Service Drive Today | March 2016 by CBTNews

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MARCH 2016

VOLUME 2, ISSUE 3

a CBT Automotive Network publication

POSITIVE PROCESSES

FOR CHALLENGING EMPLOYEES JOHN FAIRCHILD

Check out our daily newscast on servicedrivetoday.com

DRIVE CUSTOMER UNDERSTANDING

Service Techs cement customer relationships by educating on technology... see PAGE 16

… see PAGE 10

3 MYTHS BUSTED

EARN CUSTOMER LOYALTY JIM ROCHE … see PAGE 7

POSITIVE EFFECTS

OF OPEN COMMUNICATION PERFORMANCE REVIEWS BRENDA STANG … see PAGE 18

CBT CONFERENCE & EXPO

A recap of the automotive conference experience in Atlanta

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

... see PAGE 12

KEEP YOUR SERVICE PROFITS

Find out why 92% of customers leave the dealership and what you can do to keep the profits ... see PAGE 22

Check out our daily newscast and magazine archives at servicedrivetoday.com

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SERVICE DRIVE MAGAZINE

Letter From The Editor Dear readers, Spring is slowing coming and along with that is spring cleaning and car tuneups. Luckily the service side of the business is thriving and plays an important part in not only customer retention but in influencing the customer on the next purchase. Jim Roche in his article sums it up: When it comes to service retention, nothing matters more than the service experience … not even the vehicle.” Rarely in a job does a person have so much power to positively influence the lives and careers of so many.

MARY WELCH Managing Editor

Of course, the key to having a service department that brings its best every day is to have the best employees and to retain them. No easy job in any field. That’s why Brenda Stang reveals the importance of regular performance reviews and offers some tips to make it easier for you and more productive for everyone. Sometimes an employees seems to lose his or her way or focus and it becomes a manager’s job to notice it and swiftly and fairly nip the situation in the bud. It may be just a short talk pointing out the issue and the employee gets back on track. But once in a while, it takes more interventions and decisions must be made. John Fairchild explains the whole process on how to turn an employee around — or out the door. We hope you enjoy this issue. We welcome your feedback, story ideas and together we can start spring with clean houses and engines that hum and customers who are not only happy, but loyal.

SERVICE DRIVE TODAY Email newsroom@servicedrivetoday.com Phone 678.221.2955

President And Publisher Jim Fitzpatrick Vice President/COO Bridget Fitzpatrick Managing Editor Mary Welch Creative 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 How can you get back the 92% of customers that shop elsewhere

Customer loyalty relies on their experience By Jim Roche, XTime

07 10 Postive processes to engage a challenging employee By John Fairchild, Fairchild Automotive Services

12 An overview of what you missed at the CBT Conference & Expo

How can tech fixes spur customer retention in the service department By Mary Welch

What could you be doing right during employee reviews

By Chuck Demartigny, Jungle Cat Marketing

18 26 On the Set

By Brenda Stang, Shifting Gears Training

18 20 Ask The Pros

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In today’s changing world, firmly held beliefs are being challenged -- and could bring in more revenue.

MYTHS BUSTED

Customers will remain loyal for the right experience BY JIM ROCHE

ou’ve heard modern customers are hard to hold onto. You’ve heard they have too many options to continue visiting the same dealership year after year. You’ve heard they don’t care about experience and they’ll go wherever the price is right. But in reality, today’s customers are eager to be loyal — if you give them the service experience they want. When it comes to service retention, nothing matters more than the service experience … not even the vehicle. A recent study shows that customers who give their vehicle a one-star rating, but have an excellent service experience, have the exact same repurchase potential as customers who rate their vehicle five stars out of five, but have an average service experience.1

Yet somehow, the industry’s service retention rate is only 51%2 — meaning that most dealers lose every other customer who walks through their door. That means they’re also giving up substantial revenue and profit potential. According to GM, a 1% increase in owner loyalty increases revenue by an additional $700 million per year.3 Improve the ownership experience, increase service retention, increase profits. Sounds simple enough, right? So why aren’t more dealers succeeding? Misunderstandings about what customers are really looking for, and what an outstanding ownership experience really looks like, are holding dealers back. To change that, it’s time to do some myth busting.

”Roughly half of recall-related appointments generate customer pay, which amounts to an additional $9,800 in monthly revenue.” ServiceDriveToday.com

Myth No. 1: Most customers prefer morning service appointments Decades of conventional wisdom have convinced dealers to front-load their service schedules. This seems logical: Morning slots are convenient for 9-to5 workers who would otherwise have to negotiate time off. But “working” is no longer the same as “being in the office.” With flexible hours and work-fromhome policies, anywhere with a Wi-Fi connection can be an office — including the customer waiting room. While morning appointments are still the most popular (years of customer habit make this a self-fulfilling prophecy), 44% of appointments fall between 11 a.m. and 4 p.m.4 Ignoring this can result in unfilled service appointments, underutilized shop capacity … and an average loss of $135 in customer pay for every wasted service hour.5 Dealers who space appointments throughout the day maximize shop capacity — and deliver an ownership experience that matches customers’ schedules. So how can dealers make this happen? First, use marketing software to create strategically segmented messaging that promotes unfilled appointment hours. Customers can take the next step using online scheduling software, choosing their preferred time from all available slots. Price elasticity can optimize appointment scheduling even further. Dealerships that take a tip from websites like Priceline. com and offer special discounts on less-popular time slots and can bring in more customers throughout the day.

MARCH 2016 Service Drive 7

“When it comes to service retention, nothing matters more than the service experience … not even the vehicle.” Matching appointments to customer schedules does more than maximize shop capacity. It decreases wait times during peak hours, prioritizes convenience … and delivers an ownership experience worth coming back for.

