Service Drive Today | February 2016 by CBTNews

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FEBRUARY 2016

a CBT Automotive Network publication

VOLUME 2, ISSUE 2

FUNDAMENTAL TRAINING BASICS EFFECT YOUR SERVICE DEPARTMENT’S BOTTOM LINE

THE POWER OF 10

INCREASE REVENUE BY 10% JEFF COWAN … see PAGE 6

FUNDAMENTAL TRAINING BASICS

EFFECT SERVICE DRIVES BOTTOM LINE

... see PAGE 22

DON REED … see PAGE 8

BUSINESS DEVELOPMENT CENTERS

ENSURE SWIFT PAYBACKS REB GEHRING

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

… see PAGE 20

WAITING ROOM ESSENTIALS

what does your customer lounge need to keep customers coming back? ... see PAGE 13

DO YOU HAVE A CLEAR OBJECTIVE?

Meetings are key communication tools

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

... see PAGE 16

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SERVICE DRIVE MAGAZINE

Letter From The Editor

Email newsroom@servicedrivetoday.com Phone 678.221.2955

President And Publisher Jim Fitzpatrick

Dear Readers, There are so many avenues to explore in the service arena and we at Service Drive are excited about presenting you with the latest information, insights and answers on how to recruit, train and manage your people, retain customers, effectively monitor inventory and — oh yes — make a profit.

MARY WELCH

SERVICE D DAY

It’s a delicate balance and one that has changed over the years. That’s why Service Drive offers the best minds in the business to offer their insights and experience. For this issue we have a Jeff Cowan offering practical steps how a service advisor can increase revenue by as much as 10 percent. While Jeff Cowan teaches how to increase your profits, Don Reed steps up to the plate to make sure you don’t lose money by not training your service advisors properly. In fact, he figures a poorly trained service advisor can cost a dealership by as much as $44,000 in lost profits.

Managing Editor

Brenda Stang offers insights on how to hold an effective meeting that inspires and informs your associates and how not to hold a meeting that has them daydreaming and coming away with a different message than you wanted. Communication is a key to success. On another note, we have Chip Walker who gives some ideas on how to make your customers’ waiting time more agreeable and, in some cases, a profit center. A waiting room that can double as civic meeting space also serves to bring new people into the dealership so you can turn them into customers. It’s all fascinating reading. Our job is to help you with your job so please let us know your thoughts, especially ideas on subjects that matter to you and that you want us to cover. My email address is mwelch@cbtnews.com. Feel free to reach out to me with your thoughts. Together we can make 2016 a blazing success.

Vice President/COO Bridget Fitzpatrick Managing Editor Mary Welch Art Director Brandy Brewer Web Design Michael Marley Director of Marketing & Events Karen Locadia Digital Marketing Associate Erin Mumphord Subscription Manager Emily Wiggins Marketing Associate Emily Lord

MEDIA SALES REPRESENTATIVE Gary Blitzer gblitzer@cbtnews.com d 678.221.2955 c 770.330.6821

In This Issue 6 Better consumer commmunications pays off by 10% or more By Jeff Cowan, Jeff Cowan’s ProTalk

8 How do fundamental customer interactions effect service’s bottom line By Don Reed, DealerPro Training

Service department overhaul leads to better CSI scores By Jon McKenna

Keep up with consumer demand in the waiting room By Chip Walker, Custom Facilities Inc

13 How terrible meetings hinder productivity

By Brenda Stang, Shifting Gears Training

18 Ask the Pros 20 Business Development Centers make dedicated reps By Rob Gehring, Fixed Performance, Inc

22 On The Set With Service Drive Today Results

ONLINE FEATURES Visit www.ServiceDriveToday.com

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BEHIND EVERY PASSIONATE CUSTOMER is a dealer who loves the car business.

For a chance to win your very own #lovethecarbusiness documentary, register at

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Steps To Increase Your

INCOME As a Service Advisor by 10% or More in 2016 Advance preparation for and review of each day, plus better customer communications pay dividends. BY JEFF COWAN

Happy New Year to everyone. For those of you who are NFL fans and whose team did not make the Super Bowl, your heartache is over. The healing can begin, and you can set your sights on the start of next season in September and Super Bowl 2017.

I bring up professional football for a reason. Regardless of whether your team got to the Super Bowl, one thing is for certain: Every NFL team is already hard at work mapping out its future. Those franchises that got to the Super Bowl are game planning for a repeat performance next season. The rest of the teams are working especially hard figuring out what went wrong and what they can fix to reach the championship in 2017. Make no mistake, all of the NFL teams will be working their plans diligently every day of the coming year, so they can maximize their chances of a title as much as humanly possible. In short, football franchises leave nothing to chance – and neither should a dealership service department and its service advisors. If you as an advisor have not already mapped out how to make 2016 your best year yet, the 10-step plan I describe in this article will absolutely help get you there. As a matter of fact, I have shared this plan with many advisors over the years, and those who work it report their personal income has increased by at least 10 percent. Many have told me about even higher gains. While this 10-step plan is very simple and direct, be forewarned: It will initially add one hour to your workday. However, the more you work the plan, the

easier it becomes to implement, and ultimately it will require less time to execute. So, here it is:

efficiency and productivity.

