Service Drive Magazine May 2015

CHECK OUT OUR DAILY NEWSCAST ON SERVICEDRIVETODAY.COM

SERVICE DRIVE MAGAZINE

A CBT AUTOMOTIVE NETWORK PUBLICATION May 2015

Premiere Issue

Entire contents ©2015 Service Drive. All Rights Reserved.

OWNER RETENTION VERSUS

OWNER REPLACEMENT DON REED ...see PAGE 30

THE POWER AND SECURITY OF

BRANDING JEFF COWAN ...see PAGE 16

INCREASE SERVICE PROFITS BY BUILDING THE RIGHT TEAM

CBT EXPANDS

FOOTPRINT INTO FIXED OPERATIONS

THE SOFTER SIDE OF

THE SERVICE DRIVE ANNE FLEMMING ...see PAGE 24

MILLENNIALS IN THE SERVICE DRIVE:

CHANGE IS COMING RICH HOLLAND

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

...see PAGE 12

When Peter Wright took on the job as director of fixed operations for Oregon-based Kendall Automotive Group in 2008, the company only had about nine dealerships. Since then, it has doubled in size and Wright credits the leadership with recognizing the need to focus on fixed operations in order to fully capitalize on its profit potential. Read about how he and his team are contributing to the organization’s overall success. ...see PAGE 20

So many wonderful things are happening in the retail automotive business. CBT Automotive Network is happy to announce that we are growing right along with the industry.

This month we have launched a new website that is devoted solely to the fixed operations of franchised car dealers – ServiceDriveToday. com. And of course, you are reading our newest monthly print publication, Service Drive magazine. Our goal is to bring our readers and viewers the news, information, trends and training that dealerships rely on to operate highly successful and profitable service departments.

ServiceDriveToday.com features a daily newscast hosted by award-winning anchors Bridget Everett and Russell Brown, along with weekly programming which features interviews with some of the industry’s biggest names in the retail auto service sector.

Service Drive magazine and ServiceDriveToday.com are part of the CBT Automotive Network family, which also includes Car Biz Today magazine and CBTNews.com. Be sure to visit our website for even more valuable information you can use to boost profits in fixed operations.

TURNING YOUR DOWNTIME INTO DOLLARS

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

Empty bays and idle time are profit killers in the service department. So what if you could get a daily, weekly or monthly snapshot that showed exactly when your shop and technicians are underutilized? Better yet, what if you could find a way to fill those slots and keep your department running at full capacity? Xtime, a Silicon Valley software company specializing in fixed operations, is helping shops operate more efficiently by bringing the same technology that Priceline and Hotels.com use to fill flights and hotels. ...see PAGE 28

ATTENTION Dealers, GMs, GSMs, Sales Managers, F&I Managers, Marketing Directors, Service Managers, Internet Managers, BDC Managers and Pre-Owned Managers

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SERVICE DRIVE MAGAZINE

Letter from the editor  CBT AUTOMOTIVE NETWORK IS ON THE MOVE AGAIN! With the overwhelming success of our sister publication, Car Biz Today, we thought it was time to step it up a notch. This month marks the introduction of Service Drive magazine – our newest venture into the world of fixed operations.

There are huge opportunities on which service departments can capitalize, and we at CBT Automotive Network feel we can help in bringing the very best information available to help you operate a more profitable service department. We have teamed up with some of the best trainers and consultants in fixed operations to provide insight and knowledge into the trends that are shaping the future of the business.

Our focus is on the nuts and bolts of service – from recruiting and retaining top technicians to achieving outstanding CSI scores and everything in between. Our goal is to deliver useful information that you can put to use in your store today.

We’ve also created a whole new website devoted solely to fixed operations – ServiceDriveToday.com. There you’ll find even more news, information and a ton of video content to help boost your bottom line.

Would you like your very own subscription to Service Drive? It’s free but you have to sign up. Visit the website, fill out the information and we’ll deliver it each month right to your door. Be sure to let your team know they can get their free copies, as well!

Be sure to let me know what you think. I’d love to hear your thoughts on how we can serve you better! You can reach me at newsroom@ServiceDriveToday.com.

CAROL WHITE Managing Editor

SERVICE DRIVE TODAY Email

Newsroom@ServiceDriveToday.com Phone

678.221.2955 PRESIDENT AND PUBLISHER Jim Fitzpatrick VICE PRESIDENT / COO Bridget Everett MANAGING EDITOR Carol White ASSOCIATE EDITOR Russell Brown

CREATIVE DIRECTOR Simone Tieber DESIGNERS Betsy Alvarez, Ruth Gomez PRODUCTION MANAGER Jason Lowsy WEB DESIGN Keith Tuggle

P.S. Be sure to check out our story on Kendall Automotive Group’s incredible fixed operations. I spoke with Peter Wright, service director for the 18-dealership group and found out what his team does to stay ahead of the competition. Your dealership could be featured in an upcoming issue of Service Drive. Email me at newsroom@ ServiceDriveToday.com and let me know what your department is up to!

MARKETING ASSOCIATE Roxanne Luhr SUBSCRIPTION MANAGER Tom Domagalski

DRIVE SERVICETODAY.COM

MEDIA SALES REPRESENTATIVE Alex Branam abranam@cbtnews.com d 678.221.2962 c 770.561.8259

HELPING DEALERSHIP SERVICE & PARTS MANAGERS DRIVE MORE PROFITS TO THE BOTTOM LINE

Subscriptions To subscribe electronically, log on to ServiceDriveToday.com and click the subscribe link on the side bar. Alternately, forward your company name, your name, address, phone number and email address to info@ServiceDriveToday.com or CBT Automotive Network, 5 Concourse Parkway Suite 2410, Atlanta, GA 30328.

Please send address changes to the above email or mailing address.

Permission to reprint or quote excerpts granted only upon written request.

Advertising rates are provided upon request.

Go to ServiceDriveToday.com to sign up for your free subscription now!

4 Service Drive MAY 2015

ServiceDriveToday.com

TURN-UP R U O Y

TUNE-UPS

$5,995 $9,995

Jim Fitzpatrick

Founder and CEO of CBT Automotive Network

CBT AUTOMOTIVE NETWORK ANNOUNCES 3 NEW VENTURES: SERVICE DRIVE TODAY.COM, SERVICE DRIVE MAGAZINE AND CBT CONFERENCE & EXPO The first quarter of 2015 has been very busy for the CBT staff

Last month our team had the opportunity to attend the NADA/J.D. Power Automotive Forum, the New York Auto Show and the Innovative Dealer Summit where I was fortunate to meet with and interview some of the top

In addition to the newscast, ServiceDriveToday.com will have programs covering all areas of your service operation. For instance, “Weekly Tune Up” with Jeff Cowan will deliver best practices, training tips and interviews with

executives from auto manufacturers, as well as thought leaders and innovators in the auto industry. These events were buzzing with excitement about the state of automotive retail and the future of our great business. It is on FIRE and will only get stronger in the coming years.

people who will help you move the needle in your service drive. “Auto Marketing Now” with Brian Pasch will tell you what works and what doesn’t work when it comes to connecting with those hard-to-find service customers.

We at CBT Automotive Network are proud to do our part in promoting the best interests of retail automotive. We have been busy building a media platform to help you run your dealerships more efficiently and much more

Service Drive magazine is the perfect complement to ServiceDriveToday.com. Along with the insightful and relevant articles that

profitably. I am excited to tell you about all the great things happening here at CBT Automotive Network.

L et me start by telling you about our amazing growth over the last two and a half years. CBT now has more than 100,000 subscribers throughout all of North America. From Toronto, Canada to Miami, Fla., we have truly become the official news source for the retail automotive industry.

On One year after starting CBTNews.com we decided to launch Car Biz Today magazine. Ever since our first issue back in January 2014, dealers and fixed ops directors have asked, “What about the service department? Will CBT offer a website, daily newscast and magazine designed specifically around

are found inside the covers each month, we will spotlight a dealership and dig into what makes their shop a success. In addition to receiving a free, printed copy of Service Drive magazine, you’ll be able to access every issue on the website.

But that’s not all that we’ve got going on at CBT Automotive Network. Last month we announced we will be hosing the first CBT Automotive Sales, Service and Marketing Conference & Expo in February 2016 right here in the heart of the Southeast – Atlanta, Georgia!

the needs of the men and women working in the service, parts and collision centers at new car dealerships?”

Unlike other automotive conferences that

Well, you will be happy to know that this month, CBT Automotive Network is launching another great resource for new car dealers and their service department personnel – ServiceDriveToday.com.

Marketing Conference & Expo will have something great for every member of your dealership team. Later this year we will be announcing the world-class speakers who will educate you on the latest things happening in

Much like CBTNews.com, ServiceDriveToday.com will provide service managers and parts and collision center managers with news, information, best practices, in-depth interviews, training tips, and so much more.

ServiceDriveToday.com will feature a daily newscast featuring CBT’s very own Bridget Everett and Russell Brown. Every day Bridget and Russ will deliver industry news and updates that affect dealers’ fixed operations. From safety and compliance issues to sales and marketing techniques, they will provide the news your service and parts department can use.

We will feature all of the top trainers and consultants in the fixed operations business including Jeff Cowan, Don Reed, Lee Harkins and Chris Collins just to name a few.

6 Service Drive MAY 2015

focus on one or two areas of your dealership, the CBT Automotive Sales, Service and

all areas of the retail automotive industry including leadership, management, sales, service, marketing, F&I, BDC, leasing, customer service and so much more.

We chose to hold our first conference in Atlanta for a few reasons. First, Atlanta is our hometown! That’s right – the CBT studios and executive offices are located in Atlanta. Second, it’s one of the easiest places to get to from any other city in North America.

Hartsfield-Jackson Atlanta International Airport is the second busiest airport in the world and is the hub for Delta airlines. Third, Atlanta is an amazing city with awesome people.

It’s

also

home

to

the

world-famous Atlanta Braves, Atlanta Hawks and the Atlanta Falcons, not to mention the College Football Hall of Fame and Fan Experience, the World of Coca-Cola and the world-renowned Georgia Aquarium.

Did I mention the temperature in our fair city often gets as high as 65 degrees during February? It might just be the nicest place to live or visit in the U.S. Be sure to mark your calendar for February 9-11. We hope to see you at the CBT Automotive Sales, Service and Marketing Conference & Expo!

ServiceDriveToday.com

SCHEDULED RETENTION With EasyCare Maintenance, you CUSTOMIZE your plan for your dealership, RETAIN your customers in your service drive and significantly increase REPEAT SALES OPPORTUNITIES!

What are you waiting for?

Start retaining more customers at

easycare.com/maintenance

© 2015 Automobile Protection Corporation-APCO. EasyCare is a registered trademark of Automobile Protection Corporation – APCO. MOTOR TREND® is a registered trademark of TEN: The Enthusiast Network Magazines, LLC.

How to Effectively

Merchandise

Tires Merchandising tires in the service drive will increase customer retention and boost car sales, too. BY CHUCK DE MARTIGNY

A

good first impression should be a lasting first impression. The service drive is just as important as your showroom to your first-time visitors. And it will create the same kind of emotional feelings of confidence and trust from potential customers for both sales and service.

A recent survey conducted by Harris-ADT for Cars. com shows that 64 percent of today’s potential car buyers consider service to be an important factor in choosing a dealer. NADA University recommends that your service drive look like a tire store. Why tires?

Because tires are a key safety issue – safety is a key sales trigger – and replacement tires are where dealerships lose most service customers, making tire sales a key to customer retention. That’s why major dealership groups like AutoNation and Asbury Automotive Group have made significant investments in merchandising tires on the service drive, achieving outstanding results.

You need a great display and you need great signage if you want to have great tire sales success. Putting up the right type of tire display rack is imperative. Then reinforcing the message with impactful and informative point-of-sale signage will add the horsepower. From the time your customer arrives in the service drive to the time they leave, make sure they know you are serious about tires and committed to providing superior service.