Myth No. 2: Recalls are always a negative experience If it seems like recalls dominate the automotive news circuit, that’s not an accident. Recalls are also sometimes part of the ownership experience. Nearly 25% of all service appointments are recall-related.6 Many dealers may see recalls as a troublesome, inconvenient process, offering nothing to gain in terms of customer loyalty. But recalls are in fact a great opportunity to improve customer satisfaction. Because all recall maintenance procedures are fully covered by the OEM, a customer can drive up, easily alleviate a safety concern and drive away without paying a cent. It doesn’t stop there — recalls increase profit as well. When a customer completes a recall procedure without spending any money, they’re likely to take care of a maintenance issue they’ve been deferring while they’re in the service drive. This is more common than many dealers realize. Roughly half of recall-related appointments generate customer pay, which amounts to an additional $9,800 in monthly revenue.7 Vehicle owners are taking their appointments above and beyond the recall procedure — good news for them, and good news for dealers.

Using a tablet in the service department can increase customer satisfaction by an average of 72 points.

To transform recalls into service retention and revenue, dealers must deliver a reassuring, convenient ownership experience that builds customer trust in their vehicles … and the dealership. That means using online scheduling software, so customers can quickly and conveniently choose their preferred time slots. It means accessing customer records ahead of time and having the right parts and equipment ready to go. And it means suggesting additional procedures customers actually need, when they need them.

outstanding selling tool. Customers may be skeptical of a service advisor informing them a procedure is necessary, but they’re far more likely to trust technology when it tells them the same thing. And when customer trust rises, so does service retention. Dealerships using tablets during paid service appointments increase service retention by an average of 11%.10

Myth No. 3: Tablets don’t enhance the service experience

While working tablets into a dealership’s process may require some adjustments, the added convenience and value far outweigh any difficulties. And those difficulties should be minimal. After all, everyone from baristas to taxi drivers already uses tablets on the job.

Startup hurdles, technical difficulties, the belief that an existing DMS already gets the job done … dealers have found plenty of excuses not to bring tablets into the service drive. Less than 25% of dealerships currently use tablets,8 but those that do are making new strides in convenience and value. Today’s busy customers don’t have time to waste waiting for service advisors, and with tablets, they don’t have to. No more making customers get out of their cars, walk to a desk and wait for a service advisor. Check-in can happen right at the customer’s vehicle. This creates a more personable experience — and means 7% more customers can be greeted immediately. Overall tablet usage increases Customer Satisfaction Index (CSI) scores by an average of 72 points.9

Drive service retention, not misinformation Customer loyalty isn’t dead — it just requires an outstanding service experience. Customers agree and 54% said they are willing to pay more for their

preferred experience.11 And dealers agree, too. Ninety-four percent of personnel report that a high-quality service experience is more important than the actual repair.12 But to deliver that experience, the myth of the disloyal customer isn’t the only one that needs to be debunked. Only dealers who reject the misinformation leading their service experience down the wrong path will be able to deliver exactly what their customers are looking for — and keep satisfied, loyal, repeat buyers coming back year after year. SD 1. OEM data, based on > 500,000 customer responses 2. IHS / RL Polk Loyalty Study: June 2014 3. General Motors Data, gmauthority.com: January 2014 4. Xtime Market Research: April 2015 5. NADA Data: May 2014 6. Xtime Market Research: February 2016 7. Ibid. 8. J.D. Power and Associates / McGraw Hill Financial: 2015 9. Ibid. 10. Ibid. 11. Autotrader Car Buyer of the Future Study: March 2015 12. Xtime Market Research: February 2016

JIM ROCHE

SVP of Marketing & Managed Services for Xtime Xtime is a company that increases customer retention by transforming the ownership experience. Previously Jim founded Auto Point, where he envisioned and drove the development of the industry’s first multi-channel marketing platform, its adoption by hundreds of deals and subsequent acquisition by SRS.

Beyond speeding the service process, tablets are an

8 Service Drive MARCH 2016

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POSTIVE PROCESSES For Challenging Employees

Turning a Bad Seed Around or Knowing When to Prune BY JOHN FAIRCHILD

Don’t ignore a difficult employee hoping things will work out. Address the issues quickly.

In today’s environment, employable talent is at a premium and seems in short supply. Technicians and advisors do not grow on trees. They are often hard to find and want top-level pay. It seems, at times, we are held hostage by problematic character types, and the reasons they have us at bay seem to give them the upper hand! But let’s have a reality check here. If we let this endure it’s tantamount to that old adage, “The tail wagging the dog.” I want to talk about difficult employees and how they can poison a department and how to deal with them. The goal is to turn that negative team energy around for everyone’s benefit. Here are some typical situations. Do you have employees who consistently show one or more of these behaviors? Refuses or avoids work directly assigned to them. Has a bad attitude and generally conducts themselves poorly. Bad communications skills and habits…refusing to try to improve. Attempts to control situations by using negativity. Calls in, out sick, and pushes time off policies to the very brink.

Typically, with a challenging employee, there’s no sign of passion or drive, and commonly they have a very bad attitude. You may have even had numerous private motivational conversations already with them, only for them to disappoint you once again and leave you contemplating why you even have them around. Odds are, this conduct has not only been successful for them in the past, but is simply part of their character. They may think they are clever enough, and even smarter than you and their co-workers, to beat the system.

Don’t Let Bad Fester The best argument for constantly confronting this issue is the terrible effect it has on your department’s culture and efforts to constantly improve that culture in general. It affects the morale of co-workers and of those who work hard and follow the rules. Allowing situations with problematic employees to continue can often cause otherwise productive and improving team members to sour and sometimes quit. Fresh unexperienced hires can become disillusioned quickly and pick up a host of bad habits that may be irreversible. This scenario tests your ability as a manager and leader. Left unchecked, it can and definitely will start to poison the well, and the rest of your team may waiver and perceive a lack of management consistency on your part.