ADVANCE PREPERATION

MIDWAY CORRECTIONS, END-OF-DAY REVIEWS

through your day, make adjustments 4. Halfway where needed. These adjustments can be minor

The early bird gets the worm. Rise and shine an hour earlier than you do now. Use this time to get prepared for the day and catch up on the latest news and hot topics that your customers will be talking about. This hour will prove invaluable for sharpening your senses and getting your head in the game, so you can hit the ground running at work. Watch what you eat. You will be amazed at how much a controlled, healthy diet boosts your energy level, clears your thought processes, make problem solving easier and eliminates the fatigue you typically experience at the end of each workday now. Plus, when you like the reflection in the mirror, it is a confidence-booster. Find time to prepare for the coming day’s business. This is a significant step in increasing your income as a service advisor. Arrive at work at least 45 minutes before your “expected” start time. Examine all pre-printed repair orders and review customer notes. Doing this will help you determine exactly how many hours are possible to sell today. You can measure your success if you prepare a game plan that addresses the issues of the coming day’s customers. This will increase your

or major, and are likely to be varied. There is a reason for a halftime at football games, and it is not to rest!

of each day, review what you’ve done 5. Atrighttheandendwrong. This helps you identify which activities you should replicate, and which you should eliminate. This end-of-day review is a must. An advisor should examine your projections at the beginning of the day and whether you met or exceeded them, or missed them completely. Then, you need to ask why.

BETTER CUSTOMER OUTREACH AND TRAINING In other words, send five 6. communications. more thank-you notes, five more texts and five Add “five more” to your customer

more e-mails and make five more phone calls. Within 30 days, this extra attention should produce significant results. Your communications with customers will center mostly on expressing gratitude for their business. However, it is imperative that you also follow up with disgruntled customers. Also, do not miss the opportunity

“Ifto make you2016asyouran advisor have not already mapped out how best year yet, the 10-step plan I describe in this article will absolutely help get you there.” 6 Service Drive FEBRUARY 2016

ServiceDriveToday.com

“A year from now

how will your business as an individual service advisor look? Between now and then, you will have increased, maintained or lost income.

The plan you create and follow will determine in which of the three outcomes you land.” to acknowledge important customer visits, such as a first visit to your dealership, one needing a significant amount of work, or simply a great customer bringing in his or her vehicle again. If you think “five more,” you will create relationships that secure your future as a service advisor.

Continue your education. Sign up for more training. I know you already are required to undergo a lot of training throughout the year, but search out even more opportunities. Whether the course is for professional or personal growth, go for it. I highly recommend general business and marketing classes.

SHARPENING YOUR FOCUS

Surround yourself with winners. This likely will prove the hardest of my 10 steps, since you may have to sever some longtime relationships. However, remember that those around you are either helping build you up or helping bring you down. Surround yourself with competent, talented people who provide a positive influence on your life. Work your job like it is your own business. I know that at a dealership, an advisor serves

You’ll be surprised how much business will come if you send 5 more notes, 5 more texts, 5 more emails and 5 more phone calls a day.

ServiceDriveToday.com

on a dealership team, a department team an advisor or management team. Of course, you should do everything in your power to assure the success of those teams. However, at the end of the day no one cares more about your kids, your spouse, your car payment, your mortgage or your general lifestyle than you do. You will become a much more successful team player if your individual game is on-point. I often have wondered what would happen if a service desk was run like a styling salon, where each stylist has to rent booth space. each day like it is the last day of the month. 10. Work Why scramble at the end of each month for business in order to achieve your goals? Why endure end-of-the-month drama to hit your numbers? If you work each day of the month like it is the last, then you will end up exceeding your expectations and experiencing much less less stress.

IN CONCLUSION Those are the most straightforward steps I can offer to help a service advisor increase his or her income by at least 10 percent over the next 12 months. In February 2017, two teams will face off in the Super Bowl. Each will have gotten there because left nothing to chance. They had a plan and executed it. When the game is played about a year from now, how will your business as an individual service advisor look? Between now and then, you will have increased, maintained or lost income. The plan you create and follow will determine in which of the three outcomes you land. If you have any questions about my 10-step plan, feel free to e-mail me at jeff@jcowansprotalk.com for feedback. I look forward to helping you in any way I can. Let’s make 2016 a banner year for you, one step a time. SD

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.

FEBRUARY 2016 Service Drive 7

WHAT' IS THE IMPACT OF Not Training A Service Advisor? Try $144,000 Of Lost Profit Professional training on fundamental customer interactions has a huge effect on the service department’s bottom line. BY DON REED

t looks as though last year will go down in history as an all-time sales record for the auto industry, with total vehicle sales of more than 17 million. This, of course, translates into record profits for the new car dealership, especially in its sales department. However, with all those new vehicle sales, you would think retail traffic in service departments also would be growing by leaps and bounds, with increases in the range of 10 percent to 20 percent or even more. Surely service sales per repair order and gross profit margins are jumping to record levels as well – right? In reality, just the opposite is true in far too many service departments (around the world and in both independent and dealership shops). Here’s their reality: Customer pay traffic is about the same as in the

previous year. Profit margins on both parts and labor have declined. Dollar sales per RO and hours per RO both have declined. Quick lube traffic has increased.

ADVISOR TRAINING IS THE KEY FACTOR Of course, some dealerships have seized the opportunities that currently abound in service and parts. They are experiencing record-setting profits. What’s the difference between those dealerships and the many others that are stagnant?

How auto dispatch

I can sum it up in one word: Training. Doesn’t it make sense that a professionally trained service team will outperform an undertrained group? Out of all of your service employees, who has the most direct impact on the performance trends listed above? Answer: The service advisors. In fact, their impact on your store’s success or failure is bigger than your salespeople’s is.

