Article

The "Dirty" Word In Your Dealership: Are You Using It?

August 2006, Auto Dealer Today - WebXclusive

by Harlene Doane - Also by this author

Have you heard the “dirty” word in your dealership? It’s a word everyone knows. Some dealers use it to their advantage. Others do their best to avoid it. Those that use it properly see an increase in productivity, volume and gross profits, or a reduction in employee turnover, legal expense or overall costs – or even some of each. Those that avoid it tend to have a revolving door, legal problems and never meet their full potential. Have you figured out what the word is yet?

Training

“Many dealerships think training is expensive, and it may be –but what they fail to realize is that it is more expensive not to train, through lack of productivity, lost opportunity and the increasing expense of new hires,” says Brad Lea, founder of Lightspeed VT, a dealership training company.

What does training really mean? Does it mean that you as the dealer have to personally conduct it? No, of course not, but without the support of the executive level, any training system will fail. Every aspect of the dealership, success or failure, traces back to the dealer. Before you start writing your letters to the editor give me time to explain further. Ultimately the dealer principal has the power to change anything in the dealership; no other person in your dealership has that much power.

Every department, every system, every process in the dealership requires a commitment from the dealer to succeed. The dealer must be committed; without his commitment his management staff will not be committed nor will their staff. How effective is any program in the dealership without that commitment level?

Commitment to training is when the dealer sees the need for training and is motivated to do more than order an employee on staff to handle it. “If training isn’t a priority from the top (dealer) down, we don’t see success in Internet Departments,” said Dean Evans, Vice President of Marketing of Dealix Corporation, “and it applies the same to every aspect of the dealership.”

Evaluating Your Dealership

To evaluate what a dealership spends on training its employees, let’s start with a basic exercise. Look at the income statement and determine the average amount spent monthly on training expenses.

Next, subtract from that amount any monies spent on Twenty Group memberships and meetings involving the dealer principal. If that amount isn’t readily available, have the office manager separate it out. What is left over?

Finally, divide that remainder by the total number of employees. That often will give you a number that amounts to little more than the cost of a couple of fast food lunches per employee per month.

It gets worse when you subtract out any monies spent on training techs (somehow that is always rationalized by saying the manufacturer requires it), and, when you subtract out the pizzas or other meals catered in while the meetings are being conducted. Yet somehow, skilled business people and managers rationalize this practice.

Parents realize how expensive education for their children can be. Why do we educate them? So that they can succeed in life – to be the best at what they want to be! Dealerships have employees who have chosen to work in that business, wanting the same thing…to be the best they can be. So why is so little invested in them?

Gary Duncan of Duncan Automotive Network in Lynchburg, Va. said, “There is no total solution in the auto industry for training; there are many training companies, but I have yet to meet one that I like for full dealership training.” The reason why Duncan and many dealers feel this way is that the biggest challenge for the outside trainer is that every dealership is different. Every dealer has specific needs and requirements which may vary from state to state due to laws or from store to store, simply due to the dynamics of their personnel. So if there is no one training solution for every department in every store where do you start?

You Need a Plan

First of all you need a plan for your training. Every employee should be a part of your training plan. No job is so insignificant that it should be overlooked in training. Group your employees by department to help you evaluate group training goals. For example: vehicle sales staff, sales managers, Special Finance team, service managers and advisors, clerical, Internet staff, BDC staff, technicians, reconditioning, etc.

Identify Deficiencies

Once you have that list take it to the next level by identifying what deficiencies you have in your store. Is your Special Finance Department getting deals funded in a timely manner? Does your F&I department seem to have more than their share of complaints? How well does your title work flow through your DMV? How much up-selling are your service advisors doing? Once you can identify some of the areas of deficiency you can then start putting together a training plan to eliminate those deficiencies.

Who Will Conduct the Training?

The next item is to determine who will do the training. You, someone already on staff, hire a new employee as a corporate trainer or use an outside trainer?

Every dealer interviewed believed that it was important to the overall success of their training program for their management team to be involved in the training process. “There are just some things that are unique to your store or your operation. Without your management team’s involvement the rest of your staff will never learn them,” said Duncan.

Earnhardt Dodge, like Duncan, believes that the dealership employees must be involved in the training, so much so that Kevin and Terry Murphy, Co-Directors of Special Finance, do all of the training for their Special Finance department. “We train daily, and we hold quarterly classroom training for our employees. We feel that every sale is a sales training opportunity,” said Kevin. Kevin and Terry Murphy not only conduct all of their training, they developed the training, which took over two years.. When asked how they stay on top of their training, Kevin Murphy replied, “Read everything you can, not just the industry-related material, but any training, educational or motivational material.”

“It takes constant training reinforcement to get your staff to the level you need them to be at to stand out in your market,” says John Leidy of Leidy Chevrolet-Ford in Mifflintown, Pa. Recently Leidy brought in an outside consultant from Leedom and Associates for Special Finance Training. “If there is a major shift in an area of the dealership or if I just feel we need someone with more experience to get us to the next level, we bring one in. It is always money well spent,” he said.

John has a great sales management team that follows the Verde system for training. “I believe every dealer must be utilizing some training program to be effective. Verde’s system and style works for us. Our staff does one-on-one training on a daily basis sale-by-sale. We also hold regular group sales meetings twice per week.”