Your tire displays should focus on the right tires for each specific make and model, because this is your greatest competitive advantage. Tire stores promote “good-better-best” selections, but for a car dealership, since the best tire should be the OEM replacement tire, a better approach is “best performance-best value-best price.” This differentiates you from the tire stores, and eliminates the problem of identifying which is the best tire for a particular vehicle.

We recommend that the OEM replacement tire be identified as the best-value tire, because the ride and handling characteristics matches the customer’s experience when they bought the vehicle. If your customer liked the way the car handled on their original test drive, that’s what they will get when they replace the tire with your best-value OEM replacement tire. It’s

8 Service Drive MAY 2015

ServiceDriveToday.com

SAVE THE

DATE

FEB 9-11

2016 O M N I AT

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AT L A N TA

Attention Dealers, GMs, GSMs, Sales Managers, F&I Managers, Marketing Directors, Service Managers, Internet Managers, BDC Managers and Pre-Owned Managers CBT Automotive Network is proud to announce the 2016 CBT Automotive Sales, Service and Marketing Conference & Expo.

The retail automotive industry's top leaders and keynote speakers will come together to present more than 100 powerful sessions and thought-provoking panel discussions during this dynamic three-day event.

Mark your calendar now for February 9-11, 2016.

We'll see you in Atlanta!

Visit CBT Conference and Expo.com for more information

Did you know that you can generate $1,500 in additional ROs for every $1,000 of tire sales?

That’s why this tool is so important. the one best suited to their vehicle as determined by the manufacturer.

Your best-performance tire needs to show valueadded benefits that justify its higher price, while your best-price tire identifies why it is a cheaper alternative such as a shorter mileage warranty or a lesser-known brand. Don’t dis it; explain it!

Signage in the display area close to the display should include a tire-inspection poster that identifies the major causes of tire failure. This tool is vital for add-on service required to correct problems such as alignment, shocks, ball joints or other related issues that will lead to another tire failure if not corrected. Did you know that you can generate $1,500 in additional ROs for every $1,000 of tire sales? That’s why this tool is so important.

“Price-match guarantee” and “vehicle-match guarantee” are our other two favorite signs because they set the stage for making the sale. The price-match guarantee disarms the higher price perception of most customers. It assures your customer that you are as competitive as anyone, and you guarantee it.

The vehicle-match guarantee adds the value of your unique knowledge and expertise to buying tires from you. You know the vehicle brand better than anyone, and you know which tires are the right tires for your customer and their vehicle.

Together these signs are the one-two punch that will knock out your competition.

Signage should re-enforce the value proposition

10 Service Drive MAY 2015

you bring to the replacement tire business, clearly explaining your program and the value benefits you add to the tire replacement process. These signs won’t necessarily generate a sale today, but they plant the seed and leave a lasting impression with your customer that when it comes to tires, you mean business. And when it’s time to replace their tires they will think of you first.

Well-designed signage can be decorative as well as informative so don’t overlook the merchandising opportunities in the customer lounge and parts department for signage and displays to help build sales.

Supercharge Sales with Promotional Tires

Once you have set the stage with your tire merchandising displays and signage, supercharge your program with a

special promotional display. In most retail stores, you will find end-bunks and special promotional display tables for special “sales” and “promotions.” These are part of the overall program but differentiate themselves with special pricing or features that create an immediate call to action. We prefer rolling Quad racks to promote four-tire deals, especially those featuring a mail-in rebate that adds an extra kick to the “sale.”

Promotional racks like the rolling Quad rack shown above can generate one or more extra sales each and every week. That’s an extra $2,000 a month or more of incremental tire sales. Keep it stocked and move it around your drive to drive those additional sales.

Last but not least, promote your tire business. Let your customers know you mean business with signage customers will see as they enter your drive. If you don’t have space for a sign, be creative!

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

ServiceDriveToday.com

Ever wished your OnStar appointments could virtually schedule themselves?

SCI LANEDRIVERPLUS

is the virtual assistant you’ve been waiting for.

SCI LaneDRIVERPLUS collects OnStar leads and automates the appointment scheduling so you don’t have to. With customizable settings and an easy interface, you just pre-set your service time slots, and the system takes care of the rest.

So you can transfer some admin time into more sales time, service time ….. or just coffee time.

855-984-3360 scimarketview.com

Millennials in the Service Drive

Change Is

Coming Implementing significant changes in your sales process will go far in attracting young, well-educated salespeople and increasing your employee retention rate. BY RICH HOLLAND

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n today’s world, efficiency and information are increasingly important. Not a day goes by without an announcement of companies adding services, or improving on existing ones, all in an effort to satisfy consumer demand. Think about it – overnight shipping must not be fast enough anymore with the introduction of same-day delivery in some markets.

Retailers – both off and online – are training consumers to expect fast service, instant gratification and transparency throughout the entire process.

Millennials have grown up in a world filled with technology. Cell phones, beyond anything we could have imagined just a few years ago, are like an item of clothing to millennials.

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ServiceDriveToday.com

They have computers, laptops, tablets, streaming video on-demand, and blazing-fast Internet speeds. They can even use the Internet without having to touch any hardware whatsoever. The Amazon Echo can access the entire knowledgebase of Amazon – including Wikipedia, and other sources – to answer questions, schedule appointments, set alarms, create shopping lists and more, all with just a spoken command. The system even enables consumers to add items to their Amazon shopping cart via Twitter: #AmazonCart.

Today’s car buyers have vehicles equipped with technology that would have seemed alien 10 years ago.

Vehicles can be tracked via Lojack, and drivers can get roadside assistance, directions or even make dinner reservations if equipped with OnStar. Self-diagnosing cars remotely report any problems to their selected dealership, while sending a service reminder to the owner.

Some OEMs are even starting to integrate vehicle service appointment scheduling right into the vehicle’s dashboards There is no doubt that millennials communicate differently than any previous generation. Some don’t even use the same technology that older generations may still prefer. Take voicemail for example. Many millennials won’t even leave, or listen to voicemail messages anymore; preferring to receive electronic communications, such as text messages. A few highline OEMs are even starting to require dealerships to have two-way electronic communication systems installed. Millennials want to wait less, do things at their convenience and with less human interaction. They want access to information in formats that they choose. Take a greasy service inspection form to them for their service recommendations and watch them cringe.

It is important to understand that this technological shift in our way of life is only going to continue to grow.

If you keep trying to reach millennials by phone for approval of service recommendations, you could be wasting a lot of valuable time and getting a very low response rate.

We’re seeing technology like Apple Pay alter entire payment processes. Facebook recently added a feature that allows users to send their friends money through their Messenger app. Yes – you can now actually send money via chat. In the not-too-distant future, we may see consumers pre-swiping their credit cards, or paying for their service online, before they even come pick up their vehicles – simply to avoid having to stand in line, waiting to pay.

How do we prepare our service drives for this demanding generation?

Adapt to how these consumers want to do things.

The experience they receive must be the one that they desire. Consider this: almost 80 percent of consumers still opt to call to a dealership to schedule a service appointment. While most dealership websites offer an online appointment-scheduling feature, it’s mostly just a conversion form. There is no true appointment-scheduling happening. No real-time confirmation that the time they want to come is even available. They want to know that they have a true appointment, and they want it right now.

Millennials are highly visual. Video content on the Internet is exploding and is the dominant content type favored by millennials. It’s only common sense to project that they would also prefer this type of content when trying to make financial decisions regarding services they have little knowledge of. The same concept applies to service recommendations. In most cases, millennials do not truly understand all the features and benefits of non-basic services. They understand an oil change and tire rotation, but start recommending a transmission flush and you’ll see a look of complete confusion. However, bring out an iPad and show them a video explaining the features and benefits or send a link for them to view on their mobile device and you may just see an objection turn into an acceptance.

One of the single most important things that dealers fail to do is follow up on declined service recommendations. A lot of recommendations don’t get done and, for lack of follow-up, dealers leave a lot of money on the table. On average, dealers who follow up their service recommendations on a monthly basis see an upsell increase of 50 percent in as little as 30 days.

Ease of doing business is vital for these millennials. Make it easier for them to receive and respond to service recommendations. How many times have you been unable to give service recommendations to your customer until they come to pick up their vehicle? Chances are quite a few. At that point, the customer doesn’t want to leave their vehicle at the dealership any longer. Had you been able to contact them sooner, and provided an easy way for them to respond with their approvals, you would stand a much better chance of having been able to complete the work.

If you keep trying to reach millennials by phone for approval of service recommendations, you could be wasting a lot of valuable time and getting a very low response rate. Millennials will respond faster when it’s delivered digitally via email and/or text message. Give them a way to review your recommendations and to accept or reject them immediately. You’ll find your upsell percentages increase for the simplest of reasons: you’ll connect with the customer faster and in a way in which they understand. They can research at their desk at work, if they wish, and respond to you immediately.

The adoption of technology and processes that cater to the tech-savvy millennial generation will bring you more business with greater efficiency, while offering a low-pressure experience of transparency and information. Millennials are the most knowledgeable generation we’ve seen. Dealers would be wise to progress with this generation and provide the experiences they want – or they will soon find those customers leaving for a dealership or independent that did.

RICH HOLLAND Managing Director of AutoPoint As a frequent speaker on the future of automotive dealership service, Rich believes in an “adaptor-die” theory of innovation. With more than 30 years of diverse experience, he is a recognized expert in information technologies and creating customer loyalty through digital excellence.

Visit the website at Autopoint.com.

ServiceDriveToday.com

MAY 2015 Service Drive 13

Understanding

Critical Performance Indicators Having a good understanding of the numbers that fuel performance and profitability will help keep the service bays filled. BY MICHAEL ROPPO

W

hile the service business is fun, it’s not just for fun! A clear focus on a solid business opportunity – where there are enough customers coming into the service drive who are ready, willing and able to pay the value-added prices you’re seeking by presenting value-added services so the dealership can operate profitably – is of utmost importance.

Sounds obvious, right? But the ability to identify and maximize those profitable business opportunities to do business even further requires a good understanding of the critical performance indicators within the industry, which takes talent these days. And it is a learned skill set, which requires that you know the numbers and formulas that drive business forward in any economy.

Understanding these CPI’s and formulas makes us realize that in almost every market there are dealerships generating exponential results and exceptional levels of profitability. You’ll need to know how the numbers work and the difference between these terms in order to measure your business’ potential for profitability. (See Terms, Numbers and Formulas) While knowing these numbers and how they work is an important thing, it needs to be communicated on a more frequent basis with the people who actually create the results that come from them. The problem with numbers is

14 Service Drive MAY 2015

not just numbers, per se; it’s where and how we allow them to intentionally or automatically fall in our order of operations that determines our level of performance and profitability. It all matters!

Therefore, improving our industry’s operational, financial literacy and understanding of how CPIs work and influence business is a good thing. The information that can help us drive our industry forward is out there, it always has been, and reliable organizations certainly encourage you to go find it, understand it, communicate the importance of it and put it to use so you, too, can have something that I like to refer to as “intentional profitability” results.

Having a good understanding of the CPIs like the ones listed here, as well as many others that are not, provide solid financial information that dealers, leaders and managers can use to influence and monitor progress. This knowledge can also aid in making intelligent, management-driven decisions, and allow you to make the adjustments required to fuel business success.

ServiceDriveToday.com

Terms, Numbers and Formulas NET PROFIT – The amount of money the dealer or business owner takes away after paying all the bills, including his or her own salary. (Sales - Cost of Sales Expenses = Net). There are only three ways to increase net, and those are to decrease expenses, increase revenue and lower the cost of sales.

ASSET MANAGEMENT – The act of controlling expenses and maximizing dealership assets, such as gross profits is asset management. This may include dealers, managers and employees that sell or don’t.

CALENDAR UTILIZATION – The number of days worked in a given time period versus the number of days the technicians or production people were scheduled to be at work.

CLOCK HOUR UTILIZATION – The difference between a technician’s clock hours worked and the number of hours actually worked.

CLOCK HOURS WORKED – The number of hours technicians are supposed to be onsite and available for work.

COST OF SALES – Any monies spent for the production of billable labor.