Does the absolute minimum work expected, but just enough to keep from being terminated. Bad mouthing and constantly testing and criticizing the dealership processes and procedures with others. Backstabs fellow employees.

No one likes to confront these sorts of badly behaved employees. However, having an employee who disrupts the business, has a bad disposition, or is quite bluntly a “bad seed,” requires immediate attention! Never ignore situations like this or pretend they will rectify themselves and somehow just go away. If you

do, you may very well unravel any and all of the trust and credibility you have worked to build with your other team members. You need to attend to this type of matter directly and with consistency once you start to see unwanted actions. Do not delay; it will only get exceedingly harder to handle. We do not want the situation to get beyond repair. The good news is there are some things you can do to correct this type of behavior and start holding them more accountable.

Stages for handling challenging employees Stage 1 - Verbal counsel and warning notice: Since this is step one, give them the benefit of the doubt but explain firmly. Reveal all of the details and bring that person into your office without making a huge deal. Be pleasant but very blunt and truthful. Talk over what you are seeing and how imperative it is to have the entire department working in synchronization. Inquire very forthrightly if there is anything wrong, or if there is some circumstance in the dealership that is causing what is seeming a lot like “an unhappy employee with a bad attitude.” Pay attention and show understanding if the conversation is headed that way. There’s also a chance that there is an underlying personal issue that perhaps you didn’t know. However, if you receive cynical remarks like, “Nothing is the matter with me,” confront this by communicating your perception. You have to be tough, but not offensive. Let them know that their performance is not acceptable and needs to improve and also how to do it.

“The goal is to turn that negative team energy around for everyone’s benefit.” 10 Service Drive MARCH 2016

ServiceDriveToday.com

“Allowing situations with problematic employees to continue can often cause otherwise productive and improving team members to sour and sometimes quit.”

Tips In Stage 2 At this point in the process Clearly communicate what the solution is, and what the consequences are if the behavioral problems continue. You may need to ask for the human resource person at your dealership to assist. Exhaust all steps above first. If the individual really shows considerable improvement, give the credit earned. It should be viewed that you are doing the best for the total good of the Service Department. Do not talk about personal issues, or even

Tips In Stage 1 Be sure you are concentrating on the issue, not the individual. You are witnessing a behavioral problem that you are troubled with, but do not make it seem like it is a personal affront and you just don’t like them. Remain calm, let them vent. Be sure you let the person know that you are attentive to their concerns with a restatement of the conversation. Make sure to bring focus to their strong points, with an emphasis on the good facets of their routine rather than the apparent defiance. The objective is for the manager, and co-workers, to be optimistic, and not negative. Put the issue in perspective as a whole and not the person. “I need to make sure the Service Department is functioning right,” or “I cannot accept preventable problems in the Service Department”. Avoid focusing on the person and saying things like, “You need to…”

Document and date this dialogue as a verbal warning. This is not a written warning, but demonstrates that you did discuss the unacceptable behavioral issues. If you have to end up terminating the employee, the more documentation the better. A huge error is to not document. Documentation and developing an example is the evidence that proves you spoke to this employee on several occasions. Stage 2 - Written Warnings 1 and 2: Carry on confronting until the problematic issues are gone. The employee might try to make you feel like you are singling them out; just stick to the facts. Also understand that you do have to show fairness for everyone. Here’s a common scenario. If the employee is always just a few minutes late, you need to make sure if there are others with the same thing they also are disciplined. Your concerns may or may not be as obvious as job performance or attendance issues. Again, make sure you document the overall conversation.

what was discussed with employee, with the rest of the team. Stage 3 - Suspension and termination: Unfortunately, it may get to the point where you have tried everything mentioned in steps 1 and 2, and the employee is still not willing to modify their behavior. If these are the sad facts, then you need to begin suspension and/or termination procedures in accordance with your company’s policies. By ever vigilantly attending to this part of your management duties you can effectively manage difficult employees and prevent them from poisoning your Service Department’s spirits. From this ongoing point you will continue to gain momentum in building trust and camaraderie with your team to turn that negative team dynamic around for everybody’s advantage. I hoped this will help! SD

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. Reach John at john@johnfairchild.net, or visit the website at www.fairchildautomotivesolutions.com.

An employee who is not motivated can bring a whole department down quickly.

ServiceDriveToday.com

MARCH 2016 Service Drive 11

ATLANTA’S ATLANTA’S ATLANTA’S

PREMIER PREMIER PREMIER AUTOMOTIVE EVENT AUTOMOTIVE EVENT AUTOMOTIVE EVENT CBT Conference & Expo 2016 CBT Conference & Expo 2016

RECAP

Take a look at what the CBT Conference & Expo Feb 9-11, 2016 Take lookatatconference what the CBT Take aalook 9-11,2016 2016 automotive hadConference to offer. & Expo Feb 9-11, automotiveconference had to offer. automotive

ServiceDriveToday.com 12 ServiceDriveToday.com Service Drive MARCH 2016 ServiceDriveToday.com

