December 2011, Auto Dealer Today - WebXclusive
Recently, I received a call from a dealer who had attended my workshop at the 2011 NADA Convention, and he asked if I would answer some questions for him regarding his service department. I said, “Sure,” so we had a good conversation about what he needed to do in order to improve his service and parts sales performance. During the course of that conversation, he stated he had written down one of my quotes from the workshop and had used it during his previous day’s managers’ meeting. I asked him what quote he was referring to and he stated: “You are not running a democracy.”
The point I was making is that, as a dealer, you are the ultimate decision maker. As a dealer, do you need to take a vote every time you want to make a change in policy, process or personnel? Do you really need anyone’s vote other than your own? Assuming you own the store, aren’t you the one who’s made the investment in property, equipment, inventory and personnel? If so, then don’t you deserve a good return on that investment? If you answered “Yes,” then why do you think you need permission from any employee to make a change in anything?
Let’s assume your service department’s productivity is running at 120 percent. Great job! You have two open bays with lifts and you ask your service manager to hire two more technicians so you can sell more appointments, increase customer pay sales and raise your service absorption as a result. Then, the first words out of your manager’s mouth are, “Ralph and George (technicians) each are using two bays. They would be very upset if we hired two more techs and gave them their two bays, so I don’t think this is a good idea.” What do you do? Do you need the buy-in of your three employees before you can make a decision?
Here’s another thought. You have a very good F&I department currently averaging over $1,000 per retailed unit by doing a great job selling from their F&I menus. You then decide to implement a service department maintenance menu to properly train your customers on preventative maintenance and increase service sales. You pay a professional to design it for you and install it on your advisors’ computers. You then have all of your advisors professionally trained on how to make a proper feature/benefit presentation of the menus just like you did with your F&I producers. A couple of weeks go by, you sit down with your service manager to review your advisors’ performance reports, and you find that your HPRO, profit margins and sales per RO have not improved at all. You ask your service manager, “How can this be happening?”
He responds with, “The advisors just don’t have the time to use those menus.” What do you do? Before you answer that question, understand this: There are only two reasons why advisors are not presenting menus to 100 percent of your service customers: 1) they don’t know how to or 2) they don’t want to. Now, you’ve already paid to have them professionally trained, so clearly they should know how to. They just don’t want to. You see, they did not buy into the training and the new process of presenting menus. Do you need their buy-in to implement this new process?
How about you decide you want to train your service and parts managers to become more effective and productive managers by measuring the performance of their respective employees every single day and using those measurements to compare their performance to the industry benchmarks and thereby hold them accountable for their individual performance. You feel it’s important that these managers become proficient at reading, understanding and evaluating their departments’ financial statements to build a plan and focus on achieving 100-percent service absorption. Your managers respond with, “I don’t have time to do all that stuff.” What do you do? If your managers do not have time to do “that stuff,” then they’re not really managing. Do you need their buy-in to do the job you hired them to do?
By now you should have a pretty good idea that I don’t have much empathy for people who don’t buy into change when it comes to improving customer satisfaction and retention, increasing profitability, and giving dealers the kind of return on their investment they deserve. Here’s a news flash: There are dealers who are losing money in their fixed operations because of the lack of buy-in by employees to change. Hold them accountable to change, or replace them! You don’t need their vote.
You think I’m too harsh? You think because someone has worked for you for a number of years that they shouldn’t be held accountable for their performance? Does tenure make them a top performer? Please answer the following questions:
1. What do you do with an F&I producer who can only average $200 per retailed unit?
2. What do you do with a salesperson who can only sell four cars a month?
3. What do you do with a sales manager who won’t take a T.O.?
4. What do you do with a used car manager who doesn’t have time for an appraisal?
I’m guessing your answers were a little harsh. Most dealers have accountability in place for the sales departments. Your processes are not optional based on who buys into them, are they? Why should fixed operations be any different? You are not running a democracy.
Vol. 8, Issue 10