DAYS WORKED IN A MONTH – The number of potential working hours available per month. (Total Number of Daily Hours Available x The Average Number of Workdays Per Month) EFFECTIVE LABOR SELLING RATE – The average dollar amount collected for a flat rate hour. (Total Labor Sales Per Labor Category ÷ Total Hours Billed Associated With the Labor Category) FIXED EXPENSES – Productive or non-productive expenses over which the department managers have little or no control.

GROSS PROFIT – Sales - Cost of Sales ÷ The amount left from a sale after the technicians have been paid.

(Total Labor Sales Dollars ÷ Cost Of Sales) GROSS PROFIT PERCENT – A numeric value of a current profit figure expressed as a percentage (may

ServiceDriveToday.com

not always provide the most accurate view of profit figures). (Gross Profit ÷ Total Labor Sales Dollars) INDIVIDUAL PRODUCTION OBJECTIVES – Performance goals established to increase overall production, usually achieved by applying a specified percentage increase to the current hours billed by individual technicians. (Current Hours Billed x Percentage Increase) MONTHLY AVAILABLE GROSS PROFIT TOTAL – Calculation used to determine a month’s total gross profit potential based on the total monthly hours available for billing, a specified effective labor sales rate and gross profit percent. (Total Available Hours Billed Per Month x Effective Labor Sales Rate x Gross Profit Percent) MONTHLY HOURS AVAILABLE FOR BILLING – Calculation used to determine a month’s total number of potential billing hours based on a specified number of technicians and percent of productivity. (Number of Clock Hours per Day x Average Days per Month x Calendar Utilization x Number of Technicians x Percent of Production) NON-PRODUCTIVE EXPENSES – Required Expenses that support overall sales or gross profits and as a result are the cost of doing business with no visible return on investment.

NUMBER OF TECHNICIANS REQUIRED TO BREAKEVEN – The number of technicians needed to generate the sales required to counterbalance an expense.

(Sales Required to Break Even ÷ Technician Labor Sales Value)

While knowing these numbers and how they work is an important thing, it needs to be communicated on a more frequent basis with the people who actually create the results that come from them.

OPERATIONAL EXPENSES – Productive or nonproductive expenses over which the department manager is able to control.

PERCENT OF PRODUCTIVITY – Technician production expressed as a percentage designed to evaluate and compare productivity between time periods and among technical staff. (Hours Billed ÷ Clock Hours Worked).

PRODUCTIVE EXPENSES – Expenses that produce sales or gross profit, providing a return on investment.

This may include the non-visible expenses.

SALES REQUIRED TO BREAK-EVEN – The amount of sales required to counterbalance an expense. (Total Expenses ÷ Gross Profit Percent) TECHNICIAN VALUE – The amount of sales dollars a technician is capable of generating. Technician Clock Hours Worked x Percent of Productivity x Effective Labor Sales Rate x Days Worked in a Month x Calendar Utilization. An example of minimal acceptable performance (MAP) is: 10 Available Techs x 8 hours = 80 hours of available and saleable shop hours per day ÷ 2.0 average hours per repair order = a required 40 appointments or reservations on an average day to keep the capacity of production at 100 percent.

NUMBER OF DAILY APPOINTMENTS – The amount of daily reservations required to properly load and support the production of the shop at the desired capacity.

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

Visit his website at AutomotiveDomainResults.com

MAY 2015 Service Drive 15

The Power and Security of

Branding Establishing your service department’s brand and process will lead to smoother operations and greater customer loyalty. BY JEFF COWAN

A

s I pack for the extended trip I am about to embark upon, it hits me how dependent on brands I am. My whole trip revolves around brands. Here is a partial list of the brands that will be a part of this and every trip I take: Johnson & Murphy, Hugo Boss, Tommy Bahama, Tumi luggage & brief cases, American Airlines, Avis Rental Cars, Ford Explorer, Hilton Hotels, Reebok, Subway sandwiches, Apple and Crest, just to name a few. These are the brands that I trust. These are the brands that have proven their worth. These are the brands that make me feel safe and secure and solve my problems.

Today, many road warriors will tell you that they feel travel has become much tougher. I disagree. I feel it has become easier because it is more predictable today than at any other time in the history of travel. Brands are responsible for this. Gone are the days where you had to fear food poisoning from eating in an unfamiliar town. Gone are the days where you had to worry about dirty smelly hotel rooms. Gone are the days of unpredictability. Because of the branding of restaurant chains, hotel chains and advanced technology, when you leave your home, all you need to concern yourself with is the business meeting you are leaving home to attend or the vacation you are about to enjoy – all because of brands. Brands make life easier and worry free. Brands deliver safety and security. Brands define our expectations and when they deliver, they foster our loyalty.

The automotive industry knows this. Each manufactured vehicle brand has an identity. When people begin the vehicle purchasing process they first decide what type of vehicle they want or need. They then look to the manufacturers that make that type of

16 Service Drive MAY 2015

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vehicle and select from there the brand with which they most identify or trust. The next step is to select a dealership in their area that offers the brand they seek: The “low-payment” dealership, the “biggest-selection” dealership, the “highest-volume” dealership, the “no-down-payment” dealership, etc. These too are brands and when these brands are backed with a process that supports them, it generates trust, comfort, security and a sale. We have nailed this for the most part in vehicle sales, but in service branding it is nearly non-existent. This is a problem since the world we live in today is very brand driven.

When you do not have a brand you do not have an identity. With no identity, it is impossible to have a consistent process. How can you have a process to support something that is not there? With no process, your department becomes one filled with employees who become managers of chaos. The chaos includes getting vehicles in, looked at, repairs sold, follow up and delivering the vehicle back to the customer. Your process is one of inconsistencies from person to person creating confusion, and again, chaos. Your brand is chaos.

Setting up a brand is one of the hardest, easy things you will ever do or one the easiest, hard things you will ever do.

Here is a template to help get you started. The sooner you get started, the easier it becomes to guarantee customer retention, high survey scores and maximum sales.

1.

CREATE A TAG LINE For example, let’s use the tag line, “WE GET IT DONE!” This step is important because it gives us an identity that will guide us in creating our brand.

2.

DEFINE YOUR TAG LINE What does your tag line mean? Let’s say in this example it means we are going to solve your problems. In most shops there are four common complaints: the customer did not get checked in when promised, the check-in took too long, no one called with updates and the customer did not get the vehicle back when promised. From the initial write-up through the delivery of the vehicle, let’s explain how “WE GET IT DONE” is going to solve these problems and create convenience and consistency for the customer. For example, we could say, “Our WE GET IT DONE policy means that we will get the check-in process started on time, every time. We will complete the check-in time in 15 minutes or less. We will contact you within two hours of your check-in with updates. We will deliver your vehicle back to you when we say we will – on time, every time!” A hidden benefit to this approach is that you define what good service is by taking control and setting the parameters of what great service is instead of allowing the customer to define it based on unrealistic expectations. You may even choose to back all this with a guarantee that states, “If we miss any of our promised times, your next lube and oil change is on us, free of charge.” This last step is not necessary but one that would give your promise and brand some teeth.

Years ago, McDonald’s placed a sign on their drive-through that stated, “If you were not offered a hot apple pie, call us at 800-555-5555 and your next one will be free.” There are three very simple reasons they did this: First, they defined that good service included being offered a hot apple pie and that if you were not offered a pie, someone was slacking. Second, they declared through this posting that they were very concerned with customer service and wanted everyone to be treated equally, with equally good service. If this was not your experience, they wanted to know about it. And finally, they wanted to sell a ton of hot apple pies, which they did. Part of their brand and identity was based on whether you were offered a hot apple pie or not. What they did then is what I am recommending here in a slightly more sophisticated way for the exact same reasons – and it works. Defining your tag line communicates your promise.

3.

CREATE A PROCESS TO ENSURE THAT EACH OF THE PROMISES YOU MAKE CAN BE MET EVERY TIME Create a process that is consistent from employee to employee, from dealership to dealership. A strict, consistent process guarantees that what was promised will be delivered. Processes are measureable. It will highlight your employees’ strengths and weaknesses so that you will know how to train them based on their current skill level. A process will strengthen the brand from within and guarantee success. As a matter of fact, if you do not back your brand with processes, it will collapse in short order.

Generally speaking, you have a brand right now. That brand has been created by two entities: the factory and your customers. The factory’s brand is that you offer coupons on everything. The customers’ branding of you is that you don’t deliver good service.

Neither is a brand that will inspire high survey scores, customer retention or maximum sales. If they did, you would have perfect numbers in all areas. You can change this by taking control of your business, creating a brand and supporting it with the template presented above. Create a tag line, define the tag line – how are you going to solve your customer’s problems? Create a process to support your brand.

Hold your staff accountable, make your brand visual and execute.

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“ When you do not have a brand you do not have an identity.

With no identity, it is impossible to have a consistent process.”

4.

HOLD YOUR STAFF ACCOUNTABLE There are several easy ways to accomplish this: • Tie it to their income in a big way.

• Make them deliver the guarantee – you do not buy the free oil change if they don’t deliver; they do.

• Be sure they perform the job to the minimum standards. If they do not, you will retrain them or replace them or both. Do not go soft here. It is your business, your name and your reputation. Defend it with no remorse. You can’t be a pilot in the Navy if you can’t land a plane on a ship in the middle of the ocean.

5.

MAKE ALL VISUALS UNIFORM Have uniforms designed for your employees. Have the signage, website, handouts, etc., all carry the same color scheme, look and layout.

6.

EXECUTE The best-laid plans are of no use at all if you don’t follow through and execute them. This will require discipline and commitment, but the rewards will be worth the pain.

This is an area I know will become more vital with every passing day, especially for dealers who enjoy multiple locations. Branding is one of the most important aspects of any business. State your promise and don’t break it. Your business and your success depend on it.

JEFF COWAN President of Jeff Cowan’s Pro Talk Inc. Jeff, in his 28th year of training, 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, Jeff 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.

MAY 2015 Service Drive 17

Closing the

Great Divide By uniting sales and service, you’ll keep customers from falling between the cracks and in turn, create a loyal base of satisfied buyers. BY BRENDA STANG

A

few years ago, I was on a break at a Dealer 20 group meeting. It was after the service department review and there were more than a few dealers shaking their heads with frustration. One fellow in particular commented on the performance of his service department. His pain points? He knew he was missing out on a great profit opportunity in service but frankly he didn’t know where to start. His sales and service departments seemed to operate in two totally different worlds. He didn’t know where to start closing that gap. What he did know was, that if he could fix those two items, he could build an outstanding dealership and make a lot of money.

I don’t know of too many savvy business people who would sink millions of dollars into a business that sets its departments up to conduct business at odds with each other, yet that seems to happen in so many dealerships. In many cases, sales and service relationships are full of friction and are divisive. The customer falls between the gaps and that is not a good thing.

Closing the great divide between sales and service requires developing practices and behaviors that ultimately result in a great workplace culture, increased employee retention and increased customer retention. The end result is not only aligned sales and service departments but also increased profits that are sustainable. I’ve yet to meet a dealer who is allergic to that.

Closing the gap doesn’t happen by accident, it happens by design. Here are some how-to points.

18 Service Drive MAY 2015

GREAT WORKPLACE CULTURE Take a look in the mirror first. Did you really intend to build a business where the divide between sales and service creates the gaps that your customers are falling into? Dealers who are intentional about their culture and who make a priority out of clarifying their values get the business they deserve. Here are concrete steps to building your customer focused culture.

• Culture starts at the top and it moves down through the ranks. What are your values, passion and purpose for your dealership? What does it mean to you to have a seamless business where customers are served and retained?

What does it look and feel like? Are you living it and do your employees see it? The leader always goes first and they don’t preach, they lead by example. When employees see their leader, day in and day out, talking about and living their values they will follow.

• Are you firm in your belief in the purpose and values of your dealership? Firm enough that you will hire people in alignment with them?

Firm enough that you will offload the people who are pushing your dealership out of alignment? The action plan to conquer the divide will be carried out by the right people in place in your store. Put the extra care and diligence into hiring and bring on the right people the first time.