On February 9th we kicked off our inaugural CBT Automotive Conference Expo. The successful event welcomed OnFebruary February9th 9th& we kicked off ourinaugural inaugural CBT AutomoOn we kicked off our CBT Automo700+ attendees from all areas of retail automotive. Over tive Conference & Expo. The successful event welcomed tive Conference & Expo. The successful event welcomed the 3700+ daysattendees visitors were entertained, educated and enthused bythe attendees from areasofofretail retailautomotive. automotive. Over 700+ from allallareas Over the a roster of over 65 high caliber speakers and trainers covdaysvisitors visitorswere wereentertained, entertained,educated educated and enthused 33days and enthused byby every aspect ofhigh thecaliber industry. Guests were wowed by aroster roster over65 65high caliber speakers and trainers covaering ofofover speakers and trainers covJason Dorsey’s insightful coverage ofGuests the millennial segment eringevery everyaspect aspect theindustry. industry.Guests were wowed ering ofofthe were wowed byby and agreed he stole the show with knowledge and enthuJasonDorsey’s Dorsey’sinsightful insightfulcoverage coverageofofthe the millennial segment Jason millennial segment siasm. Coach Nick Saban taught guests the importance of andagreed agreed he stole theshow show with knowledge and enthuand he stole the with knowledge and enthuleadership and nurturing your team while Marcus Lemonis siasm. importance ofof siasm.Coach CoachNick NickSaban Sabantaught taughtguests gueststhe the importance and Patrickand Lencioni provided straightforward management leadership your Marcus Lemonis leadership andnurturing nurturing yourteam teamwhile while Marcus Lemonis lessons andLencioni powerful businessstraightforward takeaways. and management andPatrick Patrick Lencioniprovided provided straightforward management lessons lessonsand andpowerful powerfulbusiness businesstakeaways. takeaways. It was our mission to provide our guests with an experience other conference inprovide the industry could offer and we Itno our mission our with anan experience Itwas was our missiontotoprovide ourguests guests with experience did just that. The CBT Conference & Expo exceeded our no offer and we noother otherconference conferenceininthe theindustry industrycould could offer and we attendee’s expectations and will continue to do so. Be sure did exceeded our didjust justthat. that.The TheCBT CBTConference Conference& &Expo Expo exceeded our to join us for attendee’s toto dodo so.so. BeBe sure attendee’sexpectations expectationsand andwill willcontinue continue sure thejoin 2017 CBT to to joinususfor for Conference & the the2017 2017CBT CBT SD Expo! Conference Conference&& Expo! Expo! SDSD

MARCH 2016 Service Drive 5 MARCHServiceDriveToday.com 2016 Service Drive 5 MARCH 2016 Service Drive 5

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What did you miss from the CBT Conference & Expo?

14 Service Drive MARCH 2016

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CBT Conference & Expo 2016

SURVEY RECAP How would you rate the line-up of KEYNOTE speakers:

Did the conference fulfill your reason for attending?

75% - Excellent 25% - Above Average

YES - 100% What was the main reason for attending:

PERSONAL GROWTH

SPEAKERS NETWORKING

16%

CONTENT

16%

Do you plan to attend the next CBT Conference & Expo in 2017?

85%

15%

26% 75% YES

42% 25%

NO/UNDECIDED

YES Undecided/No

Would you recommend the CBT Conference & Expo to a friend or colleague?

When surveyed, the majority of attendees agreed, the CBT Conference was a success!

ServiceDriveToday.com

MARCH 2016 Service Drive 15

study by J.D. Power stating that 20% of all customer-reported problems are technology related provides a big opening for dealers and service departments to deepen relationships with customers by going the extra mile to ensure they know how the technology works as well as work with service department to explain what’s wrong. “We want our guests to truly feel comfortable using the technology and we sometimes think of ourselves in the same way a lot of people do with Apple and their genius bar,” says Marcus Williams, vehicle operations manager at Lexus Southern Area, which is comprised of 65 dealerships in 11 states. “If they have a question or am having trouble, we want our guests to feel comfortable coming in or calling so they can learn and, if there’s a problem, we can fix it. It’s non confrontational. And, like at Apple, it strengthens the brand, strengthens the relationship and if while they’re walking around and browsing and they happen to see something new, even better.” The survey showed that the problems with infotainment, navigation and in-vehicle communication systems — collectively known as audio, communication, entertainment and navigation (ACEN) — now accounts for 20 percent of all customer-reported problems. ACEN is now the most problematic area on most vehicles and is the cause of the industry’s 3% yer-over-year decline in vehicle dependability. The study, now in its 27th year, examines problems experienced during the past 12 months by original owners of 2013 model-year vehicles. Overall dependability is determined by the number of problems experienced per 100 vehicles, with a lower score reflecting higher quality. The study covers 177 specific problem symptoms grouped into eight major vehicle categories.

Often a customer must be shown several times how to use technology before they understand and use it.

Service Techs

CEMENT CUSTOMER RELATIONSHIPS Service techs drive customer understanding of technology so customers benefit from all the car’s bells & whistles BY MARY WELCH

“We’ve been tracking this and the problems keep increasing. Last year technology problems ranked fifth in issues; this year’s it’s ranked third,” says Rene Stephens, vice president of U.S. auto quality for J.D. Powers. “It also is across the board. It’s every mix, every model — from high-end cars and small compacts. And, with more penetration of technology in cars the more the problems will continue. If consumers don’t learn how to use Bluetooth properly it’s going to annoy them for years.” The most reported problems are Bluetooth pairing/ connectivity and built-in voice recognition systems misinterpreting commands. Navigation systems that are difficult to use and are inaccurate are among the top 10 most frequently reported problems. The importance of this issue affects brand loyalty. Among owners who experience no problems with their vehicles, 55 percent purchased the same brand again while only 41% who experienced three or more problems with their vehicle stayed with the same brand for their next purchase. In addition, only a third of owners who had to replace a component outside of normal wear and tear said they would definitely repurchase or lease the same brand again. And, while customers expect some breakdowns, customers are more frustrated when their technol-

16 Service Drive MARCH 2016

ServiceDriveToday.com

A J.D. Power Study about technology and it’s uses in consumer’s vehicles.

HIGHEST RANKED NAMEPLATES & MODELS Lexus ranked highest in vehicle dependability with a score of 95 problems per 100 vehicles, followed by Porsche, Buick, Toyota, GMA.