REMEMBER AN ADVISOR’S IMPACT ON CUSTOMERS To make my point, I ask you to consider these questions:

Who fields more incoming sales calls per day – a salesperson or a service advisor?

Who meets and greets more sales opportunities (i.e., customers) each day – a salesperson or a service advisor?

Who has the greater impact on owner retention – a salesperson or a service advisor?

Who has the greater impact on brand loyalty – a salesperson or a service advisor?

Who needs communication skills and sales skills training more – a salesperson or a service advisor?

The correct answers to the first four questions are, of course, the service advisor. The correct answer to question No. 5 is BOTH the salesperson and the service advisor.

CORE PROCESSES DEMAND TRAINING I have seen too many dealers and service managers assign service advisors to answer phones, greet customers in the service drive, handle customer complaints, explain mechanical repairs, etc. with ZERO training of any kind other than how to use the phone and input data into their computer. Below is just a partial list of key processes on which every service advisor should be trained before ever speaking to a customer:

How to answer an incoming call and sell an appointment

How to properly schedule an appointment

How to properly meet and greet the customer in the service drive

You simply can’t afford not to train your service department on customer service. 8 Service Drive FEBRUARY 2016

ServiceDriveToday.com

How to conduct a walk-around at the vehicle with the customer

How to always put the customer FIRST throughout the day

How to train a customer with a maintenance menu

How to present the features and benefits of the technician’s MPI recommendations

How to always offer alternate choices to a customer

How to overcome a customer’s objections

How to conduct an active delivery

How to schedule the customer’s next appointment

“Doesn’t it make sense that a

professionally trained service team will outperform an undertrained group?”

THE DOLLAR PRICE OF SKIMPING ON TRAINING Here is a shocking fact for you to ponder: Failure to properly train your advisors on all of the above processes can cost an average dealer about $144,000 a year in lost customer pay gross profit PER ADVISOR. So, if your department has four advisors, your total cost of conducting no training is about $576,000 a year of lost profit, every single year you are in business! If you compare that figure with whatever your costs would be for an outside, professional training program, I can assure you the ROI would be enormous. Essentially, your dealership cannot afford not to train your entire service team on these critical processes. You might wonder how I calculated that $144,000 per advisor figure (and, by the way, you can do the math in your own store or contact me at dreed@dealerprotraining.com for a free profit improvement plan). Based on our experience at DealerPRO Training over the past 15 years working with hundreds of dealers in the U.S., Canada and the United Kingdom, dealerships that consistently train to the processes I’ve listed above will produce an additional 0.5 hours per customer pay RO with a 75 percent labor margin and an 80 percent parts-to-labor ratio with a 45 percent parts margin, while also increasing their customer pay traffic by at least 10 percent and their CSI. Forfeiting those benefits is what leads me to calculate $144,000 per advisor of lost profit.

WOULD YOU LET SALES TRAINING SLIDE? If you are a dealer or general manager, I suggest you ask yourself the following questions. If you are a fixedops director or service manager, print this article and ask your boss to read it:

1. 2.

Have your salespeople been properly trained on product knowledge?

3. 4. 5. 6.

Have your salespeople been trained on how to give a feature/benefit presentation?

Have your salespeople been trained on some form of the Road to a Sale?

Have your salespeople been trained on how to demonstrate a vehicle? Have your salespeople been trained on how to overcome objections? Have your salespeople been trained on how to turn over a customer to their sales manager?

ServiceDriveToday.com

Service advisors deal more frequently with customers than your sales department.

Have your salespeople been trained on how to properly introduce their customers to the finance manager?

Have your salespeople been trained on how to prospect for new customers?

9. 10.

Have your salespeople been trained on how to know their inventory? Have your salespeople been trained on how to put the customer first, in qualifying that customer’s buying wants/needs?

11.

Have your salespeople been trained on how to follow up with unsold customers?

Have I made my point yet? The 11 processes I listed for training service advisors are just as important, if not more so, than the 11 I listed for salespeople. For those dealers who are committed to making ongoing training a culture within their dealerships, I’m betting this year will produce sales records in both the sales and service departments. The bottom line is, every employee in the dealership needs to be properly trained on how to always put the customer first. SD

DON REED

CEO of DealerPro Training After 26 years in the automobile business as a dealer, GM, sales manager, service manager, service advisor and salesperson, Don began a new career as a consultant and trainer. As CEO of DealerPro Training and founder of The Don Reed PRO Training Network, he has worked with hundreds of dealerships and major dealer groups across the U.S., Canada and the U.K. to increase profits in their fixed operations. He was rated a Top 10 Speaker at the NADA convention for four consecutive years. Visit the firm’s website at DealerProTraining.com.

FEBRUARY 2016 Service Drive 9

FUTURE SERVICE WORK FIGURED PROMINENTLY IN

SUNRISE TOYOTA'S REDESIGN Jimmy Berg’s Long Island store overhaul addressed big needs in the store he bought several years ago. BY JON MCKENNA

hat vehicle service generates the lion’s share of profits at most U.S. dealerships is a reality not lost on Jimmy Berg, the president of two stores on Long Island.

“Technicians are hard to find in this market, and I think we’ve been able to

A complete remaking of the service department figured prominently in the $10 million reconstruction of Sunrise Toyota, in the town of Oakdale about 50 miles from Manhattan. The project opened to customers last summer with 38 service bays, seven detailing bays and a three-lane service drive. Such improvements might not be visible to passing motorists, but they offer a stark contrast to the tattered Toyota dealership that Berg bought in 2008.

add a few of them

specifically because we’ve built the nicest facility on the Island.”

