Service Drive Magazine August 2015 by CBTNews

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SERVICE DRIVE August 2015

MAGAZINE

CBT AUTOMOTIVE NETWORK PUBLICATION

Volume 1, Issue 4

CROSS-TRAINING KNOCKS DOWN INFO SILOS IN SERVICE, SALES

ROB GEHRING ... see PAGE 6

HOW TO CATCH

MORE INBOUND PHONE CALLS FOR SERVICE

TRYING

BILL WITTENMYER ... see PAGE 12

TABLETS

SHARPENING YOUR SERVICE ADVISORS’ PEOPLE SKILLS

MICHAEL ROPPO ... see PAGE 28

AGGRESSIVE SELLING TO WOMEN IN

SERVICE DRIVE CAN BACKFIRE JODY DEVERE ... see PAGE 30

PARTS DEPT. PROFITS

More dealerships are leveraging iPads and other tablets to get faster and higher performance from their service advisors. ... see PAGE 8

PRSRT STD US POSTAGE PAID Permit No. 1459 Pewaukee, WI

Matrix-pricing and other automatic adjustments to MSRP make a big difference over time. ... see PAGE 10

POINT-OF-SALE

STRATEGY Be very methodical with your approach to merchandising in the service department, and watch sales increase.

CBT Automotive Network 5 Concourse Parkway Suite 2410 Atlanta, GA 30328

... see PAGE 32

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SERVICE DRIVE MAGAZINE

Letter from the editor  IMAGINE HOW MUCH MORE EFFECTIVE YOUR SERVICE STAFF WOULD BE IF your dealership’s salespeople shared their knowledge about the latest new car features and technology. Ditto for the salespeople, if they were briefed about the latest manufacturer’s repair bulletins for the cars they’re selling. The service and sales departments have a lot to teach one another, if they’ll both just LISTEN better. Rob Gehring of Fixed Performance Inc. effectively makes that argument in a story inside that will help you lay the groundwork for effective internal cross-training. You also won’t want to miss the guidance from Ken Rock of Auto/Mate Dealership Systems about automatic price adjustments to parts, and our coverage of the increasing presence of tablet devices in service drives. Plus, this edition offers an array of valuable guidance on how to improve the salesmanship and people skills of your service staff, warns when not to take salesmanship too far with your woman customers, and gives tips on hiring techs. And, check out the article on smarter target-marketing to service customers from Amy Farley of Force Marketing. Happy reading.

SERVICE DRIVE TODAY Email

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678.221.2955 PRESIDENT AND PUBLISHER Jim Fitzpatrick VICE PRESIDENT / COO Bridget Fitzpatrick MANAGING EDITOR Jon McKenna ASSOCIATE EDITOR Russell Brown

CREATIVE DIRECTOR Simone Tieber DESIGNERS Betsy Alvarez, Ruth Gomez

JON MCKENNA

PRODUCTION MANAGER Jason Lowsy

Managing Editor

WEB DESIGN Jeff Pearson

DIRECTOR OF MARKETING & EVENTS Alex Branam

In This Issue

MARKETING ASSOCIATE Roxanne Luhr

6 Service, sales staffs must do better keeping one another informed

16 The myth of the vanishing supply of takers for service tech jobs

By Rob Gehring, Fixed Performance Inc.

By Kevin Bradberry, TK Worldwide Inc.

8 Tablet devices are popping up in more dealership service departments

By Jon McKenna

10 Selling parts at MSRP is absolutely the wrong move By Ken Rock, Auto/Mate Dealership Systems

12 Too many BDCs fail to catch inbound service phone calls By Bill Wittenmyer, ELEAD1ONE

Customer segmentation is the key to marketing fixed-ops By Amy Farley, Force Marketing

4 Service Drive AUGUST 2015

Why dealerships haven’t adjusted to the new breed of service customers By Jeff Cowan, Jeff Cowan’s PRO TALK Inc.

How to push through a change initiative in the dealership service area By Brenda Stang, Shifting Gears Training

24 Jump-starting your ambitions for a sales culture in service staff By John Fairchild, Fairchild Automotive Solutions

26 Judge a successful service manager on traits of his service advisors By Glenn Pasch, PCG Digital Marketing

28 Improving people skills in your service drive should be a top priority

SUBSCRIPTION MANAGER Tom Domagalski

MEDIA SALES REPRESENTATIVE Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551

By Michael Roppo, Automotive Domain Results

30 Aggressive selling tactics can backfire with female service customers

Subscriptions

32 Effective point-ofsale merchandising energizes fixed ops

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By Chuck de Martigny, Jungle Cat Marketing Inc.

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By Jody DeVere, AskPatty.com Inc.

34 Ask The Pros

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Sales And Service Departments

That You Must Create a cross-training culture in which their staffs educate one another about new car features and service bulletins. BY ROB GEHRING

he most successful dealerships I’ve seen always challenge the status quo. I never hear their dealers say, “That’s the way we’ve always done it.” Instead, they are always looking for new approaches to integrate into their dealership cultures. In that regard, I believe it’s time to rethink the way most dealerships have separated their sales and service teams for decades. Such an artificial division unintentionally has spawned staff conflicts and reduced job satisfaction, customer care and quality of life. It’s time that negative culture was abandoned, and the departments managed and more effectively integrated into one team that shares information.

SALESPEOPLE NEED TO GRASP REPAIR BULLETINS

For example, a typical service department almost daily receives important repair bulletins from the manufacturer covering common issues experienced by a particular vehicle. Car models generally encounter many types of parts breakdowns or service needs in the same pattern, and OEMs monitor these trends and report them to dealerships as service directives on web-based links. As a best practice, you would expect the service manager and members of the service and parts teams to

6 Service Drive AUGUST 2015

carefully study these directives, so they’d be prepared to quickly and confidently work with a customer reporting a problem with that make and model. In reality, most service advisors are so time-pressed that they don’t even glance at the directives consistently. Between staff shortages, illnesses and vacations, it’s really hard to carve out time to stay current on service bulletins. However, it is critical to find that time, even recognizing that adequate staffing is the optimum solution to providing exceptional customer care and giving the support department time to stay current on repair trends.

MFG. TRAINING LOST ON SALES

Over in the sales department, important web-based training from the manufacturer is being taken regarding features and benefits of the vehicles the dealership is selling. Salespeople are required to receive this training so that upon delivery of a car to the customer, they can explain essential features about how it operates. With technology improvements in vehicles, the amount of information that the customer must receive at delivery is increasing. Most manufacturers now suggest designating one individual in the sales department to be the technology go-to guy who reviews what will be integrated into each vehicle to meet the owner’s needs and wants. However, as in the service department, time constraints also are a

challenge with the sales team. Most salespeople work on a commission basis, with unit sales their reason for existence and long hours. Setting more appointments and closing techniques are their top priorities. It’s time for more dealerships to remove the barriers between the sales and service departments and implement an innovative program for the departments to inform and educate each other. I understand the time challenges. However, I believe that cross-training is critical to change the existing culture in today’s dealerships.

HOW TO PLAN A JOINT MEETING

Look for a regular time that’s agreeable for both teams, to meet for about 30 minutes every other week on a consistent basis. Publish in advance the particular vehicle that will be discussed in the next meeting. For example if yours is a Chevrolet dealership, you might pick the Impala for the next meeting. At that meeting, your sales team could illustrate the vehicle’s feature benefits and some interesting points on how it operates. They could explain to their service colleagues the Impala’s latest technology improvements addressing such things as fuel economy, OnStar advantages and operational systems. Or, if Chevrolet at the time was offering special financing terms or employee discounts, the sales team could pass that information

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Have Become Information Silos

Knock Down along to the service group. Meanwhile, the new Impala should be on display in the service department and the center of attention for the meeting. The parts department could review and point out available accessories for the Impala, and discuss installed pricing on original equipment items.

ACCESSORY SALES SUFFER

I find it interesting, and regrettable, how much dealerships lose in accessory sales because they make it such a pain for the sales staff to present that information. A sales team member should not have to make two calls to service and parts – taking away precious time they should be spending on selling – in order to price a set of mud flaps for a customer. Plus, you won’t sell accessories that way! A better practice would be to have some accessories installed on your dealership’s new vehicle inventory, and thus showing how they enhance the vehicle’s appearance. Also at the meeting, the service Department could review for salespeople the latest service bulletins on the vehicle chosen for the meeting. They also could present recommended maintenance intervals and the latest options the customers could choose for their Impala.

BENEFITS YOU’LL ENJOY

Dealerships that implement this type of cross-education training program will have their sales team presenting accessory sales with installed pricing presentations, without a loss of their valuable time. They

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will understand service bulletins and be able to suggest maintenance intervals to their sales prospects, thus planting the seeds for improved customer retention. Meanwhile, the service team will help sell additional more cars by informing their customers, friends and family on the latest feature benefit improvements and special financing programs. The parts team will get valuable input as to what accessories should be in inventory and ready for immediate installation. Everyone on the dealership staff will sell more and demonstrate a new excitement about the products sold in the other departments. Presentations by one department to another will have immediate advantages. With everyone on the dealership team better understanding the vehicles currently for sale, your customer satisfaction will move dramatically higher. With the team looking at individual vehicles and their issues in preparation for their upcoming meetings, product knowledge will reach levels never achieved before. And, an appreciation for what the other teams are facing will improve interactions between the departments.

CROSS-EDUCATION IS ESSENTIAL

Establishing a program inside your dealership that will position your staff to learn more from one another is essential. My view is that every dealership should expect their teams be up to date on all information that the customer in front of them needs. Without a cross-education program, do you believe this expectation can be realized? It’s time to set aside traditional walls between dealership departments and develop a culture of “one team,” with its mission to provide the customer with an exceptional experience. Make sharing information and challenges between the departments a standard practice with which everyone is comfortable. Have your sales team spend time at the advisor desk to better understand the challenges faced in the service drive. Have members of your service team follow salespeople around on the lot as well, to find out what their issues are like. If you really want to be bold, send both groups to the parts department, so they can return to their areas with newfound gratitude.

ROB GEHRING President and Founder of Fixed Performance Inc. Rob’s company specializes in training engagements for dealership fixed-ops clients throughout the U.S. and Canada. It aims for dramatic and profitable improvements in a dealership’s fixed operations in both processes and people. He also writes a free weekly newsletter and holds a free weekly conference call on fixed operations topics.

AUGUST 2015 Service Drive 7

Touchpad Tablets Become A Fixture In More Service Operations

It’s not that they let you show repair information that much faster; it’s more that customers expect digital by now. BY JON MCKENNA

bout six months ago, Community Chevrolet Inc. in Meadville, a small northwest Pennsylvania city, bought four iPad tablets for its service department. Today, customers are so hooked on a digital display of their service needs that “they want to see the GM multi-point inspection on the tablet even if they’ve just come in to top off their tire pressure,” said Service Manager Tim Betz, only partly tongue-in-cheek. Touchpad tablets continue to make inroads in dealership service drives. Major dealership groups such as Sonic Automotive Inc., AutoNation Inc. and Penske Automotive Group have helped drive the trend with their major investments in service lane technology. But, as Betz’s single GM store shows, smaller operations also are trying to appeal to a digitally dependent customer base. Community Chevrolet spent about $379 apiece on iPads for three service writers and Betz. The service manager is a self-professed iPad fanatic, which is why that

8 Service Drive AUGUST 2015

particular tablet was chosen. GM did not subsidize the investment.