KEY FINDINGS 53% of owners with Bluetooth pairing/ connectivity problems said the vehicle didn’t find/recognize their mobile phone device. Among owners having a voice recognition issue, 67% said the problem was related to the system not recognizing/misinterpreting verbal commands. The number of engine/transmission problems decreases to 24 PP100 in 2016 from 26 PP100 in 2015. Seven of the top 10 problems are design-related. Design-related problems account for 39% of problems reported in the study, a 2-percentage-point increase from 2015.

ogy doesn’t work “because they place a while new level of trust in the technology because it helps them feel comfortable on the road,” says Stephens. “It’s a challenge that service departments need to accept and recognize.” Marcus Williams, vehicle operations manager at Lexus Southern Area, which is comprised of 65 dealerships in 11 states, says that customer evaluations showed them the importance of increasing its technology experts both in the showroom and service area. “Data showed we weren’t doing justice to our products because we weren’t explaining them properly, and that includes in the service area. Our customer feedback and reviews kept say it.” Stephens says that there is more confusion when technology breaks, which is an added challenge for the service department. “You don’t have to really understand cars but just about everyone has heard of brake pads and pistons and they get that things happen. They wear down; they need regular maintenance updates. They’ve dealt with these issues before,” he says. “But it’s a whole different conversation trying to explain why the technology isn’t work properly. That’s why we bring in the technology specialist to work with the service department to ensure that the client understands the problem, why it happened and what must be done to correct it. It’s a different conversation than it is about pistons.” Stephens says that even when the technology works, customers don’t get it. “We found that there is a lot of confusion with consumers about how the technology works and many don’t even use it. We found that 40 percent never use the concierge service or the mobile router. They think it’s great; they don’t know how to use it,” she says. “But consumers were increasingly satisfied when the sales team at the dealership did something like pairing the phone. Satisfaction went up dramatically.” Williams agrees. “I’d say a large precent of customers simply don’t know how to use the technology or understand what all it could do for them. A lot of this technology we didn’t even have five years ago.” Pam Donahue, senior manager of Product and Sales

ServiceDriveToday.com

GM Models receiving an award include the Buick Encore; Buick LaCrosse; Buick Verano; Chevrolet Camaro; Chevrolet Equinox; Chevrolet Malibu; Chevrolet Silverado HD and GMC Yukon. Toyota awardees included the: Lexus ES; Lexus GS; Lexus GX; Toyota Prius v; Toyota Sienna and the Toyota Tundra.

ALSO RECEIVING SEGMENT AWARDS: Fiat 500 Fiat Fit Mercedes-Benz GLK-Class MINI Coupe/Roadster Nissan Murano

Training, Nissan U.S., agrees that technology Nissan service technicians ensure customers are comfortable about the technology. is a great avenue for connecting with customers. Nissan’s Murano received high marks. “Technology can be intuitive for some people, challenging for others. We are all prewired process. “We ask a lot of probing questions to gauge differently and have different levels of experience with what level of knowledge they have about our technoladvanced technology,” she says. “Detailed explanations ogy and what kind of vehicle would meet their needs. and demonstrations during the sales process, and We have some customers who have a very adept also during the service process, can help customers knowledge of technology and want more information understand how technology can make their driving on performance and capability so we shift the converexperience and car ownership more rewarding.” sation that way. Again, it helps build the relationship Like Lexus, Nissan has tech advisors to explain and demonstrate how the technology works and to address any customer issue. “Any opportunity we have to continue our dialogue and relationship with customers can strengthen our brand opinion and also customer loyalty. Helping someone to understand a technology or to use it more effectively is rewarding for us because it helps our customers to realize the fullest potential of their vehicles.” Lexus, which scored highest in the survey for the least amount of issues, says that the sales teams go through training several times a year to ensure that they are up-to-date with the latest and can explain it easily and simply to customers. “We embrace the technology and use our familiarity with the technology as a way to separate us from our competitors,” Williams says. In fact, Lexus uses the technology as a way to further delve into the customer’s needs while in the sales

“We found that

40 percent

never use the concierge service or the mobile router.

They think it’s great;

they don’t know how to use it.” -Rene Stephens

during the sales process; it opens up conversation. During the test drive, our sales consultant is pointing out different buttons and lights and explaining them.” In addition to constantly making sure the sales team is up-to-date on the technology aspect and how to sell it, the brand also has a technology specialist whose sole job is to explain the technology. The specialist not only supplements the salesperson’s conversation but is available to answer questions either by phone or in the dealership if a customer has a question long after they purchased the car. The technician also, if needed, joins with the service department to help explain the problem to the client. Lexus also has a delivery specialist whose job is to again explain every technological aspect of the car and showcase its capability. “We make sure they go through every nook and cranny with the client,” he says. “We also try to set up some of the technology for them like maybe programming their home into the navigational system or linking up their phone.” Stephens says that when a dealership helps set something up, satisfaction with the car and dealership shoots up. “If a customer doesn’t use a feature in the first 30 days, they tend to not use it. They think it’s cool but forget about it,” she says. “So that’s a critical time.” Another way a dealer or service department can deepen the customer relationship is to inform them of any software updates. “A lot of companies have apps that remind a customer of the need for a tune-up but they also tell them if they need to update the software,” Stephens says. “But again, if a dealer wants to send out an email or a friendly reminder, that’s another way of connecting long after the sale.” SD

MARCH 2016 Service Drive 17

PERFORMANCE

REVIEWS:

Gain From Removing The Pain

Establishing simple review processes improves morale and productivity BY BRENDA STANG

Why are Performance Reviews a Good Idea?

ave you managed to get through this winter without catching a cold? Well the good news for all of you cold sufferers is there is a product called Buckley’s Mixture that stops coughs and sore throats for 6 hours. The bad news? Buckley’s slogan is “It tastes awful. And it works.” That’s right, it tastes so bad that people put off taking it until they just can’t handle the coughing any longer. Then as the mixture kicks in and starts working they feel relief and they vow to not wait so long to take it again. Yet they continue to delay taking it because it just tastes so darn awful. Buckley’s Mixture reminds me of performance reviews. Managers know that they are a good way to give feedback to their staff. But the process is so awful that managers put off doing reviews until they absolutely necessary. What would it look like if we could change the process and do reviews in a way that every management and staff member would look forward to it?