• Share your story with your customers. The quality of vehicles is pretty well equal and everyone has great looking facilities with lots of cars, modern service and parts departments. Your prime differentiator is your people creating the great customer experience. Talk about what makes you different, the seamless process between sales and service and what that means to your customers and make sure that you do it every day.

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INCREASED EMPLOYEE RETENTION Imagine what a dealership filled with the right people looks like. These are people who fit with your culture and are working in the right jobs and working to their strengths. Now, what are some things that can be done to close the divide and keep these people with you?

• Help them understand the business model of your store. One of the industry statements is that nothing happens until a vehicle is sold. It doesn’t mean that the sales department is more important, it just means their role is to start the ball rolling. It makes them more visible, not more important. Service is equally important in that it provides the after-sale care. The care they give is important in the retention of the customer. They need to own this and be proud of it. The dealerships that get this right will rule the industry.

• Have them walk a mile in each other’s shoes.

When staff can have an understanding and appreciation for the roles in other departments they will find ways to support them in their work. Instead of looking for fault or placing blame they’ll ask more questions so they can understand and support.

• Encourage after work functions that build teams. The Gallup Organization did a massive survey on workplace satisfaction and found that the workplaces that built teams and encouraged camaraderie had high levels of employee retention. Strengthening personal relationships between departments can only work to improve communication and create cohesiveness in the business.

INCREASED CUSTOMER RETENTION While it is true that sales creates a customer, service retains the customer. The stats are in and the customer has spoken. Seventy-six percent of people will buy from the dealership at which they are happily serviced.

Dealerships that are able to seamlessly transition and

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76%

of people will buy from the dealership at which they are happily serviced.

deal with customers between its departments will be more successful at retaining its customers. Here are some simple tips to improve those transitions.

• Put a sales-to-service introduction in place so your customer knows what comes next. Don’t let them fall into the gap. The key to success with this is to have a consistent process that ensures every customer gets the same tour and information packet every time. Your goal is to make your service department highly visible and top-of-mind with your customers. A higher percentage of customers will return to service their vehicle and in turn will purchase another vehicle when the time is right for them.

• When sales staff are talking with customers, are they mentioning the service department and the great maintenance services? If they are aware of customer issues with service, are they empowered to a certain level to fix it? If it’s beyond their scope, do they know who to elevate it to? The interesting fact here is that customers

who have had problems that are appropriately addressed, turn into the most loyal customers you will have.

• Service retains customers in many ways. In many cases the service advisors will be the first one to hear when a customer is thinking of getting a new vehicle. The turnover to a sales consultant should be consistent and friendly. Everybody benefits from retaining this customer.

Sales sells another vehicle and service keeps a happy customer in their service cycle.

The biggest myth in our industry is that the great divide between sales and service cannot be closed. It’s there and just live with it. Too many dealerships accept the status quo and let it live on. This is good news for the dealerships that have figured out that they are in the people business and that the prime differentiator in their marketplace is their people and the impact they have on their customers. Close the great divide between sales and service in your store and your customers will stay with you for life.

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, Brenda worked with her management teams to develop and practice the best habits to be effective and efficient. Brenda is a Certified Trainer, Coach and Speaker with the John Maxwell Team. You can reach Brenda at LeadershipIsInfluence.com.

MAY 2015 Service Drive 19

Peter Wright Director of Fixed Operations Kendall Automotive Group

Increase Service Profits by Building the Right Team A clear commitment to its customers and team members keeps Kendall Automotive Group’s fixed operations and its dealerships ahead of the competition. BY CAROL WHITE

P

eter Wright has a lot on his plate. As the director of fixed operations for Oregon-based Kendall Automotive Group, he is responsible for the service, parts and collision center operations of 18 dealerships in Oregon, Idaho and Alaska, 780 employees and the satisfaction of the thousands of customers that come through his service lanes each year.

It’s a daunting task, but he’ll be the first to tell you that he has backup. “I have the best team,” he said. “It is truly the people that I get to work with that make us successful. And that’s a direct reflection of the organization. Our people allow us to move forward.”

And moving forward they are. In the past year alone, Kendall acquired two dealerships with six franchises, while switching DMS providers for the auto group at the same time. Today the group is made up of 18 rooftops representing 21 manufacturers, two collision centers and its own car rental company.

Wright began writing service in 1983 for a Chevy store in Eugene, Ore. After 10 years, he was promoted to service manager – a position he held for five years until being moved to the front of the store as general manager. During the course of the next 10 years, Wright managed several stores before landing back at the Chevy dealership. By 2008, the group realized that to fully capitalize on the profit potential of its rapidly growing organization, there needed to be a more clear focus on fixed operations. Being the only GM of the group with that experience made Wright the obvious man for the job.

The first order of business in his new position was to align all the Kendall shops with the company’s philosophy, and that is “the customer who is in front of you is the most important and you take care of them,” he explained. “I think what sets us apart is that our people

20 Service Drive MAY 2015

really do understand that and not only know how to do their jobs, but know why they’re doing it. They know their livelihood and the organization’s livelihood is based on the customer doing business with us.”

GROWING THEIR OWN Because each market, brand and employee base is different, each shop operates with a certain amount of autonomy, but Wright’s goal is to offer customers a consistent service experience. To do that, the group is in perpetual training mode, and has even established an apprentice/mentorship program for its technicians that pairs a new tech – who may or may not have any experience in the dealership – with a seasoned team member. Not only does this acclimate the new employees to the Kendall philosophy, but it also aids the company in “growing” its own talent. “There’s an application process, a marriage between the apprentice and mentor, to be sure it’s a good fit. We put them in a program for nine months before turning them loose.

So we’re pretty serious about what that looks like as far as growing our own.”

And it’s not just technicians who are promoted from within. Many of the company’s service advisors come from the quick lanes, sales and the centralized scheduling department – which handles appointments for all 18 stores. But whether an employee is recruited from outside or promoted from within, providing the training necessary to reach peak performance is crucial. And that’s where Wright’s team comes in. There are four regional managers who each specialize in different areas of fixed operations. Hillary Levet’s focus is on the performance and productivity of the company’s 120 service advisors, while John Heller concentrates on technician development. Mike Romig, ac-

cording to Wright is the group’s “parts guru” and Dave Gaines manages the operations for the three Lewiston, Idaho, stores.

ALL FOR ONE The “team” mindset really is to what Wright attributes the dealership’s success. Kendall Toyota of Eugene, Ore., has received the Toyota’s President Award 13 times and its Kendall Lexus of Eugene has been named an “Elite of Lexus” dealership 16 times. “We do look at fixed operations as a huge component in the success of a dealership,” he said, adding that many of the manufacturers carefully consider CSI in service operations when choosing recipients of their dealer awards. “It’s a huge part of it, but we look at it as a team effort. We all have to get there together. We look at it as we either all make it together or we don’t. We take those things pretty seriously. It’s an achievement and we’re a group that’s always trying to achieve.”

Kendall Automotive Group is careful not to let the “Us vs. Them” mentality that exists between sales and service in some dealerships creep into its organization.

“I think that starts from the top down, and if the top doesn’t understand that we all rely on one another, we’ll never get there,” he said. “What I tell my service departments is, while our retail customer is our best customer, our sales department is also a really great customer, so you have to treat the sales associates like you would a retail customer, and not put them on the back burner.

And the parts department understands that in many cases, the technician at the back counter is its best customer. I think that 100 percent of our parts and service managers understand that and have that kind of relationship with each other and with the variable side of the store.”

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STAYING AHEAD OF THE COMPETITION Competing with the independent shops is always a challenge for dealerships nationwide, but Wright believes Kendall’s stores are doing a great job in grabbing their market share. The key, he says, is making a large store seem small for the customer. “What they’re always talking about is the perceived convenience and the perceived price, so how we’ve addressed that is looking at how we operate certain activities within a big store.

How can we make the store seem smaller? An example of that would be our Toyota store in Anchorage. It’s a massive operation; it’s like a small city, but we try in everything that we do to make it small and convenient for the customer so it’s easier for them to do business with us,” he said, adding that many of the group’s dealerships offer extended weekend and evening hours. Some are even open seven days a week. “That’s a large part of aligning our operations with what our customers’ needs are. Staffing is always interesting, but demand is there, so that’s what we do.”

Looking outside of the auto industry for innovative ideas and inspiration, and examining how those processes can be applied to fixed ops, further contributes to Kendall’s success. For example, Hillary Levet draws upon her background in logistics to help streamline the group’s fixed ops processes. Modeling their operations after a manufacturing facility, where the front end of service serves as the sales force and the technicians are the producers, contributes to the “user friendliness” of its systems. And being privately owned allows Wright and his team the flexibility to implement new ideas more quickly. “When I need to make a decision or I want to move in a direction, we’re pretty agile that way. We can prototype something in a couple of stores for a period, decide if it’s working and make a decision pretty quickly.”

That agility also applies to new technology coming to market. Texting, for example, to keep customers in the loop, adds to the efficiency. “The trick is making sure we communicate everything to all of our employees.

We’re going to realize this year some of those things coming together. Since acquiring all of those stores and changing our DMS, 2015 is going to be an exciting time.

I do believe the technology and the processes and our people are starting to align, and it’s going to make the customer experience even better.”

Wright’s plate may be piled high, but knowing he has the people and the processes in place to meet and exceed his customer’s expectations, and knowing that Kendall is growing and providing its employees with an environment in which they can thrive, helps him rest easy at night. “If we’re better than we were last month or last year and we’re giving people opportunities, then I feel good about that.”

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“The trick is making sure we communicate everything to all of our employees. ”

MAY 2015 Service Drive 21

e e y o l p m E

Developing a Culture of Growth A dealership’s growth starts with the growth of its people. BY TOM KUKLA

C

ulture matters. Can you imagine what it would be like if you worked in a place where people woke up in the morning and couldn’t wait to get to work! The culture you create can make that happen. In order to grow your dealership or your dealership team, you must start by growing your people. A dealership’s growth potential is directly related to its personnel potential.

There are two important questions successful leaders ask themselves. One, am I developing my potential as a leader? And two, am I helping others develop their potential?

Charles R. Oglesby served as the CEO and president of Asbury Automotive Group from May 2007 to February 2011. In a 2012 interview on BizCulture Matters radio show podcast, Oglesby indicated that leadership is all about bringing your people up around you. He talked about his 40-plus years of being in the people business – and he “just happened to be selling cars.” Those people were the people who came in looking to buy a car and the people who served them.

What Charles Oglesby discovered was when he put the interests of his people and his customers first, they were happier. The happier they were, the more successful they – and he – became. He said, “Everyone was having success around me, and they pulled me along with it.” The culture was a focus on personal development and impacting the lives of other people.

Oglesby’s joy is seeing other people excel; and they did!

“Success is never final… Failure is never fatal …It’s courage that counts” – John Wooden Successful cultures engage their employees and they nurture them in a safe environment where mistakes are used as lessons. Successful cultures do not keep tally of every failed effort. Engaged employees operating in a safe environment are more creative and can be held to a higher standard.

All employees matter. To create, change or maintain a culture, everyone has to participate and everyone has to feel a part of something bigger.

The leader cannot do it alone. John Maxwell said in his book, The 21 Irrefutable Laws of Leadership, “To add growth, lead followers; to multiply growth, lead leaders.” The strength of any team is limited by its weakest link. Every organization has a shortage of leaders. According to a Gallup poll, 65 percent of people who leave an organization are actually leaving their manager.

22 Service Drive MAY 2015

“So much of what we call management consists in making it difficult for people to work.” – Peter Drucker SHARPENING THE SAW Many organizations suffer from something called “the clock bias.” The clock bias is explained by quoting the late Stephen Covey: “Have you ever been too busy driving to stop and get gas?” In the world of dealerships today, that sentiment is often identified like this: “We don’t have time to develop ourselves or our people.

We’re too busy selling cars.” Time is finite of course, but the average dealership sales manager works between 60 to 80 hours a week. In Covey’s book, The 7 Habits of Highly Effective People, the seventh habit is “sharpening the saw.” This is the habit that helps to develop you and

your team, and keep everyone engaged – and more effective. With increased efficiency and effectiveness, time no longer becomes a barrier to improvement.