“It was just kind of slapped together,” said Berg, who also runs the Sunrise Chevrolet in Queens and a small MV-1 wheelchair-accessible taxi business. “We had bays in an out building, and customers would have to wait in line and pull under the canopy when we would move a car up. We couldn’t add technicians. We couldn’t sell more service. “The quality of the service was okay, but we still weren’t giving people the customer service they deserved.”

-Jimmy Berg MORE SERVICE LANES HELP Today, Sunrise Toyota uses two interior lanes to line up cars for checks of the wheel alignment, tire tread depth and battery charge (information service advisors have when they sit down to write up a customer) and the third for repair and service jobs. Tire changes, wheel balancings and brake-lift work is handled in a walled-in area in the middle, which also keeps shavings away from the other work areas. Berg reports his stores produced more than $100 million of revenue in 2015, including sales of about 2,800 new and 1,200 used vehicles. “Now, we can probably get 40 cars in there, out of the rain, the cold, the snow, the heat,” enthused Berg,

10 Service Drive FEBRUARY 2016

ServiceDriveToday.com

able to add a few of them specifically because we’ve built the nicest facility on the Island.”

REPAYING THE INVESTMENT Great, but what kind of ROI was needed to cost-justify such an investment in service? By his own description, Berg is a “back-of-the-napkin kind of guy” who is building for the long term (his son, Aaron, is the COO). However, he estimated that a 30 percent increase in service repair orders and parts sales, on a consistent basis, would cover the expansion debt apart from any gains in vehicle sales. So far, Sunrise Toyota already has achieved the 30 percent uptick in daily service ROs, on a same-month comparison basis, he said. Meanwhile, new car sales increased nearly 22 percent last year, which he attributes in large part to more attractive new and used car showrooms and various customer service features.

CRACKING THE GREATER N.Y. MARKET Berg, who has more than 25 years of experience in retail automotive, left his role as VP of the Len Stoler Automotive Group in Owings Mills, Md., to take a crack at the greater New York market (“It’s not for the faint of heart”) and his own store. He opened the Chevrolet dealership in 2013.

Jimmy Berg in front of his Long Island Toyota store.

a veteran dealer who relocated to greater New York City from suburban Baltimore. “The advisors are right there next to the lanes. Plus, we added eight or nine techs.” As for tooling, Berg, after touring about a dozen dealerships around the country for ideas, opted four in-ground lifts, which reduced worries about ground contamination and allowed room for four additional bays. He invested in new tire-changers, wheel-balancers, brake lathes and other equipment, plus a dedicated locker room and bathroom for the service staff. “My philosophy is, give them a great place to work with all of the state-of-the-art tools, and they’ll do their job and take care of their customers. Technicians are hard to find in this market, and I think we’ve been

ServiceDriveToday.com

All told, the Toyota expansion took floor space to 75,000 square feet from 30,000 square feet, on an 11-acre site. At any given time, it may have 800 to 1,000 new and used Toyotas in stock. Other Aspects Of The Project Apart from the service drive improvements, the store’s overhaul, designed by local architect Gary Bruno, included: • Expanded showrooms with 30-foot ceilings. • Three waiting rooms – one for adult customers, one for kids and one as a quiet area for working while they wait. • A $600,000 investment in interior and exterior LED lighting.

• A customer café that will open soon and be supplied by a local deli. “This is a very competitive market,” Berg said of Long Island, which has seven other dealerships, the closest of which to Sunrise is about eight miles in a straight line. “You can’t stay in this business going into the future with an old car facility. You can hang in there and milk that cow until the end, but to really be successful in the future, you need to have a facility that customers are comfortable in and employees are proud to come to. You need to give them nice.” Berg reports his company sold about 2,800 new and 1,200 used vehicles in 2015, and rang up more than $100 million of total revenue.

AMBITIONS FOR CUSTOMER EXPERIENCE While CSI scores and Google star ratings jumped nicely after the expansion opened in June 2015, looking ahead, he wants to take the Toyota store up a couple of notches more in customer experience. He has added to the new facilities with a couple of flourishes like free manicures at the dealership, but next in line for this year are a complete sales process handled on a salesperson’s tablet and reassignment of cashiering duties to the advisor. “I want to give the customer the Apple Store experience,” Berg remarked. “I have the facility for it, now I need the technology.” SD

“This is a very

competitive market.

You can’t stay in this business going into the future with an

old car facility.” -Jimmy Berg

More service lanes allows for better customer service along with more income into the store.

FEBRUARY 2016 Service Drive 11

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WELCOME TO 2016! We as an industry are coming off one of the best SARR’s years ever, and the 2016 forecast is equaling as exciting. Quickly, this means that from the 2008-2010 timeline where we closed over 3000 dealerships with a SARR’s rate at one of the lowest points in years, (right around 10 million units) we are now in very rare air. Over 17 million units, with 3,000 fewer distribution points. What does this mean? Well, your showroom is too small, your shop is too small, your display space is too small, you need more staff everywhere, and most importantly, (hopefully) your sales and profits levels are at levels not enjoyed for some time.

NEXT STEPS TO KEEP CUSTOMERS COMING BACK AND HAPPY A nicely designed waiting room with TV and other amenities creates a positive waiting experience.

