call centers, social media and the list goes on and on, but they never step back and look how much money may be available to them to offset some of these expenses.
Another question I get asked a lot is “You can only get these benefits on a new building, or new construction, right?” First, I will say an unequivocal “Yes”, it is beneficial to have a Cost Segregation study done when you purchase/construct/renovate a new building. In fact, anyone constructing or renovating a commercial property should have a study completed. However, the true power of Cost Segregation is displayed on buildings that are not new! Here is an example of what you may be missing…
- Mr. Client acquires a commercial property for $3,500,000 five years ago and never completed a Cost Segregation Study.
- Despite rumors to the contrary, Mr. Client recognizes he may now have an opportunity to benefit from a study (maybe he read this blog post).
- Mr. Client hires an expert who identifies 20% ($700,000) of components that should have been allocated to a 5-year life instead of 39 years. Mr. Client jumps for joy when he realizes the IRS will allow him to “catch up” $700,000 of missed accelerated depreciation on his next tax return!
The bottom line is, if you own commercial property, and have not had a Cost Segregation study completed, it’s not too late! Hundreds of thousands, even millions, of dollars in tax savings may be available to you. Be the hero of your bottom line, and take advantage of these savings now.
Senior Advisor
Spending 21 years as a Fixed Operations Manager, I successfully saved dealers money on a daily basis. I now focus my time on ways to reduce costs. I specialize in cost savings for Auto Dealerships, which are often exorbitantly high due to the large lot size. If you own an Auto Dealership and have not completed an Engineering-based Cost Segregation study or Property Tax Review,, I would love to work with you. All evaluations are done at no cost! If I can't find you savings, there is no fee!
Automotive Avenues
Tired of factory required training? Never!
Yesterday I attended some factory required training, warranty training to be exact. Yes, I know what you're thinking, warranty again, how many times can they beat this stuff into our heads! After 20 years of being a Fixed Ops Manager, I have definitely had my fill of warranty rules, regulations, and especially the dreaded audit! Each manufacturer does it differently, but in the end, they are all basically the same. But not this time, this class was actually teaching us how to make more money, and get every flag hour we deserved!
At first, I thought maybe I went into the wrong conference room, but no... there on the table was my tent shaped name card, handy workbook and the famous cheap pen. Can't they afford a pen that will last through the class? So there I was, saying to myself, "try and take one good thing back with you, and the meeting will be a success" Never heard that before, right? Not only did I take numerous great ideas back with me, I was actually energized when I left the meeting! My point to this whole thing is, never turn down, or keep your employees from attending any training that is provided by the dealer or factory, ever! As a Service Director, we all get tired of being short handed due to the constant demands of continuous required technician, advisor or support training.
We need to remember back when it was us moving up in the ranks, and let our employees enjoy the benefits of "free knowledge" just like we did. The best part of the day was seeing my newest addition to our warranty team suck up the information and diligently write it all down. Man, I can't remember the last time I did that! How do you feel about the factory's high demands on training standards? Are they over the top, just right, or too little?
No Comments
Automotive Avenues
Second Chance Money
How many of us out there are losing out on a second chance to sell the job? You would be surprised what a Thank You letter with a coupon can do for your business 10 to 20 days after the customer has visited your store. I have been using these declined services letters for quite some time now. Currently we are averaging over $250 per RO with the system we have in place. I have used many vendors to send the letters. I also have tried it internally, but not with much success.
Recently we have expanded the process using an email and a letter. I would imagine it will all be email in no time. My first question to all of you is, what works best for you? Are you using key words, labor ops or do you just have someone sorting through your ROs and pulling the clients out manually? Also, what are your road blocks? My personal one is getting my advisors to input the correct key words on a regular basis. Yes, we all know that is how they get paid, but you know what I’m talking about.
Another key point is, how are you tracking them and what is their percentages of return, or should I say success? Mine vary from 3% all the way up to a 23% success rate. Yes, 166 ROs written and 38 of them returned to get the work completed at a later date! By the way, he is averaging over $450 per declined service! One last thing, when is the best time to send the Thank You letter with the coupon? Maybe the timing wasn’t good for the customer when you told them they needed brakes, but pay day is right around the corner, bam! A letter or email with a coupon shows up around the 15th or 30th. Whatever the process, this is one thing every service department should be doing! I would love to hear your comments, challenges and successes. Like I tell my used car manager when he declines repairs on reconditioning, “it’s always better for me when I get my second chance at your money!”
2 Comments
DrivingSales
@Marc are your thank you letters coming directly from your service advisors? It sounds you are having great success, I would imagine after your advisors see some of the success they are more likely to add those declined operation codes!!!