DEVICES CONVEY PROFESSIONALISM

“Basically, it’s a little more professional than your average [approach of ] walking up to a customer’s vehicle with a clipboard and paper and pen,” Betz said. “It showed our customers, especially the younger generation, that we are tech-savvy. When they see that we’re using the technology, too, they get a connection with us and the feeling that these guys will take care of me and my car. It’s no longer the image of ‘How much can I ding you for?’ which is the way a lot of people coming through the door view us.” Betz’s service writers have always conducted the GM multi-point inspection and a walkaround. Now, however, they carry tablets on which the dealership has loaded the

Tablets can pull up customer records to start generating a repair order.

GM Service Workbench app and free TeamViewer app. Service Workbench is a menu-and-inspection toolkit function. Once the car’s VIN has been typed in, the tablet will show the service writer and customer the GM mileage-based required maintenance. At the same time, it will call up the Community Chevrolet recommended maintenance for that make and model, specs for which the service department has keyed in through Service Workbench. And, if the customer has been following the GM multi-point inspection previously, the screen will show “to some degree” the work done previously on that car to meet either recommended or required maintenance, Betz explained. Team Viewer lets Betz’s team remotely access the dealership’s personal computers and pull customer files needed to start generating a repair order.

LEVERAGING CAMERA, E-MAIL FUNCTIONS

Plus, his service writers frequently use the tablets to take video or photos of the affected part and e-mail the images to the customer’s smartphone or computer, before any work is authorized. “I’ve found that if you show someone

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“We are almost taking something away from the customer if we are not using the technology available.” -TIM BETZ, SERVICE MANAGER AT COMMUNITY CHEVROLET

the physical evidence at work, and they have a couple of hours to think about it, they usually say yes” to the repair, Betz noted. Finally, the tablets have become his service writers’ chief device for communicating with customers by text or e-mail.

ADVISORS MAY BALK AT FIRST

Not that the transition was completely smooth and easy. Initially, service writers complained about transitioning a traditional paper process to digital and said they found it difficult to read the tablet screen in the sunlight. “We

had to change their viewpoint and make it clear we were doing right by the customer,” Betz said. Moreover, the tablets don’t automatically save time. In fact, he estimated the walkarounds and subsequent write-ups now take on average three to four minutes longer, as his people use the tablets to compile video records of any serious vehicle damage or extremely poor operating condition.

PUBLIC GROUPS LED THE WAY

Among bigger dealership groups, Sonic led the way in integrating iPads into its service departments, having first tested them in mid-2011 and put them in all stores a couple of years later. Around the same time that AutoNation was wrapping up its iPad project, AutoNation began a system-wide rollout of tablets that service advisors could use to look up a repair history, prepare an RO and take photos of damaged or work parts or components. Penske also has been phasing in tablets at its dealership service departments. Betz believes tablets are an inevitable tool for service advisors in stores of all sizes and in markets large and rural. “We are almost taking something away from the customer if we are not using the technology available,” he remarked.

SMALL ADJUSTMENTS To Parts Pricing Systems Can Make A Huge DifferenCE In The Department’s Profitability After a year of automatic matrix-pricing and rounding up to .99, could your gross margin have soared by 50%? BY KEN ROCK

oes your parts department consistently sell parts at the manufacturer’s suggested retail price (MSRP)? If the answer is yes, then your department is giving up at least thousands of dollars of potential profit every year. When I deliver training sessions to parts managers, I teach the following three pricing strategies that can instantly start improving their bottom lines. Even though the incremental profit per part is small and probably not even noticed by your customers, over time the increments add up to real money. If you follow these recommendations, your parts department’s gross profit margin could increase by more than 50 percent in one year. I’ve seen it happen repeatedly with my dealership clients.

ACTIVATE MATRIX-PRICING

Just about every DMS has a matrix-pricing feature available, although not every parts department uses it. (For example, in Auto/Mate’s DMS, you would go into the parts module to access the system information file and choose “Calculation Code Setup.”) Matrix-pricing describes a system that takes a part’s initial cost and automatically increases it by a set percentage to arrive at the selling price. The lower the dealership’s cost to acquire that part, the higher the multiplier. For example, for parts that cost the dealership a penny to 10 cents, I recommend a markup of 975 percent. I know that sounds like a lot, but if a part cost you 10 cents, your dealership would sell it at a maximum $1.18 rather than the MSRP of 18 cents. A

Every parts employee should resolve to get a handle on per-unit profits. 10 Service Drive AUGUST 2015

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Price Rounding

From .01 .11 .21 .31 .41 .51 .61 .71 .81 .91 1.01 2.01 4.01 8.01 10.01

Y To Next

Up To -

99 (e.g. 99)

(e.g. X9)

Selling Y (Y/N)

Selling Price Percentage % .10 .20 .30 .40 .50 .60 .70 .80 .90 1.00 2.00 4.00 8.00 10.00 15.00

975.000 950.000 925.000 900.000 875.000 850.000 825.000 800.000 795.000 775.000 650.000 400.000 150.000 125.000 100.000

% of % of % of % of % of % of % of % of % of % of % of % of % of % of % of

C C C C C C C C C C C C C C L

List N (Y/N)

Discount Calc %

Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade Cost/List/Trade

.000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000

Sample price matrix from Auto/Mate DMS calculation code screen shot. $1.18 price tag is hardly outrageous standing on its own, and on an RO it is downright negligible. However, for those reasons, matrix-pricing should only be used with parts sold to the service department for ROs; it should never be used for over-the-counter parts sales. Why? The Internet has made parts-pricing so transparent that any ambitious customer can quickly use a smartphone to look up the MSRP. With ROs, customers rarely question pricing of individual parts and if they do, the mark-up is such a small percentage of the overall RO that they are unlikely to push the issue. As the cost of parts rises, the mark-up percentages should drop (see exhibit below). Typically, I recommend using matrix-pricing only on parts with an MSRP or full list price of $20 or less each. After the $20 mark is reached, you should revert to selling it for MSRP. And, matrix-pricing isn’t the right approach for all parts; it shouldn’t be used, for example, with oil filters, whose pricing is pretty well standardized in the retail marketplace. Since matrix-pricing is a gradual approach to increase profits from smaller parts only, it may take a year to achieve a real impact on your department’s bottom line. However, I’ve worked with many parts managers who have, over time, seen gains in their department’s profitability of 50 percent from matrix-pricing alone.

ROUND UP TO 99 CENTS

With this handy and simple approach to parts-pricing, your system automatically rounds up the price of every part to end with “.99.” So, if you had planned on setting the part’s price at $34.85, the system will round it up to $34.99. A part you had planned at selling for $295.10 will instead be offered at $295.99. Of course, the roundingup doesn’t have to be to 99 cents; it could be to .29, .95 or any level you think your customer would respond to favorably. With the Auto/Mate DMS, all that’s required to implement the 99-cent round-up feature is to change a setting in the “Calc Code.” (At the top of the previous matrix pricing exhibit, you can also see the .99-rounding setting.) Not every DMS has such a feature available, so

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check with your provider to see if you have overlooked a setting or if there is a way to implement the function. I recommend using this pricing model for customerpay parts because any mark-up will still be close to MSRP, but never for wholesale customers because a small increase can make a noticeable difference with their bulk orders. As with matrix pricing, a 99-cent round-up policy can quietly and gradually increase profits, with parts department gross profit margins increasing as much as 25 percent over the course of a year.

NEVER LOSE MONEY ON WHOLESALE

Margin pricing is a system designed to protect dealers from losing money on parts sales to wholesale customers. Certain parts from certain manufacturers

simply don’t have a lot of profit built in for the dealer. Then, if you choose to give a 20 percent or 30 percent discount to get a local repair shop’s business, it’s quite possible (and this happens more often than you think) that you have sold the part for less than what you paid. For example, let’s say your parts department paid $4,000 for a transmission. The manufacturer’s MSRP may be as low as $4,250, or a total mark-up of $250. If you opt to sell that transmission at a 20 percent discount off MSRP, then you have just sold it for $3,400 and lost $600 on the transaction! Margin pricing automatically calculates a desired profit margin on the sale of every part, and also automatically re-sets any discount you may be offering if it would put you in the red for that part. This feature is most useful in sales to wholesale customers, but it can also prove handy if an over-the-counter customer is asking for a discount. All of your customers should understand that your dealership can’t viably sell a part for less than cost. Once again, a margin pricing feature resides in the calculation code area of most DMSes, so ask your provider for help with implementing and/or setting it up.

TAKE CONTROL OF PER-UNIT PROFITS

Auto service is a tough business. It seems like the mindset in many dealerships has become that it’s necessary to sell everything at a discount in order to get business. That’s simply not true. If a customer really wants a car repaired by a certified, qualified technician, you ought to be able to make him or her understand there usually is a higher cost associated with that skilled work. In the parts department, there are times when parts managers have no choice but to discount or sell parts at cost. But, your dealership should never lose money on parts sales! Even a small profit is better than nothing at all. The best part about the pricing strategies I’ve discussed is that they don’t put a big dent in a customer’s wallet, because the amounts are small and usually bundled into ROs. I’ve worked with many of our customers to implement these parts-pricing strategies. In some cases, parts departments that were deep in the red have turned around and become profitable in less than a year. These strategies can work for your dealership, too, by changing a few simple settings in your DMS.

“The best part about the pricing strategies I’ve discussed is that they don’t put a big dent in a customer’s wallet, because the amounts are small and usually bundled into ROs.” KEN ROCK Corporate Training Manager and Customer Support Specialist at Auto/Mate Dealership Systems Ken has trained dealership customers for more than years, after having worked as a fixed-ops director for a dealership group in New York and Massachusetts. He has more than 25 years of dealership experience and hands-on training of dealership staff.

AUGUST 2015 Service Drive 11

Failure To Properly Handle Inbound Service Calls

Hamstrings Service Departments Start with a small BDC team and then take additional steps to catch all customer phone calls. BY BILL WITTENMYER

uring several of my recent speaking engagements, much debate has arisen over how to handle inbound calls for the service or fixedops department. I’m often questioned about the quickest and most effective way to improve inbound call handling, and it’s an easy answer. Dealers must make sure incoming service calls are handled by a BDC, whether it’s a virtual third party or an in-house group. That is the first place to start. Everyone knows the service department is a dealership’s lifeblood for profitability. Most service advisors do a fantastic job up-selling to customers in the lane. In fact, many possess the same characteristics and qualities as a front-line auto salesperson (even though most service advisors, who view their role as consultant/ advisor, would probably disagree). I constantly hear how different their role is from when I used to work in the dealership environment. However, contrary to that opinion, advisors are exactly like salespeople in the dealership. They possess the same traits, they just get leads differently. With the majority of an advisor’s leads obviously coming from the service lane, phone-ups are a close

12 Service Drive AUGUST 2015

second. Some leads are trickling in from Internet requests, as more and more consumers move to online scheduling and alternative ways to communicate with dealerships. However, the same attributes or behaviors that make service advisors and salespeople successful are the same ones that sometimes hold them back – especially when communicating with consumers by phone.