How to Turn Your

WAITING AREA

Into A Customer-Friendly, Profitable Room Customers Want More than a Chair, Bad Coffee and a TV BY CHIP WALKER

ServiceDriveToday.com

Now what? What can I do to attract and keep more customers and provide a more inviting environment, and change or add to the customer experience inside my building? While also adding a component of loyalty and familiarity to our location and services? Old problem, right? Maybe, maybe not. Let’s look hard at today’s sales and service customer profiles. More people demand more services, faster and more convenient. Sure we now have online scheduling for service appointments, electronic recall notices, smart phone support and apps for almost ever function inside our building. We have designed our buildings with more and more infrastructure to help here. But, what have we added, does it work? Is it having the effect on our guests, or is it just the flavor of the month that will be gone with the next change of the season? I travel from coast to coast and have been in more dealerships than I count. I am always amazed by what dealers do to attract and keep customers in their store longer or attract them in the first place. A few of the more unusual examples: A high-line ladies dress shop, movie theaters, putting greens, lending library, nail salon, (actually I tried this) and many, many more. So

FEBRUARY 2016 Service Drive 13

“If you

open up your space

to outside groups and let them hold their meetings or gatherings, this brings several people into

your dealership

that maybe have never been there before, never considered your location, brand, etc.”

Introducing a brand name coffee shop or station allows for guests to be more comfortable in your waiting area. what works, and what are we seeing in the design areas for what does works and what you will be changing in a few months?

TRENDS YOU MIGHT USE TO INCREASE CUSTOMER SATISFACTION Here are the trends we are seeing and incorporating into our designs every day.

COMMUNITY ROOMS:

tea corner in the guest waiting area. We have put in national franchises like, Dunkin Donuts, Caribou Coffee, Seattle Best, Jimmy John’s and Subway, all of which are incorporated to the guest waiting area and in conjunction with or without a community room or space. Here is what this does. This feature creates a destination location of an easily recognized food product that is unique and branded and only available through a licensed vendor. The power of this asset is incredible. You not only can offer your guest comfortable seats and areas, but also some comfort food!

This is a larger open room/space where small tables and chairs can be moved to make a “U” shape set up or a traditional class room set up like a lecture hall. Or many small tables can be joined to make a large conference table. The rooms are set up with a small kitchen, microwave, sink with disposal, refrigerator, some even an oven, and all with some type of AV support. Large screen, even a PA system.

A couple of notes here. Make sure you check with your local food codes and covenants as to what constitutes a commercial kitchen versus assembling food products. The power of the above franchises is they do not “cook” food. No deep frying, stoves, grills, or griddles. Cold cut sandwiches are assembled, donuts are delivered from an existing brick and mortar store and not prepared on site.

Who uses this space? Most dealership open this space up for free to community groups, small church groups, service groups the library board, the Masons, Kiwanis, Eagles, Moose. The list goes on and on.

Partner with a local store and make them a tenant in your store so they manage their own labor, product, inventory, etc. They can pay you rent for the square footage they occupy or you can do a percentage of sales as your fee. I have seen some dealers even provide the space for free so they can just provide the service/ product for their guests.

Here is what this does. If you open up your space to outside groups and let them hold their meetings or gatherings, this brings several people into your dealership that maybe have never been there before, never considered your location, brand, etc. Naturally they will become familiar with your layout and services, so you provide each group discounted oil changes, free car wash, donuts for their meeting, you get the idea. Now they are a friend of the dealership and a brand new ambassador for your business. From an internal stand point, this room is also the location for your all company meetings, holiday parties, recognition evens, or kicking off a new model for a ride and drive.

One note, do not give away the product for free, this is a customer pay feature. You ask, I offer free coffee to my

guests now, why would they want to pay for it? Answer: Your coffee stinks. It cannot taste as good as the product that someone is watching and is proud to produce. One additional advantage, your office, shop, sales and even the management staff now have an on-site place to get food and drink without leaving the dealership!

KID AREAS: I am not talking about the 8x8 room you have with the endless loop of Sponge Bob Square pants. I am talking a real McDonald’s, Chuck E. Cheese’s areas with crawling tube, ball pits, rope climbs and video game rooms. Some of the features are glassed enclosed two story areas highly visible from the road and lot. Again you can incorporate the Community Room and offer this space for birthday parties, graduation parties, etc. Here again, this type of commitment comes with a high level of responsibility. All mother and fathers worry about cleanliness in these types of areas, so this means, the space has to be cleaned and inspected every day with a very high level of maintenance to ensure a quality, safe experience for all. This is not an area to go into without a lot of thought, planning, and yes legal advice for liability exposure for the dealership. As always I am limited by space to continue this piece and I have only scratched the surface of the possibilities of the features and options you can include in your guest’s dealership experiences. Make sure it fits your style, culture, and guest needs, and you do your homework on what you can and can’t do in your area. Good luck, make your dealership the Community Friendly, Fun and tasty spot to visit. SD

CHIP WALKER

President of Custom Facilities Inc. Chip has 25 years of construction and design experience and also spent 10 years as COO of one of the largest dealership groups in the Midwest. He also serves as his company’s in-house expert on manufacturer’s imaging programs and on compliance requirements. See the website at www.buildmydealership.com.

COFFEE SHOP/CAFÉ: This can be a full blown deal or a nice coffee/

14 Service Drive FEBRUARY 2016

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STAFF MEETINGS Your Best Communications Tool Paying Attention to Your Team’s Time and Staying on Message Are Key BY BRENDA STANG

magine you are wandering into a maze. You get stuck, confused, make slow progress and wonder how in the world you got there in the first place. By the time you get out, you’re simply glad that you survived and you have no desire to repeat the experience. Being in a terrible meeting is like wandering into a maze and that’s why so many managers avoid them.

