Digital marketing in the dealership often is viewed and conducted solely from a sales perspective. But the service department, often called the "backbone of the dealership", is just as important as far as preparing and executing a digital marketing strategy. Check out this video and infographic to learn more about digital marketing's impact and importance for any dealership's service department.

I received this excellent summary of Rob Leary's DSES breakout session, and had to share it with y'all!  Thoughts?

Leary began by explaining that automotive retail is in a mini-recession, with new car sales declining over the last five to six months. New car sales are projected to drop by as much as 13 per cent by 2019. Leary explained this declining projection in new car sales is because approximately one third of all new vehicle sales are leases, which are coming due between now and 2019. A flood of high-quality CPOs are coming into the market place and will cause used car prices to drop. He also mentioned sales margins continue to shrink on the front-end of the dealership. Although this info is bleak, Leary said, it opens many opportunities for growth in fixed ops:

According to the Car Care Council, 84 percent of vehicles will fail an inspection. That means more than eight out of every 10 vehicles that enter service drives will fail an inspection. This allows for more opportunities for upsells, but the status quo must be challenged with improved processes and behavior.

Dealerships show up in less than three percent of search results in Google when “service and repair” is searched. There are huge fixed ops SEO opportunities for dealerships. Leary encouraged dealership executives to make the investment and put quality fixed ops content on their websites and push more customers to book appointments online. Another huge opportunity according to Leary is text messaging customers. Only two percent of customers are receiving an email or texted regarding an estimate, status of repair and bill. Eighty-seven percent of all calls to a smart phone go to voicemail. Leary encouraged attendees to start texting because 98 percent of texts are read within three minutes of receipt and usually only take five seconds to read on average.

Leary closed his presentation by sharing a list of top 10 fixed ops best practices to drive more profits and increase efficiencies:

1. Appointments – 1st, 2nd, 3rd – all online.
2. Greet Customers with digital greeter board and greet every customer by name.
3.  Write-up your customers via mobile and follow a forced march process.
4.  Automate your dispatch process.
5. Electronic multi-point embedded with labor and parts pricing that keeps people accountable and drives results.
6. Electronic estimates for your customers that include pictures and/or video of actual repairs.
7. TEXT your customers – they prefer it.
8. Review and approve estimates electronically, review final invoice electronically, and pay online.
9. Follow-up on any declined services.
10. Next appointment – every customer leaves with their next appointment like the dentist’s office.

Anything you'd add to this list?

If there's anyone else who summaries from DSES presentations, we'd love to have you share them!

Where have all the good techs gone?

It’s a question that many, if not most, dealerships are all too familiar with right now. Ask any fixed ops director, and they’ll sigh as they tell you that yes, it’s true – there’s a shortage of (good!) service technicians. It’s unfortunate and frustrating, especially as it coincides with the fact that cars are now more complex and sophisticated than ever. Aside from that, the new car market is slated to see another drop in the coming year, so service departments are becoming an even more critical revenue source for dealerships.

So, why is it that a good tech is so hard to find these days, and what can you do find more and better trained, motivated service technicians?

Nationwide Shortage

Many of the more experienced techs in the industry today are members of the Baby Boomer generation – and they’re retiring at unprecedented rates, leaving dealerships struggling to replenish and keep up. But experienced technicians aren’t the only ones in short supply; even entry-level candidates are scarce. This is due in part to the fact that there is an actual shortage of training schools across the U.S., but it begins even earlier than that: high school vocational programs are few and far between. When financial crisis hit the country at full force in 2008, these programs were among the first victims of budget cuts. Even as the economy improves, their return has been almost non-existent.  

Seek and Find

Despite all these factors contributing to a perfect storm of technician shortages, there are still strong candidates out there – you just have to find them. And therein lies the glitch.

If you’re like most of your counterparts, you’re probably utilizing typical resources such as Craigslist and Indeed as you attempt to fill these positions. Unfortunately, says Tim Dalton at Autodealer Monthly, while you may occasionally get lucky with these, they’re more likely to lead you to applicants “who are disgruntled, have developed bad habits, and are just looking for higher pay.

To expand your pool of quality applicants, try these 3 tips for finding good service technicians:


Buddy Up.  Building and fostering relationships with local and regional tech schools is a great way to find solid job candidates. If you can partner up with their career office, for example, you can offer apprenticeships and credit-earning internships. The huge bonus here is that applicants who have taken the time and effort to go to school and perform well there will often prove to be more motivated than someone you might find on Craigslist.