Automotive Avenues
@Denim. The letters/emails are sent out by a vendor, they monitor our system for the key words nightly. Yes, you would think most advisors would jump on the bandwagon, but I still have my challenges with a few. Makes for a good review conversation though:)
Automotive Avenues
CSI... Can't Stand It!
Is this how you feel when you see the three letters CSI? If you answered yes, you are not alone. After twenty years of dealing with CSI, there has always been one common denominator, “fix it right the first time.” We are all aware of the hoops we jump through, changing the way we would normally conduct business, including crazy ideas we think customers will love. We wash their cars, stay open late, create new positions, all in the name of customer service. Does anyone out there have a “Customer Service Specialist” or a “Concierge Service Greeter” or should we just call it a CSG, or some other crazy acronym?
Not to say how many times we have had to adjust to the factory changing the way they score us! One week it is the infamous do or die, all or nothing question, the next week they are grading us on a “weighted score” Who makes this stuff up, and what person decides which question is heavily weighted versus the next? My guess is it is the guy who put the cabin air filter behind the dash, only accessed by the thinnest armed contortionist tech in the shop! Oh yeah, and it pays a whopping one tenth!
Either way we look at it, it is still the main focus of every manufacture out there, and we need to accept it. Being Service Directors, we have all learned how to adjust to every situation, we are trained professionals, right? I know my success in maintaining CSI has always been just taking care of the customer’s real request, fix their car and it will fix them. We need to make sure that from the time they walk in the door, the # 1 focus is to get the job done right, the first time. The car will be washed, the candy is on the dash, and the survey has been explained, repeatedly!
All these things mentioned above are great ideas and processes, but if the problem they had when they came in still exists, guess what, you will get a bad CSI score! What processes do you have in place to tie your technicians and shop foreman’s into the importance of the survey? Is it part of their pay plan, or do you just hope they understand? I know if we have an Advisor not following up or doing a good job, we handle it immediately, but what do we do about the bad repair? Do we penalize the tech, or just have them try again and not charge us? I personally involve CSI into all pay plans, I would love to hear what works for you, because no matter how we feel about the dreaded “Survey” it is not going away anytime soon.
12 Comments
DrivingSales.com
@Marc this is a great article! Thanks for sharing it. CSI is an important piece of the process that can't be ignored and you're right, it isn't going away. How exactly do you "involve CSI into all your staff's pay plans"?
DrivingSales
Marc an area where I see most dealers fall short on CSI is holding the techs accountable for FIRTFT. Everyone else has CSI in their comp plan but the techs outside of a conversation are not directly affected. I agree... focus on the single most important item and the other things will fall into place.. nice post.
Retired - Fixed Operations Director
Marc - I would be interested in how you have been able to tie CSI to technicians pay? They seem to always have a "reason/excuse" as to why it was not their fault
Automotive Avenues
Lacy and Jim, Thanks for the comments. Right now I am able to track their individual CSI, not sure what you can do with your surveys. They lose $1.00 per flat rate hour if their score is under the region on the "Fixed Correctly" question. If they are 110% or above of the question, I give them $1.00 extra. My shop foreman gets a $500.00 bonus if the overall score is above at the end of the month.
Toyota
Hello Marc, great article! Our CSI scores are the lowest this month that I've ever seen them since I've started for the auto group. We have phenomenal comments, but the scores are atrocious and Toyota is very much a pass/fail setup, there's no inbetween. We've talked to the Sales Professionals about coaching their customers and a couple of them do okay with that. However, I have seen numerous occasions where my BDC rep will call the customer, coach them through it and we hear statements such as "Happy as a clam" and "I'll make sure you guys glow!" and then the scores come in and it's a 75% give or take 10%. We're using every technique and backstop we can, but none of it seems to be making a difference. Same thing on the service side. It's crazy. Any tips?
Automotive Avenues
Tony, Wow, sounds like you have some good processes in place. Who is your BDC? Is it a professional group, or maybe just an employee? I had some issues a couple of months ago, after some investigation I found out my BDC had some turnover and the script was not being followed. We also have had some success with the advisors asking for the survey before they write the customer up. Kind of a self report card, I have one advisor that is very good at this.