Have you ever played a ball game without keeping the score? It’s fun for a short period of time and then it gets boring. A baseball scoreboard keeps the players interested in the game. They always know what the score is, whether they are ahead or behind and they know how many innings are left. Performance reviews are like the dealership’s scoreboard. People need to have standards to measure themselves against, goals to aim for and a time frame to complete it. Without a measurement tool in the workplace jobs can become boring too. Worse yet it can lead to confusion and low morale. People need to know the score. Your staff wants to feel that they make a difference at work. When they started with you they got a fair amount of attention and training as they settled into the daily routine of the business. After they settle in they need feedback to keep improving. Performance reviews are a great communication tool to give feedback to employees and in turn to get to know them better. It’s a shame that the process to complete reviews is so awful and tedious that managers tend to avoid doing them.

What are the Top Review Concerns? When a manager avoids and delays doing something that is proven to be effective in raising performance you look at the process. Bad processes suck the energy and drive out of businesses every day.

“If you haven’t set out

clear standards and goals for your staff to work to, it is difficult to give feedback. It’s like playing a game without knowing the rules.”

18 Service Drive MARCH 2016

ServiceDriveToday.com

Three top concerns about the review process are:

Too large of a time gap between reviews – All of a manager’s time and energy is committed to their daily, weekly and monthly routines. They get good very quickly and build on their skills through repetition of regular tasks. When it comes to an event that happens annually or semi-annually, managers look at the amount of time and energy required to do the work necessary for a traditional review and they delay or pass on it. They haven’t developed a proficiency in it and they don’t see a good return for time spent. Your Getting to know your staff will improve department is moving and performance and morale. adapting so quickly. if your reviews are semi-annual or annual events then your feedback isn’t keeping up with the pace of the business. are so many ways for a review to go off the rails in this process. No wonder so many Lack of clarity on standards and goals – If managers put it off. you haven’t set out clear standards and goals for your staff to work to, it is difficult to give feedback. It’s like playing a game without knowing the rules. At some point you are going to disagree but the question is what are you disagreeing about? This lack of clarity just adds to the time and energy requirements when managers are preparing the reviews. This also leads to reviews that are based on feelings and perceptions. There

Not only is communication important but both parties must agree on goals and performance standards.

Working relationships – If this is the only time that your staff have individual meetings with you, chances are you don’t know them well enough to know what motivates them and how to bring out their best performance. It is nearly impossible to build strong relationships when the reviews happen so infrequently.

The amazing thing about this process is that, in spite of the flaws of the meetings and participants, managers find that reviews open a line of communication with their staff that has a positive effect for a short period of time. Like the Buckley’s Mixture, the performance review brings relief to relationships. We can’t change the taste of the cough medicine but we certainly can change the process so that reviews can occur consistently with less energy expended by the managers.

questions that you should ask yourself before you start revamping your review process.

“The amazing thing about this process is that ... managers find that reviews open a line of communication 3. with their staff that has a positive effect.” Creating a positive practical Successful Review Process Commit to doing reviews more frequently and you will be taking the single most important action in starting the change in your review process. Here are three

How frequent should your reviews be? That depends on your style. Pick a frequency that you can commit to and follow through. The important thing is that you make it part of your routine by doing it and getting better at doing it. I have found that managers who keep their reviews short and to the point have them more frequently and they get great results with their staff. What should you talk about? You need to do the ground work in clearly stating the standards and performance goals of your department. Everybody needs to know what the department and dealership goals are so they can understand their role in achieving those goals. During the review you can talk about their progress to achieving their goals. What are they training on? Everyone should always be learning something. Focus them on talking about the one thing they have total control over. Themselves. This is very motivational because the spotlight is on them. How is this relationship building? Make this 30 minutes of uninterrupted time where you get to know your staff better. There is an old and wise saying, people don’t care until they know that you care. Your goal is to get them to talk about themselves. What makes them tick? What do they care about? What drives them? What are their personal goals? See them for who they are and respect it. Focus on listening and you will hear what motivates them. Take that and use it to channel their energy and activities.

Keep this as simple as possible and make it a meeting that everyone looks forward to and is productive. SD

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.

ServiceDriveToday.com

MARCH 2016 Service Drive 19

“I understand how inventory video can help sales and drive traffic. Are there any benefits in doing videos for my service department?”

PAUL FROM LOS ANGELES:

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.

Tim James, COO of Flick Fusion: Absolutely. Service departments can benefit greatly from producing videos. Here is a list of videos that we recommend for service departments, along with their benefits:

1) Value Proposition. Many customers are afraid that dealership repairs will be expensive. A value proposition video addresses these fears by focusing on how your technicians are trained, the quality of repair work and trustworthiness.

RAOUL E. EL PASO, TX: “I’m looking to save money, “I know my Service Department needs improvement. But I so can a 20 Group be effective if I do if don’t know where to start. How should I remotely??” James F. Dodd, Sr., Dealership Management go about figuring out what to do?” Consultant, NADA ATD 20:

CINDY IN EVANSVILLE, ILL.:

2) Service Department Testimonials. In marketing “they said” is always a lot more powerful than “we said.” Create videos that feature happy and loyal customers.