This service advisor may depend on quality phone leads from the BDC.

GAP WITH PHONE SKILLS

Most salespeople, and thus most service advisors, do a great job with face-to-face communication. Most display strong, assertive personalities. They can take “No” for an answer but they also have the ability to stay persistent with strong product knowledge and advice, while still making consumers feel comfortable. However, many people in sales characteristically lag in organization, patience and attention to detail. And, while they communicate well in person, that does not always translate to good phone skills. Plus, most service advisors are successful in their jobs, which means they are with customers during times of high phone traffic

“Most service advisors do a fantastic job upselling to customers in the lane. In fact, many possess the same characteristics and qualities as a front-line auto salesperson.” ServiceDriveToday.com

and unavailable to answer calls. It’s a perfect storm for missed opportunities on inbound service calls. A recent sampling over a 30-day period of 120 dealerships that use the ELEAD Contact Center for service calls found that more than 70 percent of inbound calls result in an appointment, when those calls are answered and handled properly. The most important thing – and this is where some dealers falter – is to have a live person answering calls. On average, dealerships miss or fail to answer more than 100 calls during a month, and that is only taking into account before- and after-hours time periods. How are incoming service calls handled during peak time periods at your store? You know the times I mean – the early morning or evening hours when most people are in the service lane either dropping off or picking up their vehicle. Service advisors will be with them, providing excellent customer service. But, the customers on inbound calls must leave it to chance that they will receive a callback or follow-up. Maybe they will quickly move on to a competitor.

FIVE WAYS TO CATCH MORE INBOUND CALLS

Henry Ford built an empire on specialization. However, his automotive industry has, at times, gotten away from this mindset. Developing a strategic and customer-centric process for handling service calls is a great way of getting back to the basics. Following are some key processes that your store can implement today to increase service appointments and market share. Also, remember that multi-tasking is just the equivalent of doing several things poorly and not creating success in a single area.

4. EVERY DEALER SHOULD HAVE CALL-TRACKING CAPABILITY THAT IS TIED TO HIS OR HER CRM OR DMS, AND IS SPECIFIC TO SERVICE CALLS AND CAMPAIGNS. It’s vital to review

the actual number of incoming calls, those answered by your team, time spent on the call, and the corresponding number of appointments scheduled. Such reporting enables you to monitor effectively, manage staff performance and make any needed adjustments. You will also gain insight into higher-traffic times, other missed opportunities, and metrics that can provide great feedback or coaching points to maximize the team’s performance and execution.

5. PROVIDE THE INBOUND CALL TEAM WITH SPECIFIC WORD TRACKS AND SCRIPTING. That way, consumers receive

a consistent experience across every touch point, and you achieve set goals. Keep it simple, and always give the team a lifeline (access to or a way to

instantly contact) the service director or service advisors in case of inquiries that are in-depth or require more details.

MAKE MISTAKES, THEN RECALIBRATE

With any new endeavor, there are challenges. Some of these challenges will require a change of course. Success is composed of flexibility, measurability and the ability to fine-tune results over time. Again, the most important element for any store is to answer all incoming calls and be attentive. You will solve this with a dedicated inbound call team. The next step is to enhance the customer experience, by incorporating such items as service appointment follow-up and outbound phone strategies that are proven to increase business opportunities. Good selling.

SMALL BDC TEAMS DEDICATED TO THE SERVICE DEPARTMENT TYPICALLY PERFORM WELL.

1. CREATE A DEDICATED INBOUND CALL TEAM FOR THE SERVICE DEPARTMENT, OR OUTSOURCE THIS ACTIVITY TO A SPECIALIZED PROVIDER. When starting out, most

dealerships don’t require a large BDC team to concentrate only on service. A small team is an easy way to test the waters, and don’t forget, that team will immediately enjoy success just by answering all the previously missed calls. A small team consisting of one or two people can cover peak time periods as well as normal business hours. Once you have the chance to monitor phone traffic, there is always the option to expand the team to cover after-hours.

2. MAKE SURE THE INBOUND CALL TEAM HAS ACCESS TO THE SERVICE CRM AND ONLINE APPOINTMENT SCHEDULING TOOLS. If possible, try not to limit customers to spe-

cific appointment times, but rather always ensure the service lane can handle the schedule’s capacity. Do not overbook, as this only facilitates bad customer experiences. Customers want options, not obligations. Most importantly, they require convenience.

3. FOR THOSE OF YOU WITH AN AUTO ATTENDANT ON THE STORE’S PHONE SYSTEM, MAKE SURE TO INCLUDE AN OPTION THAT SPECIFICALLY LETS CONSUMERS SCHEDULE THEIR SERVICE APPOINTMENT. You need a process de-

signed only to streamline appointment calls to the inbound call team, which ensures they do not get bogged down with other inquiries. Alternatively, for those of you with a live operator, coach that person on additional questions to ask when answering calls, in order to help clarify appointment-setting calls vs. other inquiries. Make sure the operator is well versed on how to route calls accordingly.

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“How are incoming service calls handled during peak time periods at your store? You know the times I mean – the early morning or evening hours when most people are in the service lane either dropping off or picking up their vehicle.” BILL WITTENMYER Partner at the ELEAD1ONE division of Data Software Services LLC Bill has over more than 20 years of experience in the automotive space and currently manages multiple divisions within his organization including sales, marketing, OEM relationships and large-client accounts. He speaks at several prominent automotive forums each year. Before joining ELEAD1ONE, he spent several years in dealership operations management.

AUGUST 2015 Service Drive 13

Grasp The Fundamentals Of

Effectively Marketing Your Service Department Service managers can help plan customer segmentation, tailored offers and consistent marketing messages. BY AMY FARLEY

hen your dealership puts together a marketing strategy for its service department, you have to think about every part of the process. Whom are you targeting? What kind of message are you sending them? What will you do after you send your initial marketing message? The answers to these questions are the keys to a successful marketing strategy. The following tactics will help your marketing team and you answer those questions, maximize the effectiveness of your budget for marketing your services, and build your service customer base.

TARGETING, DONE RIGHT

At the start, keep in mind that your dealership likely already has a set of loyal customers with whom you’ve developed a relationship. They return to your service center again and again for routine maintenance or repairs. While it’s important to maintain the relationship with those customers, they aren’t the target customers

14 Service Drive AUGUST 2015

for marketing that will grow your business. Instead, you should be directing your marketing resources at lost, inactive and even conquest (those who have never bought a car or received service at your dealership) customers – and within your area. That’s where customer segmentation comes into play. Many dealers utilize basic radius-targeting in their digital and direct marketing campaigns, delivering their messages to customers who reside within a certain distance of the dealership, extending out in all directions. This is not necessarily the most effective means of targeting, and can even lead to your wasting some of your marketing budget. Instead, your marketing team and you should try to evenly distribute your targeting by customer density rather than customer distance. There are many tools that you can use for customer segmentation, including third-party vendors and tools provided by your OEM. These can help you identify the markets, and more importantly the ZIP codes, in which you should focus your marketing.

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COMPARE CUSTOMER, CONQUEST ZONES

Using those tools, take a look at the data from your DMS that shows where the highest densities of your service customers live. Then, examine where the highest concentrations of your conquest service customers potentially live. How do the zones match up? You can overlay or cross-reference these ZIP codes to see where the best opportunities are. For example, if a high density of conquest customers live in a given area, and that’s not a ZIP code from which you currently attract many service customers, that could mean there’s a good deal of opportunity there. You may want to focus more of your service marketing on customers in those areas. Conversely, if there aren’t a lot of database or conquest customers within a given ZIP code – even if it’s within the radius that you typically target – then spending the bulk of your budget could be a costly mistake. It’s probably better to scale back your marketing to that area or stop targeting that ZIP code entirely.

PEOPLE DON’T TRAVEL FAR FOR SERVICE

Next, consider the terrain around your dealership and service center. Apart from quick road access, are there geographical obstacles nearby such as bridges, rivers and mountains? Some customers might be willing to put up with a difficult trip to the dealership to buy a new vehicle, but they are much less likely to put up with obstacles for lower-price-point purchases like routine maintenance or repairs. Just because a customer lives within a given distance from your dealership doesn’t automatically mean he or she is likely to come in for service, and marketing to that customer could waste your time and money. Utilizing customer segmentation in your targeting can greatly improve your dealership’s ROI across all channels of service marketing, and can result in more service appointments and more walk-ins. Once you segment your lists of customers and potential customers this way, you can implement pay-per-click and display campaigns, Facebook custom audience campaigns, direct mail and even e-mail marketing campaigns based on the sub-group.

keting message (regardless of the channel), what happens next? Many dealers don’t have a marketing plan to continue sending consistent and regular messages, and that’s a mistake. Consistent messaging is especially important with regard to conquest customers, as marketing statistics show that it can take up to seven impressions to convert a customer from their old service provider to a new one. Don’t give up on converting someone to use your service center after just one or two messages. Additionally, consider sending short informational messages or videos, in addition to or instead of some of your more aggressive messages. These can help build customer loyalty and respect, which can contribute to a conversion or sale in the long run. Minimally, you should be delivering marketing messages to the same non-responsive potential customer every three months, up to four times. That means

sending them a message along with offers or coupons regularly for up to a year. These messages can be sent through different channels; for instance, you might begin with direct mail and e-mail messages, then follow up later with an e-mail by itself, followed later by a targeted Facebook ad and e-mail, then finally another mail/e-mail campaign. It simply can take time to sway someone to visit your service center, and if you gain a loyal customer in the end, then it’s worth the extra effort. Service marketing can yield impressive results when a dealership approaches it with careful thought and intent. Taking the time to segment your customer base, provide them with offers that are likeliest to prompt them to come in for service, and staying vigilant with follow-ups when customers don’t respond right away are all part of a service marketing strategy that is successful, savvy and cost-effective.

“You should be directing your marketing resources at lost, inactive and even conquest (those who have never bought a car or received service at your dealership) customers – and within your area. That’s where customer segmentation comes into play.”

DIFFERENT OFFERS FOR DIFFERENT CUSTOMERS

Once you’ve determined which customers you’d like to reach, you should consider the offers you’d like to send them. Distance, as well as a customer’s level of activity with regard to your service center, should determine how aggressive your offers will be. For example, customers living in ZIP codes that are farther from your service center should receive more aggressive offers than those sent to people nearby. The reason? It might take a little more urging to convince someone who lives 10 miles away to come in for service than for someone who lives only 5 miles away. You might offer a free oil change to the first customer and 50 percent off an oil change to the second, or a 20-percent-off discount on services to one and half that price break to the other. Likewise, lost and conquest service customers should get more aggressive offers than you send to customers who are simply inactive. If you’re offering the same discounts or coupons to every customer in a given radius, then you’re not marketing as wisely as you should.

CONSISTENT AND ONGOING MESSAGING

AMY FARLEY Media and Communications Manager at Force Marketing Amy is a skilled writer and editor with a keen interest in digital trends and topics in the automotive industry. She utilizes her knowledge of what is new in retail automotive marketing to help Force – an automotive digital, direct mail and email marketing firm based in Atlanta – with its evolution of the dealer-to-customer shopping experience. Visit the website at Forcemktg.com.

