Category Archives: Dealership Sales Department

Dealerships Can Generate More Profit By Eliminating Waste

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You can generate more profit without spending money – just resolve to eliminate wasted time at your Dealership or in your Department. I think you’ll be amazed at how much WASTE you can find just by looking. In most Service Departments, the average gross profit per Technician billed hour runs over $100, so it doesn’t take long for the savings to add up.  A Sales Person’s time can run between $95, to well over $150 an hour, depending on his or her abilities. It doesn’t always take a Time and Motion Expert to see what can be improved. Read below and think about some of the common areas of waste (besides being seduced to surf the Internet) at your Dealership:

WAITING: Employees waiting for Customer approvals or authorization, equipment to be repaired, parts to arrive, the finance manager to be available, etc. Waiting probably accounts for the biggest waste of time. If you increased the number of Customers making Service appointments would that help your sales? YES – You generate more income when you have the opportunity to prepare for the Service Customer’s visit. Would better Repair Order descriptions help? Yes – If the Technician can fix the vehicle without having to go back to the Service Advisor to get the answer to “how can we duplicate your concern?”

CORRECTIONS: Fixing a repair twice, re-ordering a needed part, re-contracting a finance Customer, etc. Taking the time to get it right the first time will save you time. Think of the saying, “If you don’t have the time to do it right, when will you have time to fix it?” Do we have the right Techs working on vehicles? Do we have properly trained Salespeople? When you spend your money on Advertising, and your Customers receive average treatment from their Salesperson, it is time AND money wasted.

MOTIONS: People, paperwork or equipment moving more than required. This waste is probably the easiest to fix. Start by streamlining processes, then updating or adding new equipment. Could barcoding parts and vehicles save you time and money when counting inventories? Are Technicians wasting time looking for a Customer’s vehicle on the lot? Do Salespeople roam the lot in hopes of finding the right car or truck to sell to their Customers? Fix these problems with efficient processes.

OVER PROCESSING: Are there process steps in place to overcome a poor design not required to take care of a Customer? Think of a title clerk hand addressing envelops for vehicle registrations that could easily be put into window envelopes.

UNDER-UTILIZATION: Underutilizing the potential of your people is also considered a waste. When you have a Tech (generating over $100 an hour), does it make sense to waste any of his or her time? Pre-pulling parts or running parts to Technicians would make better use of the Techs’ time. Should the Salespeople be gathering insurance information instead of the Finance Manager? Is the Sales Manager handling all of the Dealer Trades, when he or she could be coaching Salespeople or working with a Customer?

By eliminating or reducing waste, the result will improve the overall efficiency of your Dealership—thus providing time to generating more income. Involve your Employees to see how to eliminate wasted time in every Department.

My Profit Blueprints Analysis provides Dealership Managers with a monthly report that saves them time by highlighting underperforming areas with color and provides Managers with Dealership-Proven Action Plans to help them with a plan for an area of concern. Couple that with a monthly conference call and you are on your way to a fabulous year!

Make Your Job Easier with Better, Faster Decision Making

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If you’ve watched any football game, you have to be in awe at the speed at which coaches decide what will be the next best play, based on the current circumstances. There are enormous variables that dictate the best play. Third down and seven yards may call for an entirely different play if you’re in the first quarter compared to the last two minutes of the game, and you are behind. Now are you behind by 3 points or 5 points? How close are you to the goal? The coaches have less than 25 seconds to analyze all of the variables to come up with the right play for the desired outcome.

Decades ago, exceptional coaches knew there had to be a better way than just going with their gut. Bill Walsh, Bill Parcells, and Jimmy Johnson figured out that if you knew ahead of time what the decision(s) should be in specific situations, you would be more successful. They “invented” the laminated sheets that every head football coach now carries with 1st Quarter plays already scripted, and situational decision plays “decided.” It is much easier discussing play options sitting at a table with unlimited time than making split-second decisions when the outcome of a game depends on choosing the right play while the crowds are screaming, your starter left injured, and you are trying to think clearly.