SO WHAT IS A LEADER TO DO? So we have made the case that culture is important to engage your workforce. A company whose culture focuses on the development of its people effectively grows its people and the business. But where do you start the process? There are many things to consider of course but three things are necessary to begin implementation: Identifying potential leaders, self-assessment and developing the leaders around you.

IDENTIFY POTENTIAL LEADERS It’s always easier to dismiss people than it is to train them. No great leader ever built a reputation on firing people. Many have built a reputation on developing people. George Crane said, “There is no future in any job. The future lies in the person who holds the job.”

So, what are some of the signs that you actually stumbled upon a leader? Use the cheat sheet below to identify leaders in your organization:

• Leaders have the ability to make things happen.

• Leaders are influencers. Look at whom they influence (who follows them). Are they gaining or losing influence (are they a potential leader or a past leader)? Who influences them? Are they following the right people?

• Leaders think differently. They are big-picture thinkers and they often see the situation or solution before others do. They see more than others do.

Leaders are focused, strategic, possibility and bottom-line thinkers.

• Leaders are learners. They are constantly growing in knowledge and ability.

• Leaders are self-motivated and ask to be developed.

• Leaders are growth oriented, not goal oriented.

DEVELOP THE LEADERS AROUND YOU Developing the members of your team is an intentional act – you can’t leave it to chance or begin the process “someday.” You have to be B.A.A.D.: Believe, Ask, Assess and Develop.

Believe in them. It has to start here. In many cases, no one has ever told them that they believed they could climb to the next level.

Ask them what their career aspirations are. Don’t judge, interrupt or assume. Just listen!

Assess their leadership talents and learning style preferences. Initially, build on strengths and focus on developmental areas after you build their confidence.

Develop a plan for growth, keeping in mind their learning style preferences. Set high expectations and hold them accountable. Also provide constant feedback along the way.

Watching your people reach the next level can be the most rewarding part of your job as a leader.

“The growth and development of people is the highest calling of leadership” – Harvey Firestone

Assess Your Lea

dership Skills

Evaluate your po te assessment from ntial as an empowering leader using the follow John Maxwell’s ing 10-question yourself from a D 1 to a 10 with 1 be eveloping The Leaders Aroun d You. Rate strengths and ar ing “never” and 10 being “alway eas for further development. Yo s. u can’t teach w ” Assess your

hat you don’t kn ow.

1. Do I believe in people and feel they are an org most appreciabl anization’s e asset?  2. Do I feel that team leadership can accomplish than individual more leadership?  3. Do I look for potential leade rs and quickly them into the o assimilate rganization?  4. Do I desire to raise others abo ve my own leve leadership?  l of 5. Do I invest tim e developing pe ople who have potential? leadership 6. Do I enjoy wa tching others g et credit for w taught them?  hat I 7. Do I allow ot hers the freedo m of personalit process or do I y and have to be in co ntrol?  8. Do I give my inf luence publicly to potential le as much as poss aders ible? 9. Do I plan to h ave others tak e my present po sition?  10. Do I hand the leadership bato n off to a team truly root for mate and him or her?



TOM KUKLA Principal and Founder of Tom Kukla Credere Leadership Tom is a highly experienced Leadership coach, speaker and trainer. Prior to founding Credere Leadership, Tom spent 38 years in retail and medical sales, sales management and management and leadership development.

He developed a world-class management-training program from the ground up in the highly competitive pharmaceutical industry that served hundreds of sales and marketing colleagues. As a John Maxwell certified coach, teacher and speaker, Tom offers organizations management and leadership workshops, seminars, training and coaching in order to guide the personal and professional growth of managers of all levels and tenure.

Visit his website at LeadershipIsInfluence.com.

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MAY 2015 Service Drive 23

The Softer Side of the Service Drive Educate, enhance and engage your way to satisfied women customers

BY ANNE FLEMMING

24 Service Drive MAY 2015

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Two-thirds of the cars that come in for service, maintenance or repair are brought in by women.

A

h, the service drive: the necessary part of owning a car that, for women car owners, can be frustrating. While taking a car in for repair or periodic maintenance will likely never be the highlight of any car owner’s day, dealerships can still make their service visit a pleasant experience. Savvy dealerships can create programs that educate and engage women customers and enhance the service-drive visit.

Women in the United States are now the dominant market segment when it comes to car buying and service. Women drivers now outnumber men who drive.

Women make up more than 50 percent of car buyers, according to Nolo.com. Two-thirds of the cars that come in for service, maintenance or repair are brought in by women. Clearly, this is a market segment that deserves extra attention from dealers.

Giving extra attention to women customers in the service center is not only good customer service; it is also an economic issue. Gaining a woman’s loyal service business for the five to eight years she may own her car means more revenue for the dealership.

While 59 percent of women report that they have their car serviced at the dealership where they purchased the vehicle, 41 percent of women take their car elsewhere, according to a recent study by Women-Drivers.com. What does it take to increase service loyalty and engage and retain more of your customers?

ENGAGEMENT

The first step in obtaining and retaining a woman customer at your service center is to ensure that she has a positive experience. Here are the top-seven reasons women do not return to the original car dealer for service: • Not satisfied with last visit • Didn’t like how they were treated • Inability to get issue resolved to satisfaction • Cost of service • Location is not convenient • Hours are not convenient • Lack of concierge services

Looking at this from a marketing viewpoint, there are several ways to turn the above reasons into a return visit.

SATISFACTION: Selling a good customer experience starts the minute a woman car owner walks in the dealership’s door. If a woman comes to the originating dealership to service her car, the customer experience starts before she even buys her car. When buying a car, women rank their experience with their sales advisor

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and customer service as the number one reason for buying from a dealership. Trust and respect are the top two reasons a woman buys from a particular sales associate.

A woman’s need to be treated with respect and the ability to trust extends to the service drive. And the service drive becomes a dealership’s best way of retaining a woman’s loyalty when she is ready to buy or lease her next car.

TRUST: Today’s cars are complex, and car buyers rely on their service advisors to be transparent and truthful regarding their car needs. Women who are dealing with the responsibilities of jobs and families will not always have the time to research what service or repairs their cars need. It’s up to the dealer’s service center to provide a trustworthy and comfortable environment so that women feel confident about their car’s safety.

RESOLVING ISSUES: A woman may not always have the confidence or understanding to be able to describe a car’s problem. Listen for what she is saying and not saying. It is important for service advisors to know how to listen and take the responsibility to resolve a problem to a woman customer’s satisfaction. If a woman feels misunderstood or patronized, she will find another place to service her car.

CONVENIENCE: When it comes to having a car serviced, convenience and comfort will go a long way towards improving a woman’s satisfaction with a visit. If a woman has to stay at the service center while her car is being maintained or repaired, having a comfortable and convenient way to relax or work will be paramount.

If she has to leave her car, having convenient transportation will show that the dealership respects her time.

EDUCATION

An important part of the service process is making sure a woman understands what is happening to her car.

Today’s technology provides excellent ways to impart knowledge about needed services and repairs. ClearMechanic.com is a mobile application that allows dealerships to provide visual inspections of vehicles and

show video and photo evidence of needed repairs.

These records are stored for later use, making this tool effective for repair and for future customer loyalty.

Dealerships who leverage technology to enhance credibility will experience a long-lasting payoff. Gone are the days where a mechanic tried to explain using terms that no one else could understand. The technology is available to make service and maintenance a clearly understood process.

ENHANCEMENT

There are only two choices for women who bring their cars to the service drive: they will either wait for their car, or they will leave and pick up the car later. Both options consume a fair amount of time, and this alone can cause frustration and dissatisfaction. Dealerships can choose from several ways to make this time a more pleasant experience.

If a woman chooses to wait at the service center for her car, it is important to provide a comfortable environment. As a minimum, include:

• Comfortable seating in a quiet area without a lot of foot traffic • Wi-Fi connectivity with nearby power outlets • A safe, entertaining play area for children • Clean, comfortable restrooms • A refreshment station with quality coffee, healthy snacks and drinks

If a woman needs to leave her car at the dealership for a period of time, this is still a time-consuming process. If she needs to leave her car overnight, a courtesy loaner vehicle is the No. 1 requested concierge item by women. Don’t just leave this for the luxury brands.

The vehicle will allow a woman to take care of her other responsibilities and not have to rearrange her entire schedule.

Another way to enhance the service experience is to provide convenient service hours. According to NADA, the average service department is open 24 hours less during the week than specialty car repair chain stores.

Expanding service hours means less rearranging of a woman’s schedule, making the service drive just another task rather than an inconvenience.

Simple steps are all it takes for a dealership to be the first choice for women when it comes to service. Focusing on engaging women’s loyalty, educating them about necessary maintenance and repairs for their cars, and providing enhanced comfort when they are at your service center will show that a dealership is fully in touch with the softer side of the service drive.

ANNE FLEMING President of Women-Drivers.com Prior to her involvement in the retail automotive industry, Anne spent 20 years in brand development and strategic product development for several international consumer product companies. Her leadership training led to the founding of Women-Drivers.com, which has been featured in the Wall Street Journal, ABC News, USA Today, Working Mother, Smart Money and other national media. Visit her website at Women-drivers.com and follow her on Twitter @Womendrivers.

MAY 2015 Service Drive 25

Building Value In The Visit A

s consumers, we have choices. We choose what we want, how we are going to get it, and from where we are going to get it. Ask a room full of people where their favorite places are to shop, and you may get answers such as the Apple Store, Best Buy, Lowes or Publix. Hardly ever do they mention discount stores because it is not always about price. It is about the level of service and how they are valued as a customer.

A little known fact is that a customer will spend up to 15 percent more money to receive better service. Let’s face it, now days, we can purchase almost anything online, from a T-shirt, to a computer or even a car. People, in general do not want to buy anything; they want to be sold something. That is why, for example, if I, as a consumer, want to buy a TV, I don’t buy one in my underwear sitting on my couch from my computer. What do I do? I get dressed, go to Best Buy and I am sold a TV. Why? Because I want to be valued. The same holds true when purchasing a vehicle. So, the question still remains, why do people go into a car dealership? The answer is simple. They do not go into a dealership to buy a car; they go into a dealership to be sold a car.

By now you are asking, what does this have to do with service? The answer is simple. Value. Let me explain.

When a customer arrives in your service department,

26 Service Drive MAY 2015

Creating value in the service drive will help you earn the right to do business with your customers. BY MIKE KNAPP

they are already pre-sold. They understand that you are the experts, and you know their car. They understand that they can go almost anywhere for service, but they chose you. Remember, if you can get existing customers to return to your store just one more time a year, you have essentially doubled your business. How do you keep them coming back, earning the right to do business with them again? You guessed it. Build value in the visit. How do you do that?

It Starts With the Phone Call • Smile over the phone. The customer will know you are smiling by the way you answer the phone.

• Speak clearly, demonstrate courtesy and make the customer comfortable so they want to do business with you. For example, say, “Hello, you have reached Hometown Motors. This is Mike in the service department. How may I help you today?”

• Answer questions promptly. If you don’t know, find out.

• Get as much information as you can over the phone, especially the customer’s name. This will begin building the relationship.

• Invite them to the dealership. “I have openings at 1:00 and 1:30 today, which one is better for you?”

• Get the commitment and make the appointment.

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Remember, if you can get existing customers to return to your store just one more time a year, you have essentially doubled your business.

GREETING AND PRE WRITE-UP First, do your homework by checking the vehicle history for previous recommended or needed services.

Check the manufacturer’s website for open recalls, technical services bulletins, special services messages and warranty information. Check parts availability where applicable. Update contact information, such as email address, current phone number and address, etc.

Check for any “specials” that may be available such as manufacturer’s rebates, etc.

Next, you should develop a game plan. Secure a promised time for work that needs to be done – expect unforeseen circumstances. Secure alternate transportation for customers who may need it, such as a shuttle ride to work, loaner car, discounted rental, etc. If customer is waiting for the service, make sure work to be done will be done within a reasonable amount of “wait” time – otherwise suggest alternate transportation.