Penske, a 22-rooftop dealer group in Arizona, has been wildly successful with this strategy:

"Penske prefers to go right to Universal Technical Institute’s (UTI) Phoenix campus and invite a select group of students to come and work part-time to get their foot in the door for about $10 an hour. While they’re still doing coursework, students get a chance to see automotive work from the real-world perspective of a money-making shop while the auto group has a chance to observe which of the students they want to hire full-time."

It’s a win-win situation.


Be Social.  It may seem obvious, but too many dealerships are not utilizing the invaluable recruiting tool that is social media. According to a study conducted by the Society of Human Resource Management (SHRM), 71% of job recruiters who use social media for recruiting purposes find it to be an effective tool “to decrease time to fill non-management, salaried positions.” And while you might and should include professional networks such as LinkedIn, even simply using Facebook, Twitter, or Instagram can be tremendously successful. You can reach potential applicants directly, but you can also reach their friends and family – you know, the people who know they’re looking for a job as an auto tech.


Offer Opportunity.  Motivated, dedicated job applicants will be drawn to the opportunity to further their training and certifications while on the job. And a dealership that is willing to pay to have their techs educated and certified makes a clear statement that it’s invested in the growth of its employees. If you work for an OE dealership, your OEM more than likely has a training program set up or in the works. OE-certifications have multiple benefits: they come with bragging rights for the certified technician, and they offer more retention value than other certifications, because an OEM-certified tech is more likely to remain with the brand for which they are certified. But even if you’re an independent shop, it’s worth considering footing the bill for your techs to get ASE or similar certifications. If you do decide to offer these types of continuing education opportunities, be sure to shout it from the rooftops in your job listings – and then watch the quality of your applicant pool soar.

Bad News, Good News

It’s the goal of every business to make money - and how can we do that? By increasing gross sales. And how do we do that?“

There is more than one way to skin a cat, as they say in Georgia,” says W. Scott Wheeler, founder and president of Automotive Consultants Group, Inc. Similarly, there are many ways to increase gross sales – increasing car count is one of the most common. That said, in many instances, increasing car count works. But it’s not the only KPI worth focusing on. If you only look at car count, it could cause problems for your shop down the road, whether by overworking technicians or maxing out facility, says Wheeler. He adds that increasing car count is often viewed as a “Band-Aid for all issues” and that it’s important to ensure it’s the best way to increase your gross sales before you implement it."

“Before you go to raise car count, is that the real problem?” Wheeler asks. Again, increasing car count can be effective, but in order for it to happen you have to look at other KPIs and make sure they’re working.

There’s a misconception that increasing car count will automatically increase gross sales, Wheeler says. Some other KPIs you should assess before making the decision to increase car count include: average repair order, gross profit margins, net operating profit, productivity, and efficiency. Track these on a daily basis; it’s important to know how your shop is doing every day, says Wheeler. Wheeler himself gives clients his version of a KPI tracker in Microsoft Excel.

The first step is to identify the right car count benchmark you should be hitting consistently. Ask yourself:

• What is your current car count?
• What are your current gross sales?
• What NOP are you trying to achieve?
• What are your GPMs?

If your current numbers aren’t matching up, it might be time to evaluate what you need to work on before you resort to increasing car count. Every shop has a “sweet spot,” explains Wheeler, but they’re all different, and exact numbers for each will vary.

Wheeler suggests also considering these five factors before increasing car count:

• Physical space. How much increased car count can your shop handle? Eventually you’ll reach your maximum capacity.
   
• Technicians relative to car count. You need enough technicians to handle however many cars you have, or you’ll run into obvious problems. If your shop is smaller, says Wheeler, you need to know what your technicians are capable of (i.e., efficiency and productivity). If you end up with too many cars, warranties might go up as technicians may be more prone to error under pressure or if they feel too rushed. Watch your warranty numbers; if they go up, you’re pushing your facility’s limits and your technician’s capabilities, warns Wheeler.
   
• Technician-to-service-writer ratio. Increasing car count will increase the number of phone calls coming in, so you’ll have a high demand for your service writers and technicians. According to Wheeler, a good ratio is 3 technicians to 1 service writer.
   
• Marketing efforts. With more cars, you’ll need more business. To get more business, you may need to increase your marketing efforts. Wheeler recommends offering promotions, such as a free oil change upon referring three customers. You need to know your ROI on marketing, Wheeler says, if you’re going to do additional marketing. If you double your car count, you should in theory send out double the mailers.
   
• Productivity. It should be at 100 percent or higher, says Wheeler. If it’s not, adding more to your car count won’t fix anything. If your shop is operating at full productivity, though, increasing car count will help. The higher the productivity, the more car count you can handle - but find out how soon until your techs are maxed out. If need be, hire an additional technician. 

Aside from increasing car count, what are some other ways you have successfully increased gross in fixed ops?