Being involved doesn’t however necessitate being the trainer. As an example, a dealer decides that the sales staff needs basic F&I training. Does that mean the F&I manager should be appointed the trainer? Not necessarily. Just because that person is successful in the F&I position doesn’t make him a good trainer, nor does it mean that he is equipped to train. Don’t fall in this trap.

Being involved may simply mean developing a training plan which allows the F&I manager to offer input on specific areas that he sees as deficiencies in the sales process. Maybe the sales staff doesn’t consistently mention the availability of extended warranties early during the sales process, and, the F&I manager feels that doing so earlier in the sales process would improve your penetration rate. If this were the case you would want to make sure it is covered in your training program.

At this point we know that dealership personnel must be involved even if they don’t do the training directly. So who will actually do the training? Do you hire a full time trainer? Can you cost justify a person full time in this position? Any person you hire would need to have extensive experience in the dealership environment to be able to train all departments. Although hiring a trainer is an option, it is big shoes to fill and not very practical for the majority of the dealerships in operation today.

A common solution utilized is a blended approach to the “who will do the training?” dilemma. Dealers are utilizing outside consultants and trainers who work with an internal trainer or internal training program. Other dealers are turning to the new niche of high end technology to assist with their internal training program.

Jim Estes, President, TAG Automotive, Fresno, Ca. utilizes sales trainer George Dans to train his sales staff (including his BDC personnel) every 60 days offsite. “George creates so much excitement and energy in our sales staff. He even holds a separate session with our team leaders to help them prepare for the in house training that they lead twice per week between George’s visits. I love the personal attention George seems to give my store,” said Estes.

Estes also believes in training the entire staff and in utilizing every available resource. “Universal Underwriters training is required for anyone in finance, DMV training workshops for clerical staff, service techs can take ASE or community college training. NADA has regional training at reasonable rates and as advertising compliance in California is a serious matter, we use Manning, Leaver, Bruder & Berberich for advertising compliance education.”

What about using technology to leverage training options? Gary Duncan believes that technology can help his dealership reach their training goals. Gary recently began using LightSpeed Virtual Trainer. LightSpeed Virtual Trainer is an interactive web based system that helps you hire, train and track the entire dealership. Interactive training is one-on-one video training - eliminating boring handouts - with interactive courses that make training effective. With more than 26 courses online you can enroll all of your employees. Each course has a test and you can easily view each employee’s progress.

“The flexibility to tailor a training program to each individual employee's needs is tremendous. It’s available 24/7 and the trainer is always prepared. An employee who needs constant reinforcement can review each course as often as necessary and the training is consistent, decreasing the amount of time your management staff has to be involved in repetitive training,” continued Duncan. “Additionally, my tailored training content could be put in the LightSpeed VT system. Lea, founder of LightSpeed states, “LightSpeed will strongly support and reinforce what your trainers are teaching. Think of the possibilities. Your top performer could be used to create a best practices course that could then be used over and over with every sales person as often as needed, without losing the revenue generated by that top performer.”

Decision Time

Once you choose who will do the training and hold them accountable for that training, make the decision and implement a training regimen. Then, more importantly, make the commitment to stick with it. Changes and benefits do not come overnight, but they will occur.

The Cost of Training

For those of you who are wondering how to pay for this training in today’s fight for a stronger bottom line, there is good news. Dealers claim the training will pay for itself.

“My time spent with dissatisfied customers disappeared when we trained our staff,” said Jim Estes. “In addition our referral business went up and most importantly our business does not experience the hills and valleys that we used to have in sales. George Dans is teaching our staff to follow-up and that has improved our consistency. Our employee turnover is lower as well.”

For Duncan, using an outside training consultant in his fixed operations departments created an additional $90,000 gross profit in 12 months. You must keep your training in place long enough to see the benefits and those benefits may be different for each dealership, because each dealership has different deficiencies in the beginning.

“Training is a plus, plus incentive,” said John Leidy. “By just training our F&I department through Universal Underwriters our gross increased by $300 per unit. You have to be measuring to see the effects of your training efforts. Your F&I department might think they are doing a great job at $250 per unit, but if you aren’t using some industry standards or benchmarks to help you measure your performance you won’t improve. Training then can help you meet or exceed those standards.”

“Additionally, overall communication in our dealership improved with training,” said Leidy. “When you are constantly training you have fewer items that become big problems because they are brought to the table sooner.”

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

On-the-Point

Jim Ziegler
Objects in the Rearview Mirror

By Jim Ziegler
The past is right behind us and the future is coming fast. The Alpha Dawg plots a course for your store’s success and shares advice for Elon Musk, Johan de Nysschen, and pre-owned managers.

The Big Talent Drain

By Jim Ziegler
The Alpha Dawg tackles the shortage of talent in the managerial ranks and reflects on Amazon’s rumored foray into vehicle sales, the imminent used-car correction, Hyundai’s plan for the Genesis brand, and the untimely passing of Tammie LeBleu.

A Faster Horse

By Jim Ziegler

Strangers in the Mall

By Jim Ziegler

Opening Observations

Over the Curb