After you reach out to a customer with your first mar-

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AUGUST 2015 Service Drive 15

dont believe the myth

That Good Service Tech Candidates Have Vanished

Land them for your dealership with structured interviews, contingency job offers and fast processing of their paperwork. BY KEVIN BRADBERRY

hen I talk with fixed-ops managers across the country, they share their frustrations that there just don’t seem to be enough people who want to do these jobs anymore. It doesn’t take long to discover the breakdowns in their hiring processes. There’s good talent all around them, but to use a fishing analogy, they just can’t get them in the boat! As a recruiter, I spend much of my time contemplating new and innovative ways to find high-quality job candidates. Recruiting is not an event, it’s a process, one that (like any other) has steps must be followed. All of the seven steps in the recruitment cycle diagram shown here should be followed in that order, and executed properly. Simply adding MORE candidates to your pipeline will not necessarily increase the total number of successful new hires in your service department. Execution and technique are the orders of the day. So, your first question should be, before you spend ANY more money on recruitment advertising: How can I increase the efficiency and effectiveness of my recruiting process? In a previous article, I mentioned a dealer who participated in an OEM tech-recruiting pilot project. When this dealer discovered a large number of people had applied for tech jobs at his dealership group, yet his service department was still suffering through an extreme tech shortage, he stated, “Something must be broken internally.” He was correct. This kind of talk from owners may send service managers running for the hills or pointing fingers at the HR department, but it’s a pretty simple fix once you start looking at the process. Let’s look at efficiency ratios. How many techs need to apply for this position for you to be confident you can fill it with a quality person? While every step in the recruitment cycle must be executed well, as an automotive recruiter I can vouch that you can outsource steps one through four. That being said, steps five through seven are all on you, and those are the steps I want to write about here.

THE RECRUITMENT CYCLE

16 Service Drive AUGUST 2015

1. Initiating the search 2. Determining selection criteria 3. Sourcing talent and advertising 4. Screening 5. Interviewing 6. Making the hiring decision 7. Orientation and onboarding

STEP FIVE: INTERVIEW WITH PROFESSIONALISM AND CREATE A STRUCTURED INTERVIEW GUIDE

You need to have a structured interview guide to follow, every single time you do an interview. That guide can be created by your service manager, approved by your HR manager and used with every interview performed by your managers. A structured interview guide should present key questions that will provide needed insights before you make a contingency job offer. Here is a sample excerpt: Again, this is just an excerpt, and each dealership may prefer a different set of questions. E-mail me at kbradberry@tkworldwide.com for a free template.

STEP SIX: MAKE A CONTINGENCY JOB OFFER SOONER RATHER THAN LATER

One of the biggest mistakes an interviewing manager makes is not making a job offer in a timely manner. Hiring good talent requires closing the deal! If you don’t, some other service department will. The time to make a job offer is when the right candidate is sitting in front of you. But, HR won’t let you offer a job on the spot – right? WRONG! You can, if the one word before “job offer” is contingency.

“Simply adding MORE candidates to your pipeline will not necessarily increase the total number of successful new hires in your service department.” ServiceDriveToday.com

RELEVANT WORK EXPERIENCE Questions to ask: 1.

What level of certification do you have? C Tech, B Tech, A Tech or Master? (Level 1, 2 or 3 for CDJ)

2. Tell me about your last job as a technician. What were your major responsibilities? 3. Describe one accomplishment that best illustrates your success with your current or most recent technician position? 4. Tell me about how you would handle a customer whose car you were working on, if he or she was upset about a factory recall? 5. Does your resume reflect all your certifications, or do you have additional skills our shop would benefit from?

“One of the biggest mistakes an interviewing manager makes is not making a job offer in a timely manner. Hiring good talent requires closing the deal!”

Notes:

Compentency Evaluation

 Low

 Medium

 High

OVERALL CANDIDATE EVALUATION 





Less Than Acceptable

Considering Making A Job Offer

Making A Contingency Job Offer

Candidate Has _____Technician Certification

SAMPLE: Applicant must initial each item and sign below to affirm understanding and agreement: I understand that (Dealership Name) _________________________________will require me to undergo a pre-employment screening process which may include, but is not limited to drug testing, alcohol testing and any other testing that is permitted by State/Federal law. Any offer of employment is contingent upon drug test, background checks, and information obtained by contacting references listed on my job application or resume, and based on the opinions of the interviewing managers at the dealership. ____ (candidate’s initials)

X________________________________

Applicant’s Signature of Acknowledgement & Date

Manager’s Signature of Acknowledgement & Date

KEVIN BRADBERRY President and CEO of TK Worldwide Inc. TK Worldwide is a seasoned and well-established automotive recruiting and training firm with a top reputation among its clients and an A+ rating with the BBB since 2000. Kevin has been a featured speaker at dealer conferences and sought as an industry expert for interviews by some of the most widely recognized automotive publications.

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Definition: Contingency offer of employment - Conditional offer of employment refers to an offer of employment that is dependent on the successful completion of certain conditions. The employment becomes final only on the successful completion of all conditions set forth by the potential employer making the contingent job offer. Use a contingency job offer agreement if you know the pay range for the position, have management’s support to make the hire at a figure within that range, and have a candidate who seems like a perfect fit. The job offer will be valid ONLY if the candidate can pass ALL of your pre-screening standards (allowable by state and federal laws, of course). That can include reference checks. You should start the HR onboarding, the background checks and the screening reviews AFTER you’ve shaken hands and said, “Welcome aboard” to an applicant you really don’t want to lose. Feel free to e-mail me for a template of a full contingent employment offer.

STEP SEVEN: ENSURE THAT PROCESSING THIS CANDIDATE’S BACKGROUND CHECK AND EMPLOYMENT PAPERWORK IS A TOP PRIORITY FOR YOUR HR DEPARTMENT

This last advice seems quite simple and obvious, yet many times it’s overlooked. Make CERTAIN you have good rapport with HR. Pay that department a visit, let them know you’re going to be conducting interviews and it’s really important to have paperwork, drug tests, background checks, etc. executed promptly. Your office administrator may not know the urgency of the situation in service, and HR processes and procedures will many times simply play out slowly. However, that pace can, and many times will, cost your group a quality service employee. When I go fishing, the one thing more frustrating than not catching anything is getting a big one on the line, almost getting it into the boat – and the line snaps. By increasing the efficiency and effectiveness in your recruiting process you can significantly reduce management’s frustrations in finding good technicians. Most of them are just sitting there, right under your boat!

AUGUST 2015 Service Drive 17

Today’s Service Customer Is A New Breed, But Most Dealerships

don't seem to know Service departments have little time to change their ways, especially when it comes to how advisors treat customers. BY JEFF COWAN

merican lives and businesses changed in 2008. The economic downturn forced most of us to take a close look at our personal and business finances and make hard, fast, deep cuts. It was a matter of survival. Most of us were successful. However, as an industry, by and large we have failed to truly recognize the changes our customers had to make, the cuts to their personal finances. The way service customers do business, their expectations, what they look for in a business partner, how they conduct business – all have changed. They have drawn a hard line as to what they will and will not accept from a service department. Most dealerships and their service departments still undertake business tactics that are not suited to this transformed customer. As a result, I see many service customers who feel let down, frustrated, underwhelmed. To make matters worse, the after-market segment of the service industry has identified our weaknesses and is

18 Service Drive AUGUST 2015

moving full-steam ahead to exploit it. It is not too late for dealership service teams to adapt to your customers’ new expectations, but it soon might be. Today’s complacency will result in tomorrow’s lack of financial security. Here are some easy changes I suggest you make in how you deal with service customers.

weather is no excuse. Get advisors off their butts and over to the customer’s vehicle with enthusiasm, a smile, a snap to their step and an eagerness to serve.

ADVISORS MUST BE MORE PROACTIVE:

WHAT WORKS: Walking around every car, every time with a watchful eye and the skill and willingness to point out the good and bad.

WHAT DOESN’T WORK: Advisors who sit behind a desk or counter, waiting for customers to approach them WHAT WORKS: Being proactive

Even if your dealership does not have a service drive, your advisors still must get up and greet the customer. They may even have to meet the customer outside. Bad

WHAT DOESN’T WORK: An advisor standing in one place and not visually inspecting the customer’s car

You cannot sell a car sitting behind a desk and you certainly cannot sell car service sitting behind a desk. Would you take advice from a doctor who did not perform an examination first?

story continues on page 20

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SCHEDULED RETENTION

MORE CUSTOMERS BUYING MORE STAYING LONGER

86%

of drivers who return for regular maintenance are also more likely to purchase their next vehicle from the same dealership.1 LEARN HOW TO CAPTURE THESE OPPORTUNITIES!

Visit easycare.com/servicedrive Or Call Us Today at 855.772.6590

1 PPM Driving Retention, Profits - March 2013, Auto Dealer Today. © 2015 Automobile Protection Corporation – APCO. EasyCare is a registered trademark of APCO. MOTOR TREND® is a registered trademark of TEN: The Enthusiast Network Magazines, LLC.

AVOID DISMAY-INDUCING QUESTIONS

Asking the customer WHAT DOESN’T WORK: questions like, “When do you need your car back?” or “When can I call you?”

WHAT WORKS: Taking control of the situation and telling the customer how things work in your shop Here’s a more proactive way to address your service customer: “Based on the information you have given me, your vehicle will need to be seen by __. His schedule dictates that your vehicle will enter the shop at __. Based on entering the shop at that time, expect a call between __ and __, when I will explain our findings. Based on our findings, I will then be able to give you an approximate time that your vehicle will be ready.” This approach affirms to the customer that you know what you are doing. How can customers tell you how soon they would like their vehicles back and when they want you to call, if they do not know how long inspections, repairs and services will take?

INSPECTIONS AND ANALYSES MATTER

WHAT DOESN’T WORK: Saving a full vehicle inspection for another visit

WHAT WORKS: Having your technician offer a full inspection on every vehicle, every time Even though today’s better-made vehicles need to be in the shop fewer times each year, the importance of a full vehicle inspection has never been more necessary – and more welcomed by a customer. Most service

Customers like a can-do service representative.

customers want and welcome full inspections; they are just leery of poorly presented inspections. Too many dealerships are too lazy to perform full inspections 100 percent of the time and only do them on older cars. When you return a vehicle and say, “It’s ready to go,” a customer will assume you have completely inspected it and will expect no problems until the next scheduled service. If you have not fully inspected every vehicle, you cannot meet that expectation. The No. 1 service you can offer your customer is a complete vehicle inspection every single time he or she visits. WHAT DOESN’T WORK: A service drive operated pretty much the same as 10 years ago WHAT WORKS: The latest tools and technology that save time I am not just talking here about tablets and new software. I am suggesting you invest in the newer testing equipment, such as the sensor pads you can place on the floor. A customer or advisor can drive a vehicle over the pad, and in 90 seconds, the customer will know the tires’ condition and whether an alignment is needed. If you’re really on the ball, have your advisors test the battery and check the codes while the sensor pad is doing its work. I live very close to one of the largest Honda stores in the nation. Less than 10 miles from it is one of the smallest Honda stores in the nation. The smaller store employs the tools I’ve mentioned and outsells the bigger competitor in alignments, tires and batteries by four-toone. Customers love these tools!