Rob Gehring, president, Fixed Performances:

The main advantage of virtual 20

3) Service Manager/Staff Introduction. People like to

Group meetings is time manage-

You should be very proud you’re

ment. If you are a small dealership

do business with people they like, so introduce your service manager and other personnel to potential

looking to improve your service

with limited resources it may be difficult to leave the

department. In your evaluation

business for a couple of days. Virtual meetings are

compare your results in sales and

also more cost effective. This venue avoids the cost of

a photo, creating a sense in your customers that they

travel and meeting expenses.

already know you. This increases their comfort level in

If the group is going viral, I would recommend the

choosing your dealership.

gross profits and see how they are trending. Check your advisor summary report looking at labor dollars per repair order, gross profit margins, and repair order counts. Evaluate individual performance and team results looking to determine how it all stacks up.

customers. Videos convey personality far better than

group get together for at least one in-person meeting each year. Keep the virtual meetings short enough to maintain focus. Meet more frequently and minimize areas of discussion to keep on point.

4) Service Department “How To.” Select a dozen of your most common and profitable services. Create videos that talk about why they are important for the health of the vehicle and a quick tutorial of how the

When you want your Service Department to do better

repair is done. This creates confidence in the customer

also evaluate your costs and look for ways that can

that they are making the right decision. Be sure to dis-

help you save. Determine bue if your team is using

cuss the additional damages that can be caused if the

best practice processes such as walking around the

consumer does not have each issue fixed immediately,

customer’s vehicle as they enter the department. Are you checking history for needed maintenance prior to the customer arriving? Work with your service team on feature benefit presentations to customers and what mileage intervals they should be recommended. Talk to your customers often asking how they visits going and really listen to their concerns.

the “time” it takes to complete each repair, any special

“My clients are bringing older cars into my dealership to get serviced. We’re having trouble finding parts. Are there some websites that could help us?”

NICK FROM DENVER, COLO.:

tools needed for each repair, and potential damages that can be caused if the repairs are not completed properly.

5) Upsell. When customers drop their cars off for a scheduled repair, one of their biggest fears is an unnecessary upsell. A short video created by the service

Challenge yourself by asking what process or pro-

Brian Medford, Automotive Expert:

cedure could I implement that would remove this

Yes. Here are some sites I’d recommend for old car

complaint concern from our operation. Now for some

parts. https://www.kanter.com/; https://www.opgi.

“visual proof” that a repair is really needed. A landing

com/; https://www.npdlink.com/; http://rareparts.

page that includes your Value Proposition, Customer

com/.

Testimonial, Introduction, and a “How To” video along

great news! Now that you have this information I will provide a no cost a phone call with you and help you determine an action plan for you to implement at your dealership.

20 Service Drive MARCH 2016

adviser can help to alleviate this fear and provide

with the Upsell Video will also help the customer trust your service team and feel good about their decision to move forward with the additional service(s).

ServiceDriveToday.com

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You’re already too high on their trade, and at the bottom on price, and you’re just hoping you can make it up with volume incentives. Some will walk away from a great deal, and on top of that, end up mad at you and tell their friends how unfair you were. But you keep working those deals and you should, because almost every deal benefits your dealership down the road. You may get that same response; disbelief, anger, etc., when you try to train some salespeople. Most have never been trained, or worse, had terrible training in the past. Now, even though every improvement they make improves their paycheck for the rest of their life in sales, some still fight it or threaten to quit because you’re trying to make them more successful. You can’t give up on training any more than you should give up on working those deals because the benefits to the dealership are too great. So this month, start off with effective training that will deliver results – you’ll sell more cars, make more money and have a lot more fun!

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How

YOUR SERVICE DEPARTMENT Can Claim 1,000 Vehicle Sales In a Year

Retaining customers with tire sales is a marketable sales plan BY CHUCK DEMARTIGNY

he US car market is dominated by OEM franchise car dealerships. Consumers who wish to purchase a new car (with the exception of Tesla) must go to an OEM dealership. Even the government, the military and the Big Fleet operators must go to an OEM car dealership to purchase a new vehicle.

OEM Genuine Parts and factory approved aftermarket products. OEM Dealerships have clean, bright, comfortable customer lounges with refreshments, Wi-Fi and flat screen TVs.

With all of this going for them, one would naturally assume that OEM car dealerships would dominate the auto care service and repair marketplace. Not so much! Look at these statistics and see how dealers are losing customers because they don’t market tire services to their customers while other non-dealership not only do but then keep the service business.

92% of Customers Leave the OEM Dealership to Buy Replacement Tires

ALL new vehicles start their service life in the service department of an OEM Car Dealership. All of the Vehicle’s New Car Warranty Service is provided exclusively at the OEM Car Dealer.

OEM Dealers stock all the

Total USA Auto Care service and repair revenue was $238.4 billion in 2013, according to the 2014 Joint Channel Forecast Model, produced jointly by the Automotive Aftermarket Suppliers Association (AASA) and the Auto Care Association. Customer Pay Parts and Service revenue for OEM car dealerships was just under $30 billion in 2014 according to NADA Data 2014. That means that OEM Car Dealers earned a measly 12.5% share of the approximately $240 billion auto service market last year. What’s even more disheartening is the OEM dealership replacement tire sale market share.

OEM Car Dealers start with a 100% Market Share.

OEM Dealers have the best OEM Factory Trained and Certified Technicians, plus state-of-the-art equipment and facilities to maintain and repair the vehicles they sell.

87.5% of Auto Service Customers service their vehicles somewhere else.

OEM car dealerships start with 100 percent of the market. Grow it, don’t lose it.