CLEAR OBJECTIVE AND AN EYE ON THE CLOCK So, why have meetings? Meetings can be great for getting work done efficiently and effectively while creating a great energy in your department. I’ve suffered through mind-numbing meetings and I’ve been guilty of running some pretty awful ones as well. By following common-sense guidelines, I learned how to run meetings and you can too. Great meetings have a clear objective. They have a clear start and finish time and follow a sensible order to end up with a result. While the most important tool that you can use to create great meetings is an agenda, always keep in mind that agendas are simply a guide to help you achieve your meeting objectives. Consider the following points for your agenda:

Priorities – what items must be covered. Results – what must you accomplish. Sequence – in what order will you cover the topics. Timing – how much time should you spend on each topic. Here are practical suggestions for building your meeting agenda.

A great meeting accomplishes its goal, doesn’t waste time and the creates a positive working environment.

Date, time and place – when and where will the meeting take place.

“Being in a terrible meeting

is like wandering into a maze and that’s why so many managers avoid them.”

16 Service Drive FEBRUARY 2016

MAKE MEETINGS BE AN EFFICIENT USE OF TIME How much of your day is spent in spreading information to your staff? Meetings rank high for efficiency in communication. You have everyone in your department in the same room at the same time receiving the same information. Compare that to repeating messages or asking questions over and over and risk missing someone. Think of the time saved. Imagine how much chaos can be eliminated by making meetings one of the foundations for communication in your department. Take the guess work and uncertainty out of scheduling meetings by picking a consistent day, time and place. I found that technician meetings were more successful when held over a noon hour. In order to have all your front end staff in order in the room together, consider a beginning of day or end of day meeting. No meeting lasted more than 60 minutes. On the list of meeting no-nos, wasting people’s time ranks near the top. List the topics that will be discussed and decide how much time you will allocate to each topic. Make sure that the topics belong in your meeting. If you can deal with a topic with a simple email or memo strike it off your agenda. Using a meeting to simply deliver information is a waste of everyone’s time. You’ll lose your audience if the agenda is full of items that could be dealt more efficiently in another manner. Use your agenda as your time guide to start and end your meetings on time. Don’t hold up meetings waiting for people to show and don’t stop a meeting to bring

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latecomers up to speed. If you say a meeting will end after 60 minutes, end it. Don’t waste time by letting conversations go off topic or getting hijacked by someone’s personal agenda. Keep the topics targeted, focused and on course. Do this and you’ll be able to keep everyone’s attention.

DID THEY GET THE MESSAGE? You may wonder how people can hear the same message and walk away with a different take on the message. Given that everyone has different perspectives, they will run the message through their filters and pick out different meanings from it. Your communication is far more effective when everyone hears the same message and has an opportunity to ask questions and give input. A meeting is the perfect tool to gauge if there are different interpretations of your message. You can find this out, clarify your message, get instant feedback and carry on with more communication if necessary. To be effective there needs to be order and structure. Effective meetings leave you feeling that you have achieved something. As you form your agenda decide what the purpose is and what you want to achieve. There should be a purpose and objective for every topic on your agenda. Your topics should always be relevant to the people in the room.

tion, make a point of asking others for their ideas.

ENERGY AND ACTIVE PARTICIPATION IS KEY The more your staff participates the higher the energy level in the room. The most motivated work areas are the ones with high levels of respectful communication. Meetings give you a great forum to share information, ask questions and express opinions. You don’t have to be a rah rahtype motivational speaker to charge your troops. Work on running the meeting to build a work environment where information is shared and staff are able to contribute.

At the end of each important agenda item, summarize the conclusion. Ask the group if they understand and agree. If needed, you can clarify points and get everyone on the same level of understanding.

Watch the body language of team members. If they are squirming or gazing off into space, you may need to take a short break or adjust the flow of the conversation.

Keep the meeting on topic. Questions and discussions have a tendency to go off topic. Use your agenda to drive the topics and the time spent on discussion. It feels like ‘herding cats’, but the team members will thank you and you will achieve your objectives.

Here are some elements to draw your staff in to be active participants.

If certain people are dominating the conversa-

“Meetings can be great

for getting work done efficiently and effectively while creating

It’s important to get feedback on your agenda, so circulate it to your staff a few days before the meeting and ask for thoughts and ideas. Fresh eyes may detect items that can be removed or added. By informing everyone on what will be covered, your staff can be better prepared to participate with information and questions.

a great energy

At the close of the meeting, summarize the next steps. This refocuses everyone on what was agreed at the meeting.

At the end of the meeting, reflect on it. Make note of what went well, what could have gone better and look for feedback from your team members. How well did you meet your objectives? Using a process to continuously improve will have your meetings be a great foundation for your department’s communications. . SD

in your department.”

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.

Watch your team’s body language so you can guage how to adjust the flow of the conversaton.

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FEBRUARY 2016 Service Drive 17

LARS-ERIK IN MADISON, WIS..: “We have looked into a

Askthe

Pros:

Do you have questions? We have experts who can answer them. We have partnered with some of the top fixed operations consultants in the business who are ready, willing and able to share their knowledge and advice with you. All you have to do is email your questions to Newsroom@ ServiceDriveToday.com, and we’ll take care of the rest.