ARRIVAL Welcome them upon arrival with a smile and a handshake (yes, people still do shake hands.) Be sure to address them by name, introduce yourself and thank them for coming in. Look them in the eye when speaking to them and listen to what they have to say.

Make them feel special – let them know that their needs will be taken care of. All of these help establish trust and build the relationship.

Communicate to the customer exactly what you are going to do and why. Start by asking them to join you in the walk-around, engaging them in the process. You can accomplish this by making them a part of it – have them step on the brakes while checking brake lights, beep the horn, turn on wipers, “pop” the hood, etc.

Several things are accomplished by involving the customer. It allows the customer and the service consultant to build trust and establish a relationship.

It allows the customer and advisor to acknowledge any damage, thus protecting the dealership from unnecessary expense and repairs. It also presents selling opportunities for the advisor immediately by pointing out needed service such as tires, batteries, air filters, dent repairs, headlight restoration, etc. Present the menu and offer a multi-point vehicle inspection.

Establish commitments and stick to them. Agree

upon a time to contact the customer with an update.

Verify the best method of contact such as phone call, email or text, and follow through. If you told them you would call them at 2 p.m. with an update, call them at 2 p.m. – not about 2 or 2:30. Call them when you say. Even if you do not have an update because of unforeseen circumstances, or repairs are taking longer than expected, call them anyway and let them know. By being honest, you will further aid in establishing trust with the customer.

DELIVERY Upon completion of service, make sure all repairs were performed and addressed. If parts needed to be ordered, verify status and be ready to communicate those findings to the customer. For example, “We did not have that particular part needed for your car in stock today, so I took the liberty of trying to find one locally. Unfortunately, I could not secure one. However, I did order one from the manufacturer and will have the part overnighted (or next day) for you at no additional charge.” This sounds much better than “We had to order it.”

Have all paperwork complete including the results of the multi-point vehicle inspection. Make sure the vehicle is clean and ready for delivery (free from grease marks, fingerprints and dirty floor mats, etc.).

Contact the customer and let them know their vehicle is ready and establish a pick up time, securing alternate transportation if needed.

Once the customer arrives, promptly greet them and go over the paperwork line by line with what was done and all charges related to that repair or services. Be sure to go over everything, even if it was not a charge and under warranty – again, this builds value. Review with your customer the findings from multi-point vehicle inspection report card, and set up the next appointment.

Don’t forget to thank them for their business.

Follow up three or four days after their visit to make sure everything was OK and to answer any questions they may have. Thank them again for their business.

As simple as this seems, if we stick to the basics like communicating, telling the truth, smiling and keeping the customer informed, we have done more than our competitor. We have built trust, built a relationship and have earned the right for that customer to do business with us again. We gave them value.

MIKE KNAPP Division Manager, M5 Management Services Mike has been in the automotive business for more than 20 years, working as a service advisor, assistant service manager, customer service manager, aftermarket manager and service manager. He is a master certified service advisor, a master certified customer service manager, and a master certified service manager for multiple brands including Nissan, Toyota and Ford.

Mike is also an ASE certified service consultant, and understands and teaches that it is just as important to fix the people as it is to fix the cars. His philosophy is simple: “People don’t care how much you know, until they know how much you care.” Visit the company’s website at M5MS.com.

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MAY 2015 Service Drive 27

Turning Your downtime INTO

Dollars

Keeping your bays filled and keeping your customers from defecting to a competitor or independent shop is what Xtime is all about. BY BARRY COURTER

From left, Jim Roche, Stephanie Dang and Angel Trinh

I

n this day of smartphones and tablets, consumers expect to be able to go online to not only order a pizza, but also to track when it’s being staged, when the pie goes into the oven and when it hits the car for delivery to your house “That’s a $10 pizza,” said Xtime President Neal East, “but you buy a $50,000 car and you drop it off, but there is not any visibility in the status of the vehicle.

“As consumers, our expectations are being shaped by Amazon, Uber and even Domino’s Pizza. That technology and those companies and their technologies are shaping our experiences and the automotive industry has to catch up.” That is exactly what East says the mission of Xtime, which was started in 2004, is all about: “To bring modern technology and that superior ownership experience to the automotive consumer.”

Through its suite of cloud-based software programs – Marketing 7, Scheduling 7 and Check-In 7 – Xtime offers dealers a modern, high-tech, real-time way to better retain customers by improving the service experience.

Not getting the customer back to your dealership for

28 Service Drive MAY 2015

regular servicing can lead to the owner going somewhere else for his next car purchase. “Statistics show that dealerships often see a 50-percent defection rate after the second or third service visit,” East said.

East also points to a recent quote from General Motors, which said, “Every 1-percent increase in owner loyalty translates to a $700 million annual revenue increase. That works out to be $150,000 per dealer, and that’s real money.”

How Xtime drives results is multi-faceted. Because the software is cloud-based, it is real time and accessible from anywhere. A customer can go to his smartphone or tablet at midnight on a Sunday night, access Scheduling 7 via a dealer’s website, and then schedule a service time, check out prices, choose what they want done and get notices of recalls or other issues. The programs can also send reminders, and if the customer happens to be out of town when the notice arrives, he can request a service time at a dealer in the network closer to where he is.

One of the powerful tools that Marketing 7 offers is

the ability for the dealer to visualize the unsold shop capacity and to develop marketing strategies to combat that, with an emphasis on recovering “lost souls” – consumers who have abandoned the dealership’s service department.

Xtime Senior Vice President of Sales and Marketing Jim Roche says that dealers can use the platform to identify time periods when technicians and service bays are underutilized. “We looked across all other industries and studied best practices,” he said. “For example, we looked at Priceline and Hotels.com, and they are using something called price elasticity to change consumer behavior to consume that unused inventory.

“Since we are controlling the dealer’s inventory, we know their capacity and we can see on a day-by-day, hour-by-hour basis when those bays are underutilized.”

For example, if the software indicates that Wednesdays from 2-5 p.m. is especially slow, a digital marketing campaign can be deployed to offer special rates for getting a car serviced in that time slot, and more importantly, it can be targeted to recover “lost souls.”

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“Statistics show that dealerships often see a 50- percent defection rate after the second or third service visit.”

Jim Roche Sr. VP of Sales and Marketing

“If you can get them to return to you, you have a more loyal customer and one that is more likely to buy their next vehicle from you,” Roche said.

East said what consumers want can be broken down into three basic things: value, convenience and trust.

“What do I need, how much does it cost, and when can I get it?” he said. It is important to the customer that when those answers are given, they are convenient for the customer – not for the dealer – and they are consistent. “If the website says an oil change is $39, when the customer gets there, he should be told it is $39 and when he picks it up, it should be $39.” Communication and trust break down when even one of those three basics needs is not met, he said.

XTIME DEALERS HAVE SEEN: The company was started in 2004 in California’s Silicon Valley. It employs about 340 people and now has offices in Toronto, Minneapolis, Kansas City, Sydney and London. The first three deal primarily in production, while the overseas offices focus on sales and some production.

The home office continues to develop new products and updates to the current suite of software programs.

Xtime is owned by Cox Automotive, which bought the company in 2014 for $325 million. Xtime has more than 6,000 dealership customers and processes more than 2.5 million service appointments per month.

East said being a part of Cox is a “tremendous benefit” that has positives for both. “Cox is extremely focused on the sales side and Xtime brings balance by bringing in the fixed operations component.” Roche agrees, adding that Cox’s mission statement is to transform the way the world buys, sells and owns cars, and “Xtime is our first step into the ‘ownership’ part of the mission statement.”

East has previous experience in high-tech sales, product development and executive management. Prior to co-founding Xtime, he founded Dorado Network Systems Corp., and was president of Enterprise Engines Inc. Roche was founder and president of AutoPoint where he oversaw the development of the industry’s first multi-channel marketing platform. While senior vice president of operations at Newgen, he oversaw the creation of the automotive industry’s first web-based on-demand marketing tool, Carabunga.com.

n 9.6 percent higher service retention n 40.4 percent online conversion rate n 24 recaptured lost souls per month n 44 more repair orders per month n $163,000 in increased annual revenue from service

Each program can be purchased and used separately.

Dealers who bundle all three suites save money and will pay less than $2,000 per month. Because it is cloudbased, there is no new hardware to install or maintain.

“The software is a service and it just works,” East said.

Roche said, “The automotive service industry is in a state of very rapid innovation.”

East added that software developers at companies such as Apple have come to realize that 100 million Americans spend an hour or more a day in their cars.

“That is a platform opportunity.

“The ultimate ownership experience is that my car knows what the problem is, it tells me and what the price is to fix it and drops me off at the dealer and picks me up after work with the work done. We are not that far off from that.”

Xtime's platform identifies underutilized time slots in the service drive and helps dealers fill them.

From left, James Tucker with Trance Kelley and Ryan Mochal.

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MAY 2015 Service Drive 29

Owner Retention versus Owner Replacement By focusing on and implementing these seven processes, your fixed operations department can increase its repair order counts. BY DON REED

A

s part of the fixed operations profit potential analysis that we conduct for our dealers, we prepare a trend analysis for the customer pay operations to track sales, gross profits, margins and repair order counts. This data is then downloaded into line graphs so the dealers can see at a glance where their retail service and parts operations are improving, holding steady or declining. One of the critical performance indicators in this exercise is, of course, the RO counts.

I find the results very disturbing for far too many dealerships since the vast majority of the dealers we analyzed had a total customer-pay RO count in 2014 that was about equal to or below that of 2013. In other words, retail traffic is stagnant or declining. Why? To begin with many dealers and managers are of the opinion that if their retail traffic is holding steady year over year, they are doing a good job in owner retention, when in reality they are simply replacing the customers they are losing each month with the new customers they are selling new and used vehicles to each month.

Consider the following scenario for a dealer selling 150 new and used per month and producing 1,000 retail ROs per month, on average, for last year: n One hundred and fifty units sold per month last year produces 1,800 service customers for this year. n Assuming this dealer has a repeat customer retention rate of 33 percent, the dealer has a net increase of 1,200 new customers into the service department. n This dealer writing 1,000 CP ROs per month would have a total of 12,000 CP ROs for last year. n If this dealer retains its customers from last year then the net increase in traffic this year should be no less than 1,200 new customers for an increase of 100 per month n This year’s traffic count should now be averaging 1,100 per month, right?

Do the math in your store and compare last year’s RO performance to this year’s. Is your traffic going up, going down or stagnant?

30 Service Drive MAY 2015

Unfortunately in many stores, this dealer is still averaging about 1,000 ROs per month or less. Why? Because they are losing existing customers at about the same rate as they are adding new ones – owner replacement. Do the math in your store and compare last year’s RO performance to this year’s RO performance. Is your traffic going up, going down or stagnant?

If the answer is going down or stagnant then it is imperative that you determine why. Let’s take a look at some solutions to the possible conditions that may be causing your lack of retail customer growth:

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1

THE APPOINTMENT PROCESS FOR INCOMING CALLS

Eighty percent of your ROs starts with a phone call while only about 20 percent are from walk-ins and the Internet. Have you had any phone training lately on how to sell appointments?

2

INFORMING CUSTOMERS OF PREVENTIVE MAINTENANCE

3

CONDUCTING AN ACTIVE DELIVERY

4

SETTING THE NEXT APPOINTMENT

Many advisors are not training your customers on preventive maintenance. One hundred percent of your warranty and retail customers should be trained on the manufacturer’s maintenance requirements and recommendations for both severe and normal driving conditions. A recent AAA survey shows that more than 60 percent of customers are driving in severe conditions.

Your advisors may not be conducting an active delivery with the customer at their vehicle. Customers must be informed of the “Three Cs” for each service and repair made to build value in the cost of the RO. A thorough review of the features and benefits will go a long way toward building trust.

Advisors should be setting the next appointment for each customer at time of delivery.

We do this based on time and mileage. Ever been to a dentist?

5

PROCESSES TO HANDLE “NO SHOWS”

6

THE CRM STRATEGY

7

THE DEALER’S OR GM’S ROLES

Once your advisors know how to properly advise, your sales will increase, your CSI will go up and you will start growing owner retention versus treading water with owner replacement.