ARE YOUR DISPLAYS, SALES SKILLS CURRENT?

WHAT DOESN’T WORK: Aging, lifeless retail displays

WHAT WORKS: Crisp, bright, inviting and informative displays Even the smallest shops with the least amount of space have no excuses anymore. A flat-screen TV hooked up to a small computer can attract the customer’s attention and sell a ton of products.

WHAT DOESN’T WORK: Staff who are shy about selling WHAT WORKS: Implementing a full sales culture throughout your service department Customers are not dumb. They see your service department as a retail business and have certain expectations that must be met if they are to consider you as a solution. They know that advisors and service staff are paid commissions and bonuses, and they have very little problem with that. What they can’t and won’t accept is a staff that is not educated in products sold and can’t address their concerns in a professional way.

CUSTOMERS LIKE CAN-DO PEOPLE

WHAT DOESN’T WORK: Service managers, fixedops directors, general managers and dealers who lament, “I can’t get my people to do these things” WHAT WORKS: A person who is a true leader and CAN get your employees to do these things As my trainers and I continue to travel the U.S. and Canada, we see very few dealerships that have made the adjustments necessary to efficiently address the needs of transformed customers who now drive through service doors. Instead, we do see is a surprising number of aftermarket service retailers that are making these adjustments. The aftermarket retailers are your true competition. They do not have the luxury of padding revenues by selling vehicles. Their livelihood lies in selling service, and this makes them a serious threat. They seem to be figuring out today’s customer at a quicker pace than is the average dealership. Use the coffee business as a comparison. Do you think the producers of drip coffee makers thought Keurig was a threat ten years ago? Today, one in three homes has replaced its drip coffee maker with a Keurig unit, and the number continues to grow. How did that happen? Keurig saw coffee drinkers changing and reacted to that change. By doing so, the company redefined the way people buy and consume coffee. In comparison, service managers have an edge. You don’t have to change the way people buy your services. You just have to change the way you deliver them.

“Most dealerships and their service departments still undertake business tactics that are not suited to this transformed customer. As a result, I see many service customers who feel let down, frustrated, underwhelmed.” JEFF COWAN President of Jeff Cowan’s PRO TALK Inc. In his 28th year of training, Jeff is recognized as the creator of the modern-day walk-around and selling processes for service departments. Currently partnered with NADA, EasyCare, NCM, MPi and other vendors and manufacturers, he is the nation’s authority when it comes to training service advisors and service support staff. Visit his website at AutomotiveServiceTraining.com and sign up for free, weekly training.

20 Service Drive AUGUST 2015

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Daily briefings that are positive in tone will help usher a project in your service department to a successful conclusion.

The Difference Between Wishing For Change

In The Service Department, and executing it Take a blueprint approach to your project, plan for bumps in road with staff, and keep a sharp focus. BY BRENDA STANG

“As long as I was the only one deciding on the change for the service department, writing the process and leading the charge to push it through, it would continue to fail.” 22 Service Drive AUGUST 2015

e live in amazing times. Whatever changes you plan on making in your service department, you will be able to find supporting information 24 hours a day, seven days a week. You can turn to conventions and conferences (national and regional), free webinars and podcasts, online shows and magazines, the “20 group” compacts for best practices. There is no shortage of knowledge. However, there is a serious gap between knowledge and execution at most dealerships. Quite frequently, I would come back from a 20 group meeting fired up about a change objective and with a plan to improve a key metric in our service operations. I’d meet with our service manager, go over the plan and turn it over to be implemented. You know where I’m headed with this; the plan then would stall. To prove a point, I would quarterback a process and

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“I have seen more projects lose steam and get derailed because of issues with people than with all other reasons combined.” have success with it. But, as soon as I stepped away from the process, the change I sought would grind to a halt. I am embarrassed to admit that this happened far more than just a few times. Finally, I tired of being frustrated with the lack of follow-through and got to the bottom of the problem: Me. As long as I was the only one deciding on the change for the service department, writing the process and leading the charge to push it through, it would continue to fail. Only when the service manager and advisors became part of the decision-making, plan-writing and implementation was I was able to turn things around. Getting the key people in the service department to the table from the onset has made all the difference. I took three approaches that helped ensure success: Make the plans like a blueprint, make allowances for delays from the “people factor,” and focus heavily on implementation and measurement. Below, I go into more detail on these three approaches.

PLAN TO SUCCEED

Your success starts with your plan. The key is to make your plan, work your plan and review the results. If you achieved your results, congratulations. If not, tweak your plan, work it and review. Begin with the end in mind. What is the result for which you are aiming? Be strategic about the initiative, taking into account the experience and capabilities of your team. You want to stretch them to grow, but not to the point they break. Have all the players at the table. If you aren’t the person in the service department who actually will work the plan, then get the people who will be responsible to the table. For every step, list actions for the people performing the work. Assign accountabilities and timing for each step. Keep in mind that this is supposed to be a “can do” plan, not a “we want to do” list. Review your plan and identify the resources needed. This covers people, facilities, equipment, supplies and information. Don’t shortchange the plan. Do a run-through in the real world. Analyze results, modify, rinse and repeat! Unleash your creativity. Remember that doing the same thing over and over again and expecting different results is the definition of insanity. Let me give you an example of what I mean by creativity. Our service advisor team was working a plan to increase customer pay orders per RO. They had moved to 2.2 CP hours per RO from 1.9 hours, but they just could not seem to move the needle any further. The service manager and I stood back and followed the process and the department’s flow for a few days. We didn’t say

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Personal disagreements can easily derail a change initiative.

anything, we just observed and recorded our thoughts. What we eventually realized was, over time, demands on the advisors’ time had become higher than we anticipated. The team’s production capacity was maxed out. While our advisor-to-technician and RO-per-advisor ratios were right on target and didn’t seem to support adding staff, the practical reality of the situation was that the team was run off their feet. We trusted our instincts and added another advisor. Within three months, the team was averaging 3.1 CP hours per RO. As it turned out, the advisors had breathing room to stop being just order-takers and become salespeople who were able to devote the proper amount of time to each customer.

ALLOWING FOR PEOPLE FACTORS

I have seen more projects lose steam and get derailed because of issues with people than with all other reasons combined. The important thing to remember here is that the leader of the process is like the coach of a sports team. The leader (probably the service manager in this context) needs to be present, observing and answering questions, and directing the team, and making mid-course adjustments if necessary. That leader should be alert for these three realities: 1. Learning a new process takes time and attention. Allow for that time and attention in the change project’s beginning stages. The pace will pick up as your team develops a rhythm and pattern. 2. If more than one person is involved, you will be dealing with individual perceptions of how and when the steps are done. There will be confusion among the team, so plan on and allow for

it. Communication is key to getting everyone on the same page. I’ve learned the hard way that if anyone has the ability to derail a process, he will. If another department is involved with implementing the change project but wasn’t part of the planning process, you had back everything up and get them on board. That department needs to understand its responsibilities and accountability in the process.

PROPER FOCUS

Ask any dealer or manager how he or she was able to push through a big change, and I bet the first thing you hear is about focusing on the things the team needed to do. It takes a proper amount of attention to the details to make change happen. Allocate time for daily briefings on the process. Fifteen minutes at the end of the day is sufficient. But, it needs to be non-negotiable, daily and brief meeting. Keep the briefing positive in tone for everyone involved. Don’t belabor any points. You are looking for successes and to kick away roadblocks. Track project results on a dealership scorecard or department dashboard. Show it in your management and department meetings. The point is to keep it visible and accountable. Well, there you have it – three strategies to incorporate into your next service department change initiative. Following any one of them will give you limited success, but if you actively use all three (plan to succeed, allow for people factors and focus), I guarantee your change initiative will be successful.

BRENDA STANG Chief Shifter at Shifting Gears Training After 19 years in the dealership world, Brenda shifted a gear and started an organization to train and coach dealership managers. During her time in the Ulmer Auto Group, she worked with GM, Toyota, Nissan, Dodge and Chrysler stores. As managing partner for two of the top GM dealerships in Western Canada for the past 14 years, she worked with her management teams to develop and practice the best habits to be effective and efficient. She is a certified trainer, coach and speaker with the John Maxwell Team. You can reach Brenda at stangbrenda.20@gmail.com.

AUGUST 2015 Service Drive 23

Your Ambitions For A Sales Culture In The Service Drive May Need A Jump Start Many plans founder for lack of attention and follow-up; here’s how to keep them on path to success. BY JOHN FAIRCHILD

process. Plainly put (and often for a host of legitimate reasons), many service departments struggle with accountability and follow-through in this area. Let’s examine some essential activities to sending a jolt of action into your ambitions for a true sales mentality in your dealership service department.

First, a service manager must set specific customer pay goals for his service advisors and techs. Undoubtedly, setting and maintaining goals will generate higher performance and employee satisfaction. The only real question is, “What does success look like?” Your customer pay goals should Include and inspire your staff, and stimulate them to be proactive. When advisors and techs are involved in the goal-setting procedure, they will be more enthusiastic about helping achieve the dealership’s retail sales targets. If advisors and techs don’t know what management is seeking to

’ve spent the last 35 years in automotive service departments, working side-by-side with service managers, techs and service advisors. Over the last 15 years, it has really become a necessity for dealerships to implement a retail service sales process and mentality, to ensure the dealership’s growth and profitability. On paper, I see a lot of great plans to institute a sales culture. Unfortunately, I also have seen a tremendous number of good intentions that never seem to bear fruit when it comes to actually executing a retail sales

24 Service Drive AUGUST 2015

CUSTOMER PAY SALES GOALS

achieve, how can they conceivably identify their specific roles? Precise goals will focus them on the desired end results. Retail sales goals should include the following considerations: • Be integrated into a performance pay plan, so they are constantly top of mind • Have staff involvement, agreement and commitment • Be challenging, but reasonable and attainable • Be simple to understand and relatively few in number • Have a duration (typically month to month, or pay period to pay period) Goals need to be tangible and attainable. They should not make advisors and techs jump through hoops or be bogged down with a host of conditions they cannot control. On the flip side, the non-existence of objectives can actually decide whether a dealership performs to a stellar level, just gets by or ultimately fails. Concrete

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Regular sales process groups help sustain a sales culture in any business environment, including dealership service departments.

goals are a powerful weapon. Without them, I have seen dealerships’ businesses shrivel up and die.

CUSTOMER KPI MEASUREMENT

Let’s examine the customer pay sales, parts and labor key performance indicators (KPIs) that will be used to measure success. It is critical that a tech or advisor can know at a glance how he is scoring vs. his established goal at that time. Visibility of the data is as important as clarity. Service managers should supply their team with up-to-date metrics, in conspicuous places with regular updates. Results should be posted in areas of the dealership that are not customer-sensitive, but are easily accessed by employees. E-mail distribution of KPI performance is another way to keep everyone informed. The visibility of your metrics scoreboard will bolster accountability and spur competitive aspirations among your team. Make sure you include both comments of praise and action items in areas that need attention.