A good decision maker makes for a good Leader. Establish a decision-making process for common issues, and you can be more efficient in your day-to-day work. In any given week, Managers make hundreds of decisions; some easy, some critical. There are daily decisions that can be made quickly using an analytical approach when you follow a Decision Tree. Decision Trees are used to select the right strategy for a current situation and operate much like flow charts. If this – then do this, if that – then do this. When do we take a short deal versus passing on a deal?  To finish a Service Customer’s vehicle – do we special-order a part or do we pick it up locally to get the vehicle on the road sooner?  Decisions Trees, not only free up Manager’s time, they improve the consistency of your processes.

When applied to everyday choices, Decisions Trees will help your staff know what to do in specific situations – even when you’re not available.
The goal is not to take emotions out of the decision-making process, but to prevent emotions from taking over. Remember the old way you decided which used vehicles would make it to your lot – the Manager buying them because “he knows what sells in his market.” The myriad of tools available to help Managers stock inventory for their market and price their vehicles for their market insure Used Vehicle inventories that are right for your Dealership.

Our past experiences dictate the decisions we make and will influence the way we solve problems. When we apply what we’ve learned to make smart choices, we can continually adapt and improve our processes. Think about the decisions you make every day, can they be put into writing or flowcharts for you and your staff to follow the path that will yield the desired result quickly? It works in championship caliber football, and it can work for you.

For examples of Decision Trees email Brooke@profits4dealers.com

 

 

Get the Most Out of Your Dealership Advertising

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You spend time creating ads, you spend money advertising and yet the sales don’t reflect those efforts.  Does this sound familiar? Let’s figure out why we don’t get the results we want before we spend any more time and money on advertising.

The following is a recent Service experience.  (Skip to the “Bottom Line” if you don’t need another story about a bad service experience)  I needed to replace a trim piece on a 10-year-old vehicle – easy enough, no diagnosis – just “do you have the part in stock?” before I spend an hour in drive time.  First, I called the Service Department and was able to get the voicemail of the concierge.  The voicemail, while pleasant, encouraged me to make an appointment online at my convenience; I guess that was so I wouldn’t have to bother her with annoying details or questions.  You can tell it is a highline dealership because they call their appointment setter/reservationist a concierge.  I left a message explaining the two items I wanted to have installed and waited 24 hours before calling the new Service Manager.  I knew he was new because he sent an email letting me know he was the new manager and he wanted my business with a “too good to be true” offer for service on older vehicles.

Me being me, I felt I should help him out (at no charge) and let him know how he could bring back old Customers…Answer the phone or return calls ASAP!  You don’t have to give everything away if you take care of the Customers!

 On day three, I decided I had to be smarter than their system and contacted the Parts Department directly to check on the availability of the part and after hearing “Parts, could you hold please?”  I knew I had hit gold; I didn’t have to leave a message and wait for it to not be returned.  I was prepared, I had the VIN and pictures of the trim part ready to email, unfortunately, the Parts Counter Person had been there two weeks and wasn’t familiar with the models of the vehicles or how to look up trim parts.  However, he was friendly and tried hard before he had to ask someone how to look up the part.  Good news, that part breaks so often that even though the vehicle is 10 years old; it is stocked in dove or ivory.  He promised to have a Service Advisor call me, which happened 2 hours later.

Thirty-six hours after contacting the Dealership, I had an appointment!  Yahoo!  Several hours after that, the Assistant to the new Service Manager called to see if there was anything he could to do to help me.  My first thought was, “Can you connect me to the Used Car Manager and see if he wants to buy a 10-year-old car with less than 70,000 miles?”  Maybe he had an in with the Service Department.  Side note:  The vehicles they sell new are on my short list for a new puppy transportation vehicle, but the Salesperson would have to put a gun to my head to buy a vehicle from them.  If I can’t get decent service, what will the sales experience be like?