There is nothing profound in what I’ve covered thus far and for many of you reading this article you might be thinking “Nothing new here!” Well here is a news flash – I agree so why are these seven processes not being followed? I believe the answers are quite simple: Lack of commitment and lack of accountability.

Your commitment starts with defining the primary mission of a service department, which is to ensure that every customer leaves your dealership driving a safe and reliable vehicle. In addition, you must ensure that you communicate effectively with every customer what is required to keep their vehicle in a safe and reliable condition. This is easily accomplished through complete and thorough multi-point inspections and professionally prepared maintenance menus along with an advisor who can communicate the benefits of following the technicians’ recommendations, as well as those of the OEM. In other words your advisors must advise.

Once your advisors know how to properly advise, your sales will increase, your CSI will go up and you will start growing owner retention versus treading water with owner replacement.

Once you get this commitment in place you now must be willing to make this your company policy and as such it is not optional. Policy is policy and should not be ignored by anyone. Those who do must be held accountable for their unfortunate decision to ignore the dealer’s

policy. For some strange reason many of you reading this have a difficult time with holding your fixed operations team accountable for their performance or lack thereof in the same way you do for your sales team. For example, if you won’t tolerate a salesperson selling four cars a month then why would you tolerate an advisor selling an hour per RO? If your sales manager can only close 10 percent of the ups, I’m guessing you hope he goes to work for your competitor across town after you fire him. Okay, so how about a service director who averages 60-percent one-item ROs month after month?

Most likely he isn’t going anywhere any time soon.

Remember this very simple premise when you’re trying to make a decision with your heart as opposed to your brain regarding an underachieving employee: If an employee cannot perform at the level of a top performer, there are only two reasons for that. One, they don’t know how to or, two, they don’t want to. If they don’t know how to we can cure that with professional training but if they just don’t want to then wouldn’t you agree they have made the decision to “de-hire” themselves?

It’s time for you to get committed and start holding everyone accountable for their individual performance to get on track for making this your best ever in fixed operations.

All “no shows” are not being called for a new appointment. People forget and/or get busy with other commitments but they still need the service or repair. Again, have you had any phone training lately?

Your CRM strategy, or lack thereof, might not be working. Why do dealers consistently spend 25 to 30 percent of their front-end gross in advertising to sell a car to a stranger but won’t spend 10 percent of back-end gross to retain a customer who already owns their product and will eventually buy another one?

The dealer or GM might lack the appreciation of and/or understanding of how to lead and build their fixed operations to work toward achieving 100-percent fixed absorption.

If working toward achieving 100-percent fixed absorption is not on your radar then the next recession might be your last.

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DON REED CEO 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 United Kingdom to increase profits in their fixed operations. Don was rated a Top 10 Speaker at the NADA convention for four consecutive years. Visit the company’s website at DealerProTraining.com.

MAY 2015 Service Drive 31

Why Are You Hiding

Your Most Valuable Asset ?

Not giving your service department equal playing time on your website could mean you are leaving money on the table.

BY GLENN PASCH

32 Service Drive MAY 2015

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Fact:

According to NADA, fixed operations is a $310 billion business. Do I have your attention? Yet dealerships account for only 27 percent of this market.

Why so low? Who has the other 73 percent? Again, is your interest peaked?

My findings were that, on average, dealers give as little as 5 percent to possibly 15 percent of their marketing budgets to the service and parts departments.

Fact: Fixed operations account for an average of

54 percent of dealerships net profits but only have – wait for it – 2 percent of the visibility on the average dealership website. Two percent?

I know this seems a bit crazy that something that generates half of the profits is hidden in the back like your crazy uncle. Is it because fixed operations is not a sexy thing? Is it because it is not flashy? They don’t have salespeople in fancy suits meeting and greeting the customers? I think all of the above.

Let’s take the reverse view for a moment. If you know that you have a very profitable or popular model in your fleet of cars, would you hide it deep in your site? Would it take four to five clicks to find it? And when you got to the page would there just be a generic photo with a form saying, “Contact us”?

Of course not, yet that is what is happening every single day with dealership websites. Now if we agree that fixed operations is given such a small percentage of real estate on the main website, could we also assume that this small percentage would correlate to the marketing budget for the dealership?

I asked a few of my clients for some real numbers to back up my hypothesis. My findings were that, on average, dealers give as little as 5 percent to possibly 15 percent of their marketing budgets to the service and parts departments.

To many, this could be seen as a great return on their investments. Market a little and make a lot of money.

So why change anything? Yet, on the flip side of that argument, spending 85 to 95 percent of your marketing budget to get 50 percent revenue on car sales seems not so smart.

My point is that with some adjustment to marketing, service and parts could generate even more revenue. I think two factors have created this situation.

The independent chains, Jiffy Lube, Meineke, Pep Boys, etc., have taken advantage of this lack of effort from dealerships. They have played up the image that their work is cheaper or that dealerships will take advantage of customers. They claim that they are “quicker” so in turn a better value. All of these claims are just perceptions in a customer’s mind and, marketed properly by the dealer, can be overcome.

Dealers do not know how to expand their marketing efforts outside of offline marketing – in the form of mailers with specials, for example – to increase this revenue generator. Their “digital” marketing efforts may only be a newsletter with a service coupon or an email blast. However, there is no consistent marketing through the digital world for parts or service.

I have been told by some dealers who have woken up to this problem that they used to focus mostly on sales numbers, versus retention or repeat customers through service. Once they understood that the treasure they had in their service drive for pre-owned cars and also that great service meant retaining clients long term, they changed their thinking.

WHAT SHOULD A DEALER DO IN TERMS OF MARKETING SERVICES ONLINE? First, dealers need to decide that they are going to commit to marketing fixed operations. I know that sounds easy, but in many dealership cultures I have encountered, service is considered second fiddle in the

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pecking order of things. Change takes effort and just talking about what should happen without commitment is a waste of time.

So once we have commitment, dealers need to review their current digital marketing efforts and decide where they could expand.

PP

Do they have optimized landing pages for each of the eight to 10 basic services they handle with video explaining the service?

PP

Do they have specific SEM campaigns or remarketing efforts to highlight service? Google has shown how branded service keywords have a huge opportunity of which dealers can take advantage.

PP

Do they have a, “Why Service With Us,” video on their service page or confirmation page?

PP

Do they have a great, “Thank You,” page for customers who book service that pops up and offers other options for them to view while they are still on the site?

PP

Do they understand reports from their SEO and SEM provider in layman’s terms? Unless they do, how can a dealer see if the vendor is driving relevant traffic to these pages in order to convert leads?

All of these strategies need to have the same attention as your vehicles do. Increasing your marketing spend with a targeted campaign will generate interest. That being said, just as you would increase your floor staff or BDC staff to handle the increase in leads, so must you adapt in the service lanes.

You may have to improve your scheduling system, or increase the number of advisors. You may have to increase shifts in the service bays to maximize their occupancy. I have seen dealers open up service shifts from 6 p.m. to midnight to maximize their service bays.

Now all of this will not be possible without a real desire to change and many may have to admit that their dealership leaders are not fully versed in this type of marketing. That is perfectly fine. Reaching out for digital marketing educational programs is the first step to unlock the entrepreneurial efforts to grow their businesses and hold vendors accountable to performance.

If dealerships continue to do what they have always done in terms of marketing fixed operations, they will never keep their customers from going to the independents.

Moving forward, dealerships must realize that underfunding the marketing for service and parts is taking away revenue from the bottom line. It is time to take back some of the 73-percent market share dealers are leaving on the table. It is time to bring service marketing out of the shadows and have it take its rightful seat at the marketing table.

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

MAY 2015 Service Drive 33

So You Want to Own the Phone?

Be CRISP With 92 percent of all customer interaction happening by phone, service managers need to make good phone skills a priority for their employees.

BY MIKE HAEG

Y

our service center is losing $43,180 a month.

Wait. What? Rewind.

Nope. Sorry, but it’s true. Your service center is losing $43,180 a month, and it’s all because of the phone.

Bottom line is, the phone is important. We all know this – how else would you get people into your shop if they don’t call to set up an appointment? Ninety-two percent of customer interaction happens over the phone. That’s a huge percentage to screw up because of poor phone skills.

If you talk to the sales team, you may have seen the impact phone processes make on their bottom line. You want to get your service team to that same level, but you just can’t figure out what needs to change!

“What can I do about this?” you say. “The phone owns me!”

The solution is a lot simpler than you think: be CRISP! The CRISP technique is made up of four processes combined to take you through your phone calls and book more appointments. Service departments that are CRISP see more customers walking through the door who continue to come back.

Let’s break it down.

Connect

Connect the customer quickly to a friendly agent who is qualified to help. This means when your customer calls in, they need to be routed to the person they’re looking for – quickly. If that particular person isn’t available, connect the caller to someone else who can answer their question.

A good way to avoid unconnected calls is to practice warm transfers. When a customer calls in for a specific person, have your receptionist check to make sure that service technician or advisor is there to handle the call before it’s transferred. If the technician isn’t there, the receptionist can inform the customer and immediately transfer to someone else.

But remember that connecting these calls starts by picking up the phone! Twenty percent of calls go unanswered on average. Simply making the ringing phone a priority will up your numbers substantially.

A lot of calls are missed simply because your team isn’t around.

Avoid this mistake by making sure someone is close to the phone at all times. This means keeping someone by the front even during lunchtime. If you’ve got more than one receptionist, stagger their break times so someone is always at the phone. If you’ve got only one, have someone fill in for him or her throughout the break.

34 Service Drive MAY 2015

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Request and Invite

The next two letters go hand-in-hand: request the appointment and invite the caller in for an appointment. Once your caller reaches the right person, keep in mind that requesting the appointment is mandatory. No excuses.

First, listen to the customer’s needs fully. After they’re finished talking, ask them to come to the service drive for a visit. Offer two dates and two times so the customer has options. Customers are more likely to deny open invites.

For example, “We’ve got some availability today at 3:15 or 4:45. Which works best for you?” Asking this way makes the customer think he or she has already agreed to the appointment and makes their decision easier. If neither time works, let them offer up an alternative.

Set

Set the appointment for a firm date and time with clear expectations. Don’t accept a “soft acceptance,” which is when the customer agrees to visit at a vague time. Write it down immediately and confirm, then ask the customer if they have their calendar or a piece of paper handy to write down the appointment, as well. This helps build the commitment in their minds.

What we’re going for are “firm acceptances,” or strictly-scheduled appointments. Customers often flake on soft appointments and flakey customers mean nothing to the bottom line.

After you’ve booked a time, give your customers some information on what to do on their appointment day. Go into detail about what they should do when they arrive. Tell them where you’re located,

where to park, where the service department is and how to get a hold of you. Follow up with an email with this information to prevent any forgetfulness or miscommunication on either side.

Pursue

Sometimes customers just don’t commit, or you end up forgetting a step in the process. That’s OK; we’re all human! If that happens and a potential appointment isn’t booked, the last step in CRISP will save you.

Pursue the missed opportunities that didn’t convert the first time. Pull up that customer’s contact information and give them a call back as soon as possible.

Start off slow with just a few calls. Have one person call back a few of those soft appointments every day and try for a commitment. After they’ve gotten the hang of it, spread the practice throughout your service department and have your technicians start pursuing missed calls, denied requests and calls not related to appointments.

Make sure you understand what the customer was looking for and take that opportunity to request the appointment. This is even possible for customers

calling about something as simple as hours of operation or prices. If they’re inquiring, they’re looking at making a visit!

Outbound calls to already-engaged customers are the best way to take advantage of some easy opportunities. You already spent the money driving these leads. The customers have already called your service center – these people reached out to you! Don’t make it hard for interested customers to give you their money.

Be CRISP or help out the competition Every one of these steps is easy to implement right away. You’ll need some practice to truly make every call CRISP, but a powerful phone call is a worthy investment. If you’re not working on maximizing every part of your customer interactions, you’re helping out the competition. You better believe that those other service centers will be happy to talk with those customers whose calls you missed or didn’t request the appointment. Don’t kick the ball into your own goal.

Encourage a CRISP technique now.