TWO CUSTOMER PAY GOALS FOR ADVISORS

Two primary KPIs can be used to monitor how well an advisor is performing with regard to customer pay performance. 1. Number of customer pay customers waited on 2. CP labor dollars and parts sold per RO - Multiply the CP effective labor rate by the CP hours per RO, then add CP parts per RO (in dollars) to that result Two additional groups of metrics are very important as well.

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Commodities sales per RO: Tires, brakes, filters and flushes and other commodities (in unit numbers) as compared to the number of customer pay repair orders written 2. Multi-point vehicle check-up inspections and postponed services coding results (how many MPIs and condition codes booked vs. customers waited on) To set these targets, you should use dealership historical data as well as industry and group benchmarks established.

CUSTOMER PAY GOALS FOR TECHS

Here are some specific examples that relate to production of flat rate hours, penetration of multi-point vehicle check-up inspections performed, and number of upsold services that were recommended. To set these targets, use dealership historical data as well as industry and group benchmarks established. • Total overall flat rate hours produced per day vs. goal • Tech productivity (hours flagged/hours at work) vs. 10-week average • MPI coding results (how many MPIs and condition codes booked vs. customers waited on) • Commodities sales like tires, brakes, filters and

flushes compared to the number of customer pay ROs Worked on

REGULAR COMMUNICATION, CONTINUED TRAINING

Accountability is not a “set it and forget it” item. Goals that are set and then never discussed for feedback wither away. This can breed a cynical attitude about performance among your staff. There are a couple of great opportunities to communicate accountability as a service manager. I have found the scenarios below to be really effective. Weekly sales process meetings, with techs and advisors meeting as groups. This sounds obvious, but what I am really referring to is a brief sales process meeting, NOT a complain session. At the meeting, the service manager should review the metrics and give specific feedback on areas of great performance. Keep the session light and positive in tone, when possible. Also, review what areas that need the most focus. Settle on just a few discussion items, and get the groups’ buy-in for a positive action plan. Make sure to carry these items forward to discuss at the next group meeting. Daily felt-tip RO reviews. This process should take you 30 minutes, maximum. Grab a couple dozen of yesterday’s ROs and sift through them, making notes on the front pages in felt-tip marker that relate to advisor and tech process improvements. Note when processes have brought about success; this is very important. Review about a dozen ROs per day, and once you have made notations on all of them, have each tech and advisor report to you for an impromptu one-on-one review. During these encounters, emphasize that it’s not all bad. Encourage good behaviors and highlight instances where your people did a great job. However, correct behaviors that are not on-target as soon as possible, and escalate issues of continuing poor performance. Deficiencies you find during these communications are your focal points for additional training.

REINFORCE WITH REWARDS, RECOGNITION

Obviously, you want to use rewards to shape behaviors that yield excellent performance. Rewards and recognition can be monetary bonuses but also benefits like time off or scheduling preferences. It is important to match the reward to the individual employee so that it is meaningful. Thus, consider offering optional rewards (e.g. time off or $200). Keep in mind, recognition also is a very significant factor in rewarding folks. Make sure to post accomplishments for the group to see. For the initial period of rewards or recognition emphasis, make awards frequently. Then, move to a variable plan in which they are given with a little less regularity. Switch your focus often, to keep the program interesting and focused on different goals. And, make sure that rewards are directly related to performance of the metrics you are trying to achieve. Make sure to never stop rewarding.

JOHN FAIRCHILD President and Performance Coach of Fairchild Automotive Solutions John has more than 35 years of experience in fixed-operations management and consulting, and trains fixed-ops staff to improve performance and customer service. He started working in auto repair and parts at age 15 and over time held numerous positions at dealerships, including general manager. Visit the website https://fairchildautomotivesolutions.com.

AUGUST 2015 Service Drive 25

Service Managers Should Be Judged By The Success Of Their Service Advisors And, metrics are overused in evaluating advisors; emphasize critical traits and habits instead. BY GLENN PASCH comes for the dealer/GM to evaluate a service manager’s performance, it can be more beneficial to focus on whether the service advisors below that manager demonstrate certain key habits and behaviors than on the usual general metrics. If the service managers do not hold their teams accountable for the process or habits they use when servicing and retaining customers, their dealerships lose revenue.

OVEREMPHASIS ON METRICS

Training service advisors in four critical customer service habits is very important.

can remember my first consulting arrangement with a dealership. I was asked to come in and help with its service advisor processes. When I arrived, a number of faces poked out from cubicles and looked at me with great interest. Then, they disappeared just as quickly. Later, I met these service advisors during a training session. As we broke off to work individually, one of them came over to me and asked in a hushed tone, “Can I speak with you?” I replied, “Sure,” and off we went. In private, he explained that he had liked my session, but I should not be put off if most of the advisors did not listen. “We do pretty much what we want here as long as we hit our numbers.” He went on to tell a story, with a laugh, about how he persuaded one customer to pay for service work that really wasn’t needed for another four months, “because I needed that money to hit my bonus and get my boss off my back.”

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NEGATIVE PERCEPTION MUST BE ADDRESSED

Now, this was six years ago. Many things have changed in the industry since then. However, I am sure the perception of this kind of service advisor still exists in the minds of many customers when they bring their car to a dealership. Many dealerships that I have visited in the last year or so have worked very hard to change this perception. They strive to quickly set and confirm service appointments, service the customer’s car correctly and follow up in a very professional manner. These dealerships have realized that 50 percent-plus of their total revenue comes from the service department. It is worth emphasizing that when the time

However, I have visited many other dealerships around the world where service advisors continue to be evaluated only on metrics, and are often overlooked when training is brought to the dealership. Why are these individuals short-changed with training? The primary reason, in my opinion, is that dealers are responding to manufacturer incentives that focus on selling new vehicles, and so devote their training dollars to showroom salespeople. Given that reality, if your dealership wants to improve the performance of your service team, there are a few habits that your service managers or internal trainers can emphasize in order to improve advisor performance. Those four critical habits are explained in detail at the top of the next page. (By the way, I’m hoping that in adding this line, you can push the very last line of the story level with the column next to it).

WHICH METRICS ARE RELEVANT?

Recently, I was asked about the metrics that should be used to evaluate an advisor’s performance? I am not trying to skirt the question, but before a dealer and service manager decide on performance metrics, it is important to identify the goals. Short-term or long-term success? Revenue only, or revenue plus customer retention? If your end game is strictly to increase revenue per service ticket, then create a bonus plan that incentivizes up-sells of services. If you are looking to increase a certain number of services sold (e.g., more tires sold, more brake jobs performed), then again match the bonus plan to the service volume. CRM compliance or follow-up could be a metric that is inspected. If a dealership is focused on long-term retention of service customers, then there needs to be a

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Four Critical Habits HABIT #1: BEING PREPARED

Top service pros devote a significant amount of time to knowing their services. How does your service department train a new advisor on its services? Is there a written training process that your service manager delivers? Are there ongoing training sessions to make sure the advisors’ skills remain sharp? Just handing the advisors specifications or price sheets and thinking they will become experts is not the answer. Set aside time each month to work with each advisor on a specific area of product knowledge, so they can speak with confidence to your customers.

HABIT #2: LISTENING SKILLS

The late, great Dr. Stephen Covey once said, “Seek first to understand, then be understood.” This is a great lesson that all of us should heed. The best service advisors I know are excellent listeners. They listen carefully to what their customers say. They also seek clarification when necessary. They use prompters such as “Tell me more” and “Go on,” which encourage the customer to speak freely about his or her automobile. This is not a trick designed to get more revenue but rather a way to focus the advisor on solving the customer’s real problem(s). Sometimes, it is a problem they just don’t know how to articulate when they arrive at the dealership.

HABIT #3: CLARITY/TRANSPARENCY

The more that your service advisor can set clear expectations in regard to time or cost, the more likely the customer will return in the future. Make sure that the advisor explains all services to be delivered with the work, and the time anticipated to accomplish each. Also, have the advisor get the best phone number at which to connect with the customer if something changes. Customers will accept their service taking longer than expected if you can give them a heads-up so they can reschedule their days. Not informing them of a delay until they are standing right in front of you, expecting to pick up their car, is never a good experience for either side.

HABIT #4: FOLLOW UP

Many service advisors fail to follow up with their customers after the service work is done. Many dealerships outsource customer follow-up to a third party, or even have another dealership employee in another department handle this task. I believe that if the service advisor calls his own customers, it will help with long-term retention. If advisors are rewarded on retention (more on this below), then I would expect them to follow a disciplined process for reaching out to their customer base to schedule the next service appointment as needed.

1 2 34 Listening skills should be identified during the hiring process and training.

well-thought-out follow-up plan. A few words of caution: You must make sure whatever metric you reward aligns with your business’ bottom line. If you reward up-sells or a dollar amount per ticket, then you run the risk of customers disgruntled at having services pushed on them aggressively. You will need to make sure that your team is trained correctly on how to offer the service without crossing the pushiness line, to answer likely customer questions, and to maintain a calm and professional demeanor if the customer declines the offer. One metric that I think is often overlooked is repeat customers or service retention. What if you rewarded the service department or advisor team on the

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number of repeat customers who came in each month? This would incentivize the team to make sure they are reaching out to their database to try to make sure that all scheduled service is performed at your dealership. This approach also will give your used car department

“What if you rewarded the service department or advisor team on the number of repeat customers who came in each month? This would incentivize the team to make sure they are reaching out to their database to try to make sure that all scheduled service is performed at your dealership.” access to a bigger pool of pre-owned vehicles. By aligning your service training with the proper metrics and incentives, you will not only have a more efficient team of advisors but also a larger pool of happy service customers.

GLENN PASCH CEO of PCG Digital Marketing Glenn is a trainer at heart. He is a highly sought-after speaker, writer, coach and operations strategist, as well as a customer service fanatic. He has spoken throughout the U.S. and Canada, educating audiences on a variety of topics including business leadership, change management, digital marketing and the impact of this new technology on culture, business and society. Visit the website www.pcgdigitalmarketing.com

AUGUST 2015 Service Drive 27

Projecting a positive attitude is a critical skill for service advisors.

Make Developing Your Service Advisors’ People Skills

A TOP PRIORITY Service managers needn’t wait for outside help to drill advisors on positivity, communication and other ‘soft’ skills BY MICHAEL ROPPO

28 Service Drive AUGUST 2015

ave you had a less-than-great encounter with a dealership service advisor? Was that service representative rude? Did he come off as though he could care less about your needs, unwilling to serve, as though you were getting in the way of his routine? My wife and I recently had just such an experience, and it has stayed with me. Having been in this industry for more than 30 years, I realize one of the greatest challenges to dealerships is how best to deliver a value-added level of personal service in an increasingly impersonal society. However, our industry is failing to meet that challenge. The lack of so-called “soft skills” among the service advisors who directly interact with customers offers a huge improvement opportunity for, and competitive advantage to, those service departments that are willing

to really listen to those customers’ expectations. Service advisors are not just the first individuals with whom your dealership’s service customers interact, and the people who will have the most customer contact. They are more than the voice and face of your dealership. They represent the front lines of its customer retention process, which starts with the sale of a vehicle, progresses to service work and eventually moves back to sales again. In this article, I provide a number of “soft” customer service skills and traits I think are essential for an effective service advisor. It is up to service department management to make sure these skills and traits are engrained in their advisors. You don’t need to be an HR director or a professional trainer to take charge of this process.