Mason City Motor company
As long as you can actively coach your customer's, some brands like VW don't allow it, blow up a survey and have it on the drive by the advisor's desk, with all checked 10 a line that is drawn that says Pass over the 10 and 9 below a fail in red. After the advisor get's done checking them in, have them escort the customer to the survey with the information I want to tell you know that you may receive a survey, it is my personal report card and we review these daily, the manufacturer has a steep curve and anything less than a 10 then I have failed and myself and manager will have to call you, so if anything happens during this visit please stop and tell me or my manager so we can make it right as we do want to make sure you are happy with our service today. When they pickup, you say I know I went over this but I just wanted to make sure was there anything that will prevent you from giving us 10's, I know it is a lot to ask but they are that important to us. Also, put up a brag board close by with the written comments from the survey's cut out and put on the board and update it, they will see you take it seriously and will see high scores or responses to resolve it. If you can't put up the survey, then make sure you have the brag board and talk to the customer in front of the board with the same script. If this is consistent it will work for service, for sales have it at there desk and go through it with the closing. If you do get feedback write it down, thank them for the information, if it is something that can be handled right away do it. If it can't tell them you are going to take it to the customer service board and will review it. Then follow up the customer if you are able or not and why not, they may improve your process better than you have ever thought.
Toyota
@Marc: I created the BDC from the ground up. Having zero experience with it before (I have managerial and call center experience, but had no BDC experience) we've taken our bumps on the chin. We're trying to figure out what works and what doesn't. I currently have a Sales BDC rep and a Service BDC rep. They each followup on their respective CSI invitations daily or every other day depending on our focus for the day. I perform the rest of my many responsibilities while sharing an office with these two reps so I get to hear most of their phone calls. We can't blatantly coach the way Steve Tuschen is recommending (I would love it if we could Steve!), but I've created word tracks to help them coach the customer indirectly. For instance, the best answer to some of the questions is "Truly Exceptional". So I make sure that they focus on letting the customer know our goal is for them to have a "truly exceptional" experience. If for some reason your experience wasn't "truly exceptional", please let us know so we can remedy the issue and you can comfortably agree with it being truly exceptional. We also inform them that the survey only effects the Sales Professional/Service Advisor even though multiple areas are discussed (spiff wise, this is true). We let them know that Toyota is very much a pass/fail company and they accept nothing but the best. Was there anything about your experience that makes you feel like we weren't the best choice? How can we remedy that? etc. etc. We have a heavy focus on CSI and while the Sales Professionals are not doing their coaching all of the time and the service advisors are not coaching the customer every time, it's the safety net that gets the evil eye, haha. So, we're pushing as hard as we can!
Mason City Motor company
Tony, you can't do the survey on the wall, but you can use the wording as you are educating the customer not coaching, it is a fine line but I used it when I was with Toyota and never had a problem. I also use it for Volkswagen and Nissan. The BDC maybe a tougher point, but the process needs to get set at the first point of contact by the consultants talking to the customers. I don't pay for CSI it is a condition of employment, we talk daily about the survey's, they are emailed to every employee and printed for those without email they are sitting in the employee break room everyday, by having that much focus and they see it everywhere it becomes part of the culture which is very important to get the increase.
Toyota
We have actually considered making it a condition of employment. As it sits right now, anyone in the positive gets a $250 spiff at the end of the month. Anyone who is in the negative gets a $250 deduction at the end of the month. So essentially, a bad score can effect them to the tune of $500 when it comes to their pay. I hate to hang people's jobs over their head, but I guess if that's what it takes to motivate them.
Automotive Avenues
Unfortunately we work in a world where at times are best producing employees cause us the most grief at the end of the month when it comes to CSI. This makes it very hard to use the phrase "condition of employment" If this is the case with Tony's group, which it sounds like it might be, instead of threatening the employee, can we use him or her as an example in some other way? I know that if he is a high producer, the $250.00 hit means nothing to him. Maybe a reduction in their commission, or limiting their appointment quota for the day? I know the other Advisors would be happy to step up given the opportunity to take some of their work load. Just ideas, but there is a reason he or she got to where they are, they had to have good CSI at one time, and I know they can do it again. Replacing them can really be a pain, especially if they go to your competitor!
Mason City Motor company
I removed the pay portion of it when I have gotten to the stores as I don't want the financial pressure weighing on them as well as the CSI or get into the funk well I can't fix this month and just not care for the rest of the month. Instead it gives me an effective coaching method if an advisor is below, I bring them in we talk about the scores, ask why they think it is down and what can be done to bring them up. Explain we are going to continue to review daily and at the end of the month we are going to be tracking the progress and if it isn't corrected by the end of three months that we are going to have part ways and write them up for it. They will do the talks before and after and make there own CSI follow up calls to ensure it gets corrected. I just had an advisor I started that process with and he put on every hard card to return to him so he could followup if he didn't cash them out. In one month he went from the bottom to the 2nd highest CSI for the month for the team. We keep moving up the minimum acceptable performance in our CSI and far out rank the region so we don't ever have to worry. When it becomes the culture of taking care of the customer, they quickly understand the importance, it is so aware in our department that they come to me with the survey's with responses did you see my 100 and what the customer said, they will print out the survey if they have comments with there name asking if we can put it on the brag board.
No Comments