MIKE HAEG Director of Business Development for Century Interactive As director of business development, Mike is dedicated to helping dealerships “Own the Phone.” He is passionate about fusing technology, people and process to improve the bottom line. Outside the office, don’t be surprised to see Mike at a local live music venue, jotting down his crazy ideas or knee deep in a good book. Visit the website at CenturyInteractive.com

Jeff Cowan is on CBT Automotive Network!

WITH JEFF COWAN a member of the

Automotive Network

8 THE

4. ALWAYS HAVE A PEN Once I was closing a deal – I mean it was sealed, a done deal – and when I reached for my pen in my jacket it wasn’t there. The prospect took this cue as proof that he shouldn’t sign – and didn’t. I was devastated and I now refuse to go anywhere without my sword in hand.

All contracts require signatures and that requires ink.

Have a pen available at all times, and in fact you should always have a back-up pen, too.

5. SHOW, DON’T TELL

RULES OF

SALES IN SERVICE

Applying these common sales techniques in the service drive will keep your bays filled and technicians busy. BY GRANT CARDONE

A

ll professionals rely on sales. Whether you’re a car salesman or service advisor, you can’t get along in life without the ability to communicate, persuade, negotiate and close. Combine that with the fact that new cars typically gross 5 percent but the service department gross is 70 percent, and you’ll see how massive the service department revenue potential is!

Like any game, there are rules to selling, especially when it comes to closing a sale. To ensure success, whatever job title you carry, here are eight of my best rules for sealing the deal.

1. SIT DOWN Always be seated when negotiating and closing. Even seasoned professionals violate this rule frequently. The saying goes, “Present the product, idea, or service on your feet; but always negotiate in your seat.” And if your prospect stands up, do not get up with them. Remaining seated suggests that you are not done, you are not reacting and that you are confident in the proposal.

Going from seated to standing suggests that something has changed – out of your control – and allows your prospect to exit and end the negotiations.

2. COMMUNICATE CLEARLY The simple fact is that the better you communicate, the more people will agree with you. And the more you can get others to agree with you, the more you can have your way in life. Plus no one trusts a person who cannot

36 Service Drive MAY 2015

communicate clearly and confidently. That’s why I practiced every day using recorders for video for years and then played them back to ensure communication was coming across as I intended.

3. MAKE AND MAINTAIN EYE CONTACT It is very important to make and maintain eye contact with your prospect. Avoid wandering eyes, looking around the prospect, over their shoulder – instead you must look them directly in the eye. Sadly most of the population on this planet does not make eye contact today. Walk into a coffee shop and say “hello,” then watch as the people look away.

This is a discipline instilled only through practice and a proven way to perfect it is by recording yourself.

If you want to be believed, it is vital to make eye contact with your prospect. It suggests interest in them and confidence in yourself, your products, your services and whatever you are proposing.

People believe what they see, not what they hear. Two things you need to have on you for every proposal, besides your pen, are a contract and a writing pad. You must be writing everything down – every promise, every offer and any point of value included must be written down so the buyer sees what they get when they make a decision with you.

To test the effectiveness of this, find an outlandish article on the Internet from a reputable source. Go and tell that story to someone and see if they believe you. When they disagree or question it, show them the article, and see how their perception changes. The article, the word, makes it more believable. Use this rule to maximize your closing and create massive success in your life.

6. CONFIDENCE BREEDS SUCCESS Confidence moves people more than great products do. There will always be a market for products that make people feel good, but a person who can make the prospect feel good can sell almost anything! A salesperson that combines a great attitude with a great product makes an unstoppable force.

7. ASK UNTIL YOU CLOSE Most sales people never ask for the close once, much less the five to six times that is necessary to overcome the objections and delays. This is why you must figure out how to consistently circle back and reposition proposals after being told “no,” which will ultimately make you a great closer. The aim is not to be rude, but be persistent as a sign of success and prosperity. Each time I ask for a “yes” after being told “no,” I take a different approach. It doesn’t mean I didn’t listen to the objection; it means I am more sold on my product, idea and service than I am on the other’s view. See number 6.

8. TREAT PROSPECTS AS BUYERS – ALWAYS Whether it’s no money, no budget, not the decision maker, always treat the prospect like they are a buyer.

I always prospect during a proposal for signs that they have bought in the past. The watch they wear, their suit, their jewelry, the car they drove in, the house they live in and more. All of these are evidence that they have the ability and history of closing. I always tell myself, “Every prospect is a buyer. Treat them as a buyer and they will turn into a buyer.” Be great, nothing else pays – much.

GRANT CARDONE Entrepreneur and New York Times best-selling author Grant, a national speaker and motivator, is a respected, highly-regarded master salesperson whose passion is to teach people how to sell themselves, their products and services regardless of economic climate. His books, audio packages and seminars provide people of all professional backgrounds with the practical tools necessary to achieve high levels of success. Follow him on Twitter @grantcardone.

ServiceDriveToday.com

Texoma Hyundai Leads In SERVICE CUSTOMER SATISFACTION

T

exoma Hyundai in Sherman, Texas, ranked No. 1 in service customer satisfaction in the United States for 2014, besting more than 820 Hyundai dealerships. This marks the second year in a row that Texoma Hyundai was the national champion.

Awarded to Texoma Hyundai for meeting and exceeding customer expectations, Hyundai’s distinction for customer satisfaction is given to the dealership that performs the best in the Hyundai Service Index (HSI) study.

Out of 1,000 points Texoma Hyundai scored:

Other Hyundai dealerships receiving regional honors in 2014 include Ray Skillman Southside Hyundai of Indiana, Central Region; Lancaster Hyundai of Pennsylvania, Eastern Region; James Wood Hyundai of Texas, South Central Region; Bob Mayberry Hyundai of North Carolina, Southern Region; and Winn Hyundai of Santa Maria, California; Western Region.

Overall Hyundai Service Index..... 980 Service Initiation................................ 984 Service Advisor................................... 989 Service Facility.................................... 971 Vehicle Pickup..................................... 983 Service Quality ................................... 974 Pictured are, from left, Rick Dorn, senior group manager; Jason Brewer, service manager; Kenny Hiner, service advisor; Mark Daniels, general manager; Clint Davis, service advisor; David Ewing, district parts and service manager; Barbara Lenderman, senior manager; Traci Wright, parts consultant; and Chuck Salinas, parts manager.

What’s happening in your service department? Let us know so we can share the good news with our readers!

Send your photos and submissions to Newsroom@ServiceDriveToday.com.

Askthe

Pros:

CAN YOU GIVE SOME EXAMPLES OF HOW SERVICE ADVISORS CAN CONNECT WITH THEIR CUSTOMERS IN ORDER TO BUILD A LONG-TERM BUSINESS RELATIONSHIP? – CAM P., JACKSON, MISS. CHRIS COLLINS, founder of Chris

Collins Inc.: Great question and

D

o 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.

WHAT IS THE PRIMARY MISSION OF A DEALERSHIP’S PARTS DEPARTMENT? – JIM F., GRAND RAPIDS, MICH.

Don Reed, CEO DealerPro Training: The

primary mission of a parts department is to support the technicians.

That simply means delivering a part to the technicians in the shortest possible amount of time. Ideally you want the technicians to get the parts they need when they ask for them at least 90 percent of the time. If that part is not in stock, then what is your process for getting that part as quickly as possible. In most cases a daily stock order will get that part delivered the following day. If not, your choices are buy aftermarket or buy from another franchised dealer.

Parts’ fill rate is crucial to attaining a high level of shop productivity, which should be no less than 120 percent. Obviously technicians waste time waiting on parts, putting the vehicle back together to get it off their rack and then bringing it back on the rack the fol-

lowing day to disassemble again when he only gets paid on flat-rate hours to do that once versus twice.

Another opportunity to increase shop productivity is to have the parts personnel deliver the parts to the technician at their bay. I am forever amazed at how many parts departments will load up their truck and drive 10 or 15 miles to deliver a wholesale part at a 12to 14-percent profit margin but refuse to take the time to walk 50 feet to deliver a part to a technician who produces a 40- to 45-percent profit margin.

Lastly, by increasing the speed of parts delivery to your technicians you will also reduce your repair cycle times, increase technician productivity, improve CSI and build owner retention. The key word in my definition above is “primary,” which simply means most important and, of course, leads to providing your customers with a higher level of service with each visit to your service department.

WHAT SHOULD I TELL A CUSTOMER WHO SAYS THEY WANT TO GET THE REPAIRS DONE BUT THEY JUST CAN’T AFFORD IT AT THIS TIME? – JEREMY R., SANTA MONICA, CALIF. JEFF COWAN, President of Jeff Cowan’s Pro Talk:

Most of the time when a customer says this they are testing you to see how much you believe what you are recommending really needs to be done.

Discounting or pulling things from the list answers their question. Instead, stay firm and direct, and many times they will find the money. One of many options is, “I understand Mr. Customer.

When things are tight my first reaction is to look for things to cut back on or put off until absolutely necessary. But one thing I would never cut back on or put off is the care and maintenance of my vehicle. It’s what gets me to work and makes everything else possible. You know what I mean?” They answer yes, start typing.

38 Service Drive MAY 2015

one that’s very important. I want to start this answer with another question – the old “answer a question with a question.” Stay with me it will pay off. What’s an advisors job?

Some will say they are salespeople. Sorry but that’s old news and kind of cliché.

Often customers already have a negative view of us because of that exact thinking and it doesn’t help retention in anyway. The real key to a deeper connection with our customers is getting past the commodity (car), and the system we have forced customers into. Lets be honest, the customer has many options to service their car. The goal in every situation is to make a friend.

The definition of a friend: A person whom one knows and with whom one has a bond of mutual affection, typically exclusive of sexual or family relations. Lets talk about what a friend is. Let’s say you and I become friends and we make plans for a BBQ at my house. You arrive at my house on time but knock on the door and no one answers. You hear activity in the house and can see through the side window people walking around inside. It starts to feel like you are being ignored. After what feels like a lifetime I open the door and say, “What brings you in today?“ Better yet even though we made plans, I ask you in front of your wife. “Did you have an appointment?”

Then after the awkward introduction you come in and before anything I start telling you about a great opportunity I have for you selling Amway, Explaining how much money you can make and what a great life you could have if you just got all your family and friends to order all of their toilet paper and toothpaste through you.

It gets worse from there and I doubt you would ever want to come back or consider me much of a friend. That’s exactly what we do everyday in service drives. Customers pull in and we treat them like ups or a number, not like friends.

A real friend would run to the door to greet you.

Hug your wife and say hello. Ask about how work is going, did you close that big deal you have been working on at work? Ask about your kids and show a genuine interest in your life.

That’s what we need to do in the service drive.

An advisors job is to collect customers. Selling is the easiest part.

ServiceDriveToday.com

SHOULD MY SERVICE ADVISORS BE QUOTING LABOR RATES WHEN ASKED, AND HOW SHOULD THEY RESPOND TO THIS QUESTION? – DON C., WEST PALM BEACH, FLA. MIKE KNAPP, Division Manager, M5 Management Services:

I am often asked this question. Before we get into how the questions should be answered, let’s ask a question of our own. Why is the customer asking?

Chances are they are either being coached or shopping you. Somebody is telling the customer that the dealer labor rate is “so expensive” and the local garage has a lower rate. However, what they are not telling you is, yes their hourly rate may be less expensive, but the total job is probably comparably priced. In other words, when you are shopping for a house, do you ask how much are the walls, how much is the roof, how much is the paint etc.? Of course not. You are given a price of the house. So, with that being said, Don, your advisors should be quoting out-the-door prices for the total job, parts, labor taxes, fees, etc.

Try to avoid quoting parts and labor prices separately and get in the habit of quoting total job prices.

However, if a customer is adamant about knowing what your labor is, you may want to try this approach: “We don’t have a labor rate – all of our operations are pre-priced based on the competitive nature of the operation.”

Allow the advisors to become salesmen instead of order takers. They should learn how to extract information from the customer and ask the right questions. By using this strategy, the customer feels they are getting more value. They come to us because we are the experts. Knowing what to ask is just as crucial of knowing how to answer.

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