According to MTD - Modern Tire Dealer Magazine - auto dealers earned a pitiful 8% market share. Almost three times as many customers choose to purchase tires from Walmart or Costco type stores than from the car dealerships. That’s embarrassing and expensive. Tire replacement is the

“Although it’s true that tire sales alone won’t guarantee retention of every customer, if 92% of the customers are leaving to buy tires and most don’t come back, where else should you start?” 22 Service Drive MARCH 2016

ServiceDriveToday.com

Number 1 point of customer departure. Numerous studies show that about 15% of vehicles on the road today need new tires. And most customers will purchase from the first person that identifies the need and offers the service. Seventy-eight percent of customers will continue to service their vehicle where they purchase their tires. So when customers leave to purchase tires most don’t come back. Cars.com, in the introduction to its new RepairpalTM initiative, states that more than 86 percent of cars on the road today are past warranty. In addition, franchise dealerships are losing a significant share of service revenue to local tire and repair shops and national service chains. “In fact, dealers lose an average of 60 to 78 percent of revenue on cars three to six years old, and between 82 to 92 percent of revenue on cars more than seven years old,” the report stated. A major manufacturer’s survey reported 86% of regular service customers and 46% of occasional service customers become repeat vehicle buyers, according to Jim Phillips, director of consulting for NADA University. That’s great news, except that up to 92% of customers quit their dealership to have their vehicle serviced by independent tire and chain store operations. Once the customers leave, they won’t be helping to build the dealers reputation and the likelihood of their repeat vehicle purchase falls to only 9%.

Sell 150 Vehicles a Month - Lose 1500 Customers This Year

Retain Your Customers - Double Vehicle Sales – Triple Service Revenue

According to NADA the average dealership sold more than 1,800 vehicles, 1003 new and 808 used, with an average advertising cost per vehicle sold of $606. Here’s a summary of the horrendously flawed business model unwittingly employed by many OEM Dealerships. Lost opportunity costs are staggering.

So where should Dealers start? Start with Replacement Tire Sales. NADA University has been promoting Replacement Tire Sales for a number of years urging Car Dealerships to put in tire displays to make their service drive look like a tire store. Although it’s true that tire sales alone won’t guarantee retention of every customer, if 92% of the customers are leaving to buy tires and most don’t come back, where else should you start?

Advertising – Customer Acquisition Cost: ($606 ad cost x 1,800 customers) = $1,080,000 per year Lost Service Revenue: ($1,000 average customer pay x 1,500 lost customers) = $1,500,000 per year Lost Vehicle Sales: (loyal customer 86% repeat rate – 9% repeat rate) 165 Vehicle Sales this year As ridiculously simple as it sounds, any OEM Car Dealer can triple service revenue and double new and used vehicle sales — in half the average lifespan of the next new vehicle sold — simply by retaining the customers they have.

“Almost

AutoNation, Asbury Group and other forward thinking smaller dealer groups and Individuals, have embraced tire sales with professionally developed tire programs. Their results have been significant, with reported sales increases of 300% - 400% and more. Dealers who have tried to build their own in-house programs have, for the most part, achieved only marginal, if any, success. Most Parts Managers (and many Service Managers) lack the merchandising knowledge and experience to build a retail tire operation. Distributors (who see their primary function as logistics) have not been of much help either because they are not equipped to provide the retailing expertise. That’s why, according to NADA, 60% of dealership customers still don’t know their dealer sells tires.

three times as many customers choose to purchase tires from Walmart or Costco type stores

Consumers are keeping their cars longer, according to Greg Gardner of the Detroit Free Press. Average length of ownership has reached 6.5 years, with average vehicle age reaching 11.5 years old, despite the strongest sales of new vehicles in more than a decade. And the Car Park (total number of registered vehicles) has grown by 5.3 million. So Service and Parts revenue continues to grow, averaging almost $1,000 per registered vehicle. The loyal OEM Dealer customer spends $1,105 per year, according to the DME Automotive white paper, The Changing Service Loyalty Landscape.

Various industry sources report that service and parts revenue contribute 40% to 45% of a typical OEM Dealer’s gross profits. However, service traffic, which has been falling 2-3% for the past few years, continues to be weak. Thank goodness for recalls and pre-delivery.

than from the car dealerships.”

Although the investment initially looks significantly bigger, Dealers who implemented professionally built programs report recoupment of their investment from the incremental profits generated by their new Tire Merchandising programs in just a few months.. SD

CHUCK DEMARTIGNY

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.

92% of consumers go outside of the dealership to purchase tires. What are you doing to get them to come back to you?

24 Service Drive MARCH 2016

ServiceDriveToday.com

ON THE SET WITH

April Rain of Digital Rain with Joe Gumm of Service Drive Today.

Michael Roppo of Withum Group.

Jeff Wardwell of StealthShopper.

Steve Hall of NCM Institute. Corinne Lillis of Service Drive Today.

Bill Wittenmyer of Elead1One.

Alex Venneri of Digital Air Strike.

Brian Pasch of PCG Consulting.

Jeff Cowan of Weekly Tune Up.

Don Reed of Dealer Pro Training with Corinne Lillis of Service Drive Today.

Frank Lopes of Forrest & Blake Advertising with Corinne Lillis of Service Drive Today.

Harry Hynekamp and Joseph Michelli of “Driven to Delight” with Jim Fitzpatrick of Service Drive Today. 26 Service Drive MARCH 2016

Jim Roche of Xtime.

Ricky Lopez of Ross Media (left) with Corinne Lillis of Service Drive Today. ServiceDriveToday.com

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

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

www.lovethecarbusiness.com and don’t forget to stop by CBT Automotive Conference & Expo booth #309 on Feb.9-11 in Atlanta, GA.

Enjoy a complimentary copy of NCM’s new best practice guides.

Fundamentals for Service Success

Second Edition ncmassociates.com 866.484.5573

Fundamentals for Parts Performance

First Edition ncmassociates.com 866.484.5573

Fundamentals for Used Vehicle Success

Second Edition ncmassociates.com 866.484.5573

NCM® Associates knows that optimal performance comes from an accountability culture. That’s why our experts recommend these best practices, used by thousands of our most successful clients every day. Adopt proven processes your dealership needs for improved efficiency and profit.

Download the free ebooks at ncmassociates.com/fundamentals Want a printed copy? Visit us at NADA booth #3013C.

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