“When you get through all of the smoke and different opinions, what one or two reasons account for service customers who take their business elsewhere?” ED IN BELLINGHAM, WASH.:

Rich Holland, managing director at AutoPoint:

I could list a million reasons why customers come in for a service appointment and you never see them again. But you’re right, most of the reasons people list are smoke-andmirrors. You asked for one or two reasons, but in reality, there are three reasons customers take their business elsewhere – and they’re very simple. Nine times out of 10, service customers leave because of either 1) lack of connection, 2) convenience or 3) price. If all you are to your customers is some generic, could-be-anyone-else service shop, then they have no compelling reason to come back. In your customers’ minds, that shop down the street can change their oil and rotate their tires just as well as you can. The problem for you is, that’s probably true. Your services don’t set you apart; it’s your service – the experience you create, how you make their lives easier and how you con-

tinuously engage with customers even when they are not on the service drive – that earns their loyalty. As for convenience, if there’s a service shop down the street from your customer’s house, they’re going to go there first. Especially for simple (but profitable) services like oil changes, convenience has a strong pull. Similar to convenience, if your customers get a coupon in the mail that lets them get their oil changed for $10 cheaper than your shop, then you’ve just lost them. The good news is, if you can fix the No. 1 reason why customers leave, then you can often take care of Nos. 2 and 3 along with it. If you offer a level of service that engages, empowers and entices your customers, and continuously engage with them in a positive and meaningful way, then the connection they have with your shop will trump the other reasons they might have for leaving.

three-day, 13-hours-per-day tech schedule, but shouldn’t we worry about the quality of work suffering in hours 10 through 13?”

Chuck Wenzler, consultant and coach at M5 Management Services Inc.:

Non-traditional work schedules are not one-size-fits-all. Some considerations must be taken into account before they are implemented. Technicians must be added; otherwise, all that will take place is spreading out the same amount of current flat rate hour production over a longer period of time. The current production staff must be able to mentally and physically provide sustainable production and quality over a longer period of time. And, does the current work mix support the extended hours? In specific situations, non-traditional work schedules such as 4-10s or 3-13s can produce unexpected results. Decreased production, poor work quality, technician burnout and lower customer satisfaction may occur. Due to the longer workday, technicians may suffer from fatigue during the latter part of their shift. This commonly leads to lower productivity and quality during the last three to five hours of their shift, and most noticeably during the final half of the third day. Techs may start to run out of gas. Heavy line and diesel techs may not be able to deal with the physicality of their work over a 10hour or 13-hour shift. Production may slow and work quality may suffer. On the other hand, techs who perform mostly light-duty, maintenance and express work may be able to easily handle the longer shift. Techs who have spent the better part of their professional years bent over the hood of a car may not be able to handle the extended hours. Hands, backs and knees can only go for so long. Some of the younger, less experienced techs who perform maintenance and express service work may be better suited for the longer work shifts. I would not recommend extended hours for increasing production capacity in a heavy line or diesel environment, although it can be done. 4-10s and 3-13s work very well in situations where the workload is mostly or all maintenance and light repair. The entire service department does not have to work the same shift. Shifts can be designed to accommodate the need.

TOBI IN ALBANY, GA. “Do you think a service manager should be authorized to okay discounted labor on a repair job, or should all discounts have to go before the service

director?”

John Fairchild, president and performance coach at Fairchild Automotive Solutions:

Ideally, the service director should empower each advisor and the service manager with a certain percentage that they are allowed to discount on repair and maintenance items for the right reasons. This will give the customer a direct level of confidence that his or her advisor is, in essence, an assistant service manager able to accommodate the customer’s needs. It also can expedite the situation and often be the very gesture that convinces the customer to proceed. For discount needs that arise and exceed the advisor’s empowerment, the service director may want to review the situation before the customer is given an absolute “No,” in an attempt to salvage high-dollar or otherwise desirable jobs.

18 Service Drive FEBRUARY 2016

The big picture is that the dealer and service director have a target level of gross profit ratio to be retained vs. the retail sales that are made in parts and labor. In an effort to ensure that customers aren’t going somewhere else because of price, but also to make sure not to break the bank, the dealer and service director should come up with a guideline of what is an acceptable level of discount. Now, the reason for an actual discounted repair order should be reserved ONLY as a gesture to keep a job from leaving. If the ticket pricing must be reduced for any other reason, it should be handled differently so it can be monitored properly. Some examples of price reductions that are not actually “discounts” are: · A goodwill policy for customers upset about a circumstance that occurred in your shop. · “Comebacks” that are due to poor workmanship

or incorrect repairs. · Price reductions to absorb an inaccurate initial estimate. · Employee pricing, to extend additional benefits to workers. In each of the above scenarios, reductions should be charged to the appropriate account rather than your applying a simple price discount. Just as a certain level of discount is permissible, each of the categories that require the adjustment for other reasons must be scrutinized. From this analysis, additional training can be administered and policies further refined as needed. Remember, most customers simply want to see the value in your offerings. So, you should initially take a price objection as a reason to explain why the job is priced the way it is, rather than just arbitrarily offer a discount.

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MANY GOOD REASONS TO LAUNCH A Service Department BDC Dedicated reps mean fewer recall and declined-repair opportunities are missed, and the payback can be swift. BY ROB GEHRING

any dealerships have driven tremendous value by developing a sales department business development center (BDC). Without question, most BDCs have improved sales of new and used vehicles on a consistent basis and provided the sales department with solid leads. Far fewer dealerships, however, have developed a service department BDC. To be sure, some have tried to assign additional tasks to the sales department BDC representatives involving service customer contact, and included service contacts on certain items. In this article, I would like to evaluate some of the factors that should be driving your dealership to implement a service department BDC – as well as some that should steer you away from making that investment. The standard dealership service department model of the past had service advisors performing every task involving the customer in any way. In this model, customer care would suffer dramatically as advisors were pulled away to answer telephones, set appointments, update vehicle status, perform cashier duties, and on and on. Even as advisors might be expected to process more than 400 repair orders each month, the dealership management would wonder why the CSI scores lagged below industry standards.