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PRACTICE IS THE KEY

Taking ownership of a customer’s problems will help boost retention metrics.

Service managers must practice, drill, and perfect their advisors in this regard, and constantly evaluate them. I recommend conducting 15-minute role-play training sessions on a daily basis, with broader overviews on a weekly or monthly basis, on one of the specific categories below. Also, they need to individually address each service advisor’s special shortcomings. My mantra is, “Do it until you never get it wrong!”

1) POSITIVE ATTITUDE

• Are you optimistic and upbeat? • Will you generate good energy and good will? Positivity is contagious. Pass it around! A positive attitude makes all the difference in how your customers remember you. It’s the great differentiator!

2) STRONG WORK ETHIC •

Are you motivated and dedicated to getting the job done, no matter what? • Will you always be conscientious and do your best work? • Are you results-driven? Be resolved that you will treat work as exactly what the word implies. Although you may enjoy your work and even find it fun, it is still work, and you need to approach it with a positive attitude and have outstanding ethics.

3) TAKE THE INITIATIVE

Simply put, to take initiative is to do what needs to be done without waiting to be told, yet also without being overbearing or ineffective. Here are a few habits for which every service advisor should strive: • Be self-motivated • Act without being told • Ask necessary questions • Finish a task, then ask for more • Avoid being idle or wasting time on the job • But, don’t become a workaholic Finally, the best service employees in our industry are dependable. Assess your personal work ethic constantly!

CUSTOMERS NEED A GOOD LISTENER 4) EXCELLENT COMMUNICATION SKILLS • •

• •

Are you both verbally articulate and a good listener? Can you make your case and express your needs in a way that builds bridges to and value for colleagues, vendors and most importantly customers? Excellent communication skills are critical in our work! Excellent communication is a requirement in our industry if you want to be successful, So, be sure to pass it around!

5) TIME MANAGEMENT •

Do you know how to prioritize tasks and work on a number of different customer vehicles and/ or projects at once? • Will you use your time on the job wisely? Time management best practices are life-changers, leading to your making both more time and more money.

6) PROBLEM SOLVING • •

Are you resourceful and able to creatively solve problems that will inevitably arise? Will you take ownership of customers and their problems, or leave them for someone else?

7) ACTING AS A TEAM PLAYER •

• •

Are you cooperative, and do you take a leadership role when appropriate? Teamwork in our industry doesn’t happen on its own. You need to help create and influence the power of teamwork. Don’t be selfish! Pass on the team spirit, and help make it contagious in your dealership.

8) ABILITY TO ACCEPT CONSTRUCTIVE CRITICISM AND LEARN FROM IT • • •

• • • • •

Can you handle constructive criticism, or do you tend to take it as a personal attack? Are you coachable, open to learning and growing as a person and as a professional? Are you willing to master the art of receiving and accepting constructive criticism? Many people in the dealership industry are critics, so don’t take it personally. Do not criticize; offer solutions to problems Do not use others as a stepping stone or take all the credit for a group effort Develop good meeting techniques Carry through with your commitments Focus on the goal or problem. Do not make it personal.

BELIEVE YOU WILL DO THE JOB WELL 9) BUILDING SELF-CONFIDENCE • • •

Do you truly believe you can do the job well? Will you project a sense of calm and inspire confidence in others? Will you have the courage to ask questions that need to be asked, and to freely contribute your

ideas and build more value for yourself and your dealership?

10) WORKING WELL UNDER PRESSURE • •

Can you handle the stress that accompanies deadlines and crises? Will you be able to do your best work and come through in a pinch whenever you are expected to do so?

11) FLEXIBILITY/ADAPTABILITY •

Are you able to adapt to new situations and challenges? • Will you embrace change and be open to new ideas? Flex your mind. Be more adaptable. Learn to be more flexible. Everyone has a choice; you can either adapt or die!

SERVICE OBSESSION IS HERE TO STAY Look, today’s value-added service industry and economy require that dealerships put a new, higher premium on soft, aka people, skills and relationshipbuilding best practices. With customers becoming more and more demanding for higher levels of service, and that service being delivered at an increasingly faster pace, dealers and service managers must seek out and embrace employees who are agile, adaptable and creative at solving problems and serving people well, in a value-added way. Service advisors who get in touch with their soft sides will become more valuable to their dealerships and to their own careers.

MICHAEL ROPPO Director of Fixed Operations and Training /QPS at Automotive Domain Results Michael has more than 30 years experience in training and consulting for Automotive Domain Results and its parent company, The Mironov Group. He helps dealers attain maximum profitability, customer satisfaction and retention by improving the quality of their management teams and the personnel who come in contact with their customers. Visit his website at AutomotiveDomainResults.com.

Do you work well in groups and on teams?

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AUGUST 2015 Service Drive 29

The smartest thing this service advisor can do in dealing with a woman customer is to step out of the salesman role.

Effectively Selling To Women In The Service Drive Starts By

Downplaying The Selling Emphasize the traits that women customers value, including clarity, transparency, simplicity and eco-friendliness. BY JODY DEVERE

omen customers have no shortage of available options when they need auto service. In markets with a repair shop seemingly on every corner, dealerships need to make sure they are doing everything they can to bring those customers to their service drive. Given that research shows women now make the decisions on the majority of automotive purchases, including maintenance and repair, dealers and service managers need to take some innovative steps to earn

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and keep their attention. How can you better position your dealership’s service lane as welcoming and trustworthy for women customers?

FORGET THAT YOU’RE SELLING

It seems counter-intuitive, and it’s a hard lesson for anyone at a retail business like a dealership to learn. But, the most important thing your service advisors can do is to stop selling and focus on building relationships.

At a basic level, every customer is looking for the same thing: Help. Women customers in particular often feel they aren’t heard when they’re dealing with car problems, and this goes for all women regardless of age group. Women service customers are looking for someone who can listen, understand their problem and calmly assure them that there is a solution. If your service advisors can identify and meet that need, then they no longer are service writers or salespeople; they’re problem

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solvers. Focus on providing help and finding solutions rather than on the services themselves, and your service team will go a long way toward resonating with women.

BE TRANSPARENT

Of course, at a certain point your team has to get down to business and talk service. Effectively selling auto service to women is a subtle task, and the key to doing it well is communication. Many women feel they will get the wool pulled over their eyes anytime they talk to a service writer. Clarity and transparency are best. Don’t oversell a particular service, but do be honest with the woman customer about important items that need attention. Your service advisors can go so far as to point out the specific parts in her car that need replacing, if that’s feasible, so she gets a better visual understanding of exactly what needs work and why. A tech-savvy service department can consider taking smart phone video of the part and/or repair and e-mailing it to the customer, so you can go into even more detail.

FIND SIMPLE SOLUTIONS

Never forget that your woman customer is likely acting as a mother, wife, entrepreneur, professional and family CFO. She is always on the go and doesn’t always have time for “some assembly required” projects. For today’s female customer, “Step one, and done” is the ticket. When determining the services that need to be performed on her vehicle, make sure you get as complete a list as possible so you can give her all necessary information in a single conference. List repairs and ancillary services in order of priority, starting with items that must be done now, then those that should be done soon, and finally those that could be done now but are optional. Provider her with a complete picture but be sure to refrain from scare tactics, so she doesn’t feel bullied. Acknowledging her budgetary concerns and working with her on them is also a great way to make her feel comfortable. Once the work is complete, you can happily tell her that she’s on her way. If you feel complications may be likely, discuss those with her up front as well. No dealership wants walking into the waiting room to inspire a feeling of “What now?” dread. While unforeseen car problems do of course come up, it’s important to today’s woman that her time is used wisely. Do your best to inform her effectively on the front end, and then keep her updated by phone throughout the service work, and you’ll earn her trust and respect.

to women across the country about what they want to see in a new car, fuel efficiency and eco-friendliness almost always top the list. Services and products that speak to that need will resonate powerfully among women. Eco-friendly items such as recycled engine oil and synthetics, as well as any part made from recycled plastics, should be very appealing to women when presented in the context of a greener driving experience. Positioning regular maintenance as a path to green driving, and helping the woman customer see that regular maintenance adds to fuel economy and lowers emissions, also will help her understand. Additionally, letting her know of your business’ existing green practices can be a major confidence-booster. The auto industry already has to be pretty green, so it only takes a couple of extra steps to really position your dealership’s service department as an eco-friendly auto service destination.

BUILT FOR COMFORT

Consider offering high-quality coffee, bottled water and snacks in your waiting room, to make your female customer comfortable. And, again remember that she wears many hats and logs a lot of miles in her car every day. Taking the extra time to vacuum or otherwise tidy up inside her car (avoiding personal items, of course) is almost always greeted as a pleasant surprise and saves her the trouble of doing these tasks later. A quick spritz of a pleasant air freshening spray can really make an impression. Consider producing a hangtag for her mirror when she drives away, containing a coupon for her next service visit. That discount, on top of a clean and tidy, nice-smelling vehicle, can seal the deal for a repeat customer.

GO SOCIAL

You may not think that your dealership service department’s Facebook page would be a major source of

“Women customers in particular often feel they aren’t heard when they’re dealing with car problems, and this goes for all women regardless of age group.” customer contact, but you would be surprised. Many successful service departments are doing very well on social media. At many of AskPatty.com’s “certified female friendly” locations, dedicated social media managers cultivate a warm and vibrant community on the business’ Facebook, Twitter, Pinterest, Instagram and other pages. Consider hiring a friendly face to manage your social space, narrate brief how-to videos, prepare and post employee profiles, and take more and more photos of customers and their cars. Also, don’t forget to encourage and monitor customer reviews, so that the positive ones get highlighted. Don’t forget to tag; that will be tricky at first, but as your following grows, try to tag as many customers in photos as you can. All of these steps will help add a human face to your dealership’s service lane, and that builds loyalty!

This service tech should be providing a list of needed repairs in service, but in priority order.

GO THE DISTANCE

In today’s world, most women aren’t looking to be in a new car every few years. Her car is her family’s home on the road, and she means to get all the value she can from the investment. Services and procedures that preserve vehicle longevity may appeal to the thrifty mom looking to take her vehicle well into six-digit mileage, particularly if they can be added to an existing service visit without adding major expense. Such services and procedures could be as simple as a new air filter – if your people notice the car is due for a replacement – or noting some uneven tread wear on the tires. Make sure you frame these additional services as helping keep her vehicle running well for years to come, but avoid the hard sell. If your dealership offer financing on repairs, make sure she understands she has that option. Let her make the decision, and give her all the time she needs.

THINK GREEN

JODY DEVERE CEO of AskPatty.com Inc. Her company runs a website and blog, and offers training, education and marketing support on how dealerships and other automotive retailers can more effectively target women consumers. She speaks at conferences held by sponsors ranging from the National Independent Automobile Dealers Association and Mercedes-Benz to the Car Care Council Women’s Board. Visit her website at www.askpatty.com.