20 Service Drive FEBRUARY 2016

Progressive dealerships today understand the importance of providing an incredible customer experience in the service department. They understand that future vehicle sales often hinge upon how positive an experience the owner has with the service staff. This is a tough reality to deal with, when you realize that none of these customers wants to be near the service drive in the first place. That means something is broken or requires maintenance, and the customer’s day has been interrupted. If you add in the irritations of the service department not answering the phone, or putting a customer’s call on hold or sending it to voice mail, then you shouldn’t be surprised when many customers give up and call your competitor. Retention demands that customers experience professionalism in every phase of their dealership experience. What dealership wouldn’t want to generate as much revenue as possible in fixed operations, where gross margins can exceed 50 percent? The fact is, many dealerships have refused to do much marketing or advertising for their service departments, yet desire those groups to absorb as close to 100 percent of costs as possible. With that backdrop, let’s evaluate some opportunities that could be realized in a service BDC.

Contact customers and remind them that their parts are in or that it’s time for service.

SAFETY RECALLS Over the last several years, open safety campaigns have reached record proportions. There are few signs that the pace will slacken in the future. Auto manufacturers now aggressively bring their issues into safety campaign status, rather than risk large government fines and negative press. They understand the problems with their vehicles and realize that if these problems are not dealt with promptly, then recalls will tarnish their franchise’s image well into the future. A service department BDC would have the time to be proactive in contacting customers about the safety issues. Why place a costly ad in the newspaper promoting a lowcost labor operation such as an oil change, on which your profit will be skimpy on every job? In contrast, safety recall work ensures regular warranty rates on parts and labor, and normal profit margins. Expanding recall repair work also gives a dealership additional opportunities to perform multi-point inspections and recommend other needed maintenance or repairs that carry normal margins. Customers who are in the dealership to receive a low-cost oil change are seldom interested in additional maintenance. But, recall customers are there because they are concerned about staying safe. They are more likely to purchase other repairs or needed maintenance items.

DECLINED REPAIRS Most dealerships don’t do a very good job following up and attempting to schedule a repair that the customer declined on the last visit. A service BDC’s reps would have time to pull a declined repair report from the DMS and actively contact customers to go over concerns, and offer a 10 percent discount if the work is scheduled today. A best practice would be to share declined repair op-

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Even if a repair is declined, a follow-up call may change the customer’s mind.

“Unless you are totally committed to have a professional BDC that is well-staffed and well-trained,

don’t even begin the project.

This is not a project for which you can pull a guy from a less successful department and teach him customer care.” eration totals with service management, so they understand which labor operations require advisor training for feature benefit presentations.

SPECIAL ORDER PARTS Another challenge that dealerships face is to improve follow-up with customers who have specially ordered parts, so that those parts don’t gather dust uninstalled. Without proper contact, customers always get irritated and question the dealership’s commitment to their vehicle care. A BDC could use the parts department’s information on items received to immediately contact the customer and schedule his or her vehicle for repair completion. The service BDC also should consistently contact customers about items that remain on back order, so they are reassured the dealership didn’t forget them.

APPOINTMENT REMINDERS Every professional, even a doctor or dentist, has staff make telephone contacts to remind a patient or customer about tomorrow’s appointment. Smart professionals grasp the costs involved with their essentially standing around and generating no revenue on a no-show. The service BDC should have access to the DMS appointment schedule, so reps can contact customers who are set to arrive the next day. They also should check with the parts department to confirm all of the customer’s parts and components have arrived and are ready for installation.

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CONTACTING LOST CUSTOMERS If a dealership irritates its customers, most of them won’t go to the dealer and complain. Instead, the vast majority simply just won’t come back. They go find another dealership to care for them. If your customer hasn’t been in the dealerships for six months or longer, then the service BDC should contact them to inquire if there are some unresolved issues. Offering a free oil change or safety check at the time provides another shot at getting this customer back. Without any contact, that customer is probably gone forever.

NUMBERS TO EXPECT If your dealership implements all of the procedures I’ve mentioned, and the service department adds 10 more cars a day with an average $250 of spending each, that means an additional $2,500 of revenue per day. Assuming a six-day workweek, that translates to $15,000 of incremental revenue per week, $780,000 of additional parts and labor revenue per year. With gross margins in excess of 50 percent, the dealership could count on more than $350,000 of additional gross profit.

If your service department employs two or more advisors with a monthly RO count exceeding 600, then you should consider a BDC. A quarter-million here and a quarter-million there really add up.

WHEN TO SHY AWAY FROM A BDC That said, unless you are totally committed to have a professional BDC that is well-staffed and well-trained, don’t even begin the project. This is not a project for which you can pull a guy from a less successful department and teach him customer care. Also, you cannot run a BDC on a part-time basis. Customer care is not an 8 a.m.-to-noon service, not if you want to be successful. An efficient service BDC will take several months to develop before any benefits should be expected. With that cautionary note, my view remains that the service BDC is the future. SD

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.

FEBRUARY 2016 Service Drive 21

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