This may be the most important of my tips. When I talk

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AUGUST 2015 Service Drive 31

Point-Of-Sale  Merchandising Strategy Helps Bring FixedOps Areas To Life Avoid common mistakes with signage and displays, and adopt smart practices to drive more sales. BY CHUCK DE MARTIGNY

any products and services that dealerships offer for sale are not represented in any meaningful way for customers to see, examine, explore and evaluate in the service drive, parts department or customer lounge. Instead, a typical display is usually a hodgepodge of free branding materials that various vendors left behind, and used as a decoration with no particular merchandising value. These dealerships are missing an opportunity to educate their service and parts customers, to promote what they sell and the value of buying from them. Their pointof-sale merchandising should attract and engage customers, providing useful and timely information about why the customer should buy from them; availability

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of products and services they need and want; and the dealership’s competitiveness in terms of quality, value and price. Think of your signage and displays as your silent sales team. What messages and calls to action do you want and need to deliver to all your customers, who are in your store right now with wallet in hand? Have you been to the mall lately? Most mall parking lots are full almost every weekend, and many weekdays, too. Consumer confidence continues to recover, and so do retail sales. People actually love to buy things and spend money. However, they usually hate to be sold. That’s why savvy merchants devote significant time and effort to making their products and services

appealing to the customer, accessible to examine and easy to buy. They focus on aspects such as selection (choices), show-and-tell displays, and signage that is informative and helpful about what the customer wants to buy. Prices, features and benefits are clearly identified so that customers can shop and compare. Believe it or not, you are in the retail business as a fixed-ops department. Start looking at your service drive, customer lounge and parts counter as retail space in a retail store. It’s time to effectively merchandise in this space to provide an engaging consumer retail experience (especially for women who are ubershoppers) and watch your sales, CSI scores and customer retention soar.

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RECOMMENDED DOS AND DON’TS  DO USE YOUR OEM AND CO-BRANDING MATERIALS

It is important to always remain compliant with your store brand and the OEM brand of the products and services you offer. Posters and other point-of-sale materials provided by your vendors should only be used if they are co-brand-compliant.

 DO USE PROFESSIONALLY MADE SIGNS IN SNAP FRAMES

Have your signs created by a professional, for best results. Designs can be handled by your ad agency, if your sign vendor cannot produce compliant signs. Use high quality frames that match the finishes used in the dealership (preferably silver or black). All frames should match. We prefer the 2.5-inch, soft bevel frames for indoor and outdoor use that can be custom-sized as needed. Non-glare, clear plastic covers are available for use with OEM-supplied programs. OEM posters are usually 24-by-36-inches.

 DO ADD APPROPRIATE SIGNAGE

Proper signage identifies specific features and benefits, to differentiate the selection. Add full disclosure pricing information. If there is a manufacturer’s mail-in rebate available, affix an overlay sticker to add value while the offer is in effect.

 DO PROMOTE TIRE SALES

You should start at the service drive entrance and promote throughout the drive area. Make sure your tire program is front-and-center. It’s your No. 1 customer retention tool, yet according to NADA, fewer than four of 10 customers realize their dealership sells tires. Also, try doubling down with a tire sale display. Roll out a four-tire special offer at the entrance to the drive, to show your customers that you have tires on sale today.

 DO HAVE A DESIGN PLAN

Even a small space can have big impact. Check out what others are doing, and get some professional help with design if you need it.

 DON’T USE THIRD-PARTY BRANDING MATERIALS

Get rid of the tire brand banners and tire stack covers. They don’t help you sell the specific tires for your customer’s vehicle make and model. Your display space is valuable. Use it to brand your dealership and sell your selection of products and services.

 DON’T TAPE DISPLAY POSTERS TO WINDOWS

Branding and promotional materials need to meet your OEM standards. Don’t use homemade signs, either; they are tacky and unprofessional.

 DON’T USE DISPLAYS AS MERE DECORATION

Hanging some tires on a rack without explaining their make and model, which vehicles they’re for, key attributes of each tire and price is just wasting space. For the same reason, many parts and accessories displays I see also are ineffective.

 DON’T LET YOUR DISPLAYS DETERIORATE

Make someone individually responsible and accountable for maintaining the displays. Have that person conduct monthly maintenance, by: 1) Keeping the display full at all times 2) Keeping the tires or other products cleaned and polished 3) Updating pricing at the beginning of every month 4) And, NEVER EVER use display items to fill an order.

3 1

 Dry marker finishes and stickers make

these signs easy to update. Photos and prices are all easy-on/easy-off, low-tack stickers.

 Make sure informative signs explain the benefits, as well as features, of the products or service, like this sign for a Pennzoil synthetic oil knowledge center.

 If you are selling it, you should have a sign for it. But, make sure you keep your dealer branding consistent by choosing one theme (logos and design elements) and one scheme (color palate).

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CHUCK DE MARTIGNY CEO and Founder of Jungle Cat Marketing Inc. Chuck helps OEMs and dealerships boost profits with innovative point-of-sale marketing initiatives. His extensive consumer marketing and retail merchandising background includes major launches for companies such as Cabbage Patch Kids, Coleco, Donkey Kong and the Grolier CD-ROM Encyclopedia. His focus on tire merchandising lets dealers and manufacturers achieve extraordinary sales growth and increased customer retention through replacement tire sales. To learn more, visit www.junglecatmarketing.com.

AUGUST 2015 Service Drive 33

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I’M GETTING NERVOUS ABOUT THE SOFTNESS IN OUR CUSTOMER-PAY MARGINS. WHERE WOULD YOU SUGGEST INVESTIGATING FOR THE ROOT CAUSE(S)? – JERRI IN RENO, NEV. Michael Roppo, Director of Fixed Operations and Training/ QPS, Automotive Domain Results: My

hope is to answer your profit margin retention concerns, and that your management team and you will consider using some of these elements (preferably all of them) regularly to intentionally influence your profit margin requirements and pricing strategy. Here is the course I would suggest: 1) Understand your service and parts profit margin requirements • Get in touch with the people who influence your parts and service profit margins ASAP • Define your sales revenues, cost-drivers and profit margin requirements • Find out how changes in these drivers affect your dealership’s financial guidelines (e.g., sales, individual and group contributions, net profit margins) • Establish your pricing objectives for your main services being sold 2) Create your prices and test them regularly  Price your parts and services accordingly  Limit costly discounting, direct or indirect  Consider cost averaging for more competitive pricing  Communicate the value of the services you offer

 Measure each individual advisor’s contribution of sales, gross profit required and net profit margins  Adjust pricing strategy to maximize profit contribution of the many services you offer  Reduce incremental, over-costing, wish time being paid to techs, and other avoidable costs 3) Should sales not reach your target of required gross margins • Re-evaluate your value proposition to the customer • Re-examine the service offerings • Consult with your customers (internal and external) • Then, make the necessary adjustments to your price to get your profit margins to the levels they need to be (see CPIs) 4) Make profit margin retention part of the management alignment culture  Believe in the services and the pricing of them  Evaluate pricing regularly (daily, weekly, monthly or quarterly)  Develop standard pricing policies that promote proactive and strategic thinking among staff  Make sure advisors all know how to sell and close with value  Make the service advisors know what the sales and gross profit retention guides are, and how to calculate and estimate them

I READ IN AN ARTICLE YOU WROTE THAT YOU (CHUCK DE MARTIGNY) RECOMMEND A POLICY OF PROMOTING THE OEM REPLACEMENT TIRE, OR “BEST PERFORMANCE-BEST VALUE-BEST PRICE” VS. “GOOD-BETTER-BEST.” I’M CONFUSED. ARE YOU ADVOCATING STOCKING ONLY ONE BRAND OF TIRES AT A DEALERSHIP, AND WHY? – RICHARD IN WARREN, OHIO Chuck De Martigny, CEO and Founder, Jungle Cat Marketing Inc.: The simple answer is

that I am recommending that you follow your OEM brand’s factory tire program and selection guidelines (which normally include multiple tire brands), and that you label your selections “Best Performance – Best Value – Best Price.” Here’s why: Your competitors (namely, the independent and chain tire stores, mass merchants and warehouse clubs) offer “Good – Better – Best” selections. For example, the Michelin, Pirelli and Continental brand tires are usually identified as “best”; Goodyear, Bridgestone, Firestone and other national brands are tagged “better”; and lesser known and offbrands are labeled “good.” Generally, “best” equates with most expensive, better with mid-level price and good is cheapest. That works for stores selling tires for all makes and models, with no regard to which tires are specified by the manufacturer (i.e., the OEM tire) and which are OEM factory approved alternatives for your customer’s specific make and model. As an OEM dealer, however, you have the competitive advantage of being the authorized service center for your OEM brand. Therefore, you should be offering your customer factory approved tire selections for each model of vehicle you sell. The OEM manufacturers work closely with the major tire distributors to offer their dealerships (and the dealerships’ customers) factory approved replacement tires, as an approved program. If you are using the “factory program,” your distributor will provide the OEM replacement tire and factory approved alternatives for each model in your brand. The factory program is vehicle model-specific (not tire brand-specific), in that a Honda Odyssey may have a Michelin tire as the OEM tire with a Continental Run Flat tire as a factory approved upgrade alternative, and a Yokohama tire as a factory approved lower-price alternative. If you use “Good – Better – Best” labeling, which one is “best”? The most expensive alternative is the Continental Run Flat tire. If this is “best,” then the Michelin OEM tire would be labeled “better” and the Yokohama “good.” Does this make sense to you? The tire that the factory spent millions to develop hand-in-hand with Michelin is “better”? Do you really want to tell all your customers to switch to the Run Flat as the “best”? Alternatively, if the OEM tire is the “best,” then what do you label an upgrade alternative? Does it make sense to have two lesser tires for “good” and “better”?

HOW MUCH VALUE DO YOU THINK THE AVERAGE CAR OWNER PUTS THESE DAYS IN OEM PARTS? – SID IN BANGOR, MAINE Rich Holland, Managing Director of AutoPoint: Several companies produce

aftermarket parts, and the quality of these parts tends to vary by brand. Manufacturer parts, on the other hand, tend to be consistent as far as quality and typically come with warranties. OEM parts are easier to replace, and a customer can rest assured that the part they buy will repair the vehicle and will usually last longer than a non-OEM part.

34 Service Drive AUGUST 2015

In addition, when it comes to collision damage, in almost every case a manufacturer’s part will fit better and will look better overall. Most consumers, however, are not knowledgeable enough to differentiate between a quality part and an inferior one. In general, the more important the part is to the safety, integrity and operation of the vehicle, the more important it is to ensure that the part is of good quality. A consumer replacing windshield wiper blades may not have much to worry about if he or she chooses aftermarket parts.

However, when a head gasket needs replacing, that consumer may want to consider choosing a manufacturer’s part to ensure OEM warranty protection for their vehicle. I believe that the average consumer values manufacturer parts, because they come backed with an OEM warranty and are of a reliable quality. The fact is, however, that in many cases, the decision is purely financial. Many customers will choose to go with the aftermarket parts simply because they tend to be less expensive and so decrease the cost of the overall repair.

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