A long story to get to the point – train your people on how to take care of your Customers, how to do their job and to take pride in doing the job well.  If you whittled out a percentage of your marketing budget and invested it in improving your process and people, you might receive benefits you are expecting.

Bottom Line: Train All of Your Employees:

  • If you’ve hired the right people, training will improve your employees’ skills,
  • Training will help employees feel appreciated and you are investing in their future,
  • Training reduces employee turnover, which is very costly.

The second and third points are a bi-product of what should be the most important reason – trained employees can take care of your Customers the way you want your customers to be treated.

Before you begin any training, answer the following questions:

  • Exactly what do I want to improve with training?
  • How will I measure the results of the training?
  • How will I measure the return on my training time and investment dollar?

If there is no way to measure the results, do you need to spend money on training?

Tips to make your training program a success:

  1. Get the buy-in from all who will be impacted: Management and Employees – what do they want to learn and need to learn?
  2. Get staff excited about the training by reinforcing the benefits. Think of it as learning…not training.
  3. Have a training agenda designed for your specific needs and one that focuses on the changes you want to make, leave out the “fluff and nougat.”

With a little training, your Advertising dollars will pay off!

Yes, You Can Reduce Employee Turnover

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Employee turnover is a fact-of-life in any business. Employees retire, relocate, find a better job or are terminated for one of the several possible reasons. The costs of turnover are numerous. The direct costs of recruitment and training are the easiest to calculate; but the loss of Manager’s time, disruption of staff, reduced sales and losing Customers because of bad experiences could be where the biggest costs lie. There are different ways of calculating employee turnover, but the idea is to use the same method year over year and to work on reducing the turnover rate. After the W2s are printed is a good time to run the numbers to generate a baseline turnover rate for your Dealership.

To calculate your turnover rate: count the numbers of W2s of former employees and divide by the number of W2s of current employees. Multiply the answer by 100 to get a turnover rate that you can compare to other industries. The national average for private sector businesses is 42% according to NADA. In vehicle dealerships, one department is typically the biggest contributor to the turnover percentage: the sales department. While turnover is a big money waster and creates a customer retention problem, I have to give credit to Sales Managers for persevering in the efforts toward keeping a full staff and working on upgrading when possible.

After the financial collapse of 2009 and subsequent high unemployment rates, surprisingly an estimated 30 million people quit their jobs in 2014.
According to Forbes, some of the key reasons employees quit are, because:

You’re overloading your best people with more responsibilities.
After years of trimming staff; to get the same if not now more work done, your best people are asked to do the work of 2–3 people. Take a look at your top staff: do they have the opportunity to work on higher-level stuff, or are they expected to come in day-after-day and do the same old stuff just to keep up with the work?

You’re never around.  We say the most important time Managers can spend at their job is the face time with their employees and customers. If your employees can’t find you, how can you solve problems, and coach and motivate your staff?

You’re complacent with the caliber of your employees.
Good people want to work with good people, yet managers will let bozos keep their jobs; they’ll let tardy people keep their jobs, and they’ll let lazy people keep their jobs. It’s easier than taking the time to make better hiring choices, easier than confronting the inept, and easier than training people – that is, until the good people leave.

You’ve never given your people a sense of where they can go with their careers.
You may hold the job that you’ve always wanted, but what about your employees: have they reached their goals? Do you even know what their goals are? A career path is one way to show them how far they can go at your dealership, yet few managers have laid out a path for their staff. Take the time to understand your employees’ goals and what role you are playing in helping them reach those goals. They may not know what their ultimate goal is, but I’m sure they’d appreciate knowing you cared.

According to Indeed.com, the new normal for employment at one place is just under five years; and January is the month when most start looking for a new job. On-line job searches were up 40% from December to January. So now is a great time to work on employee retention before your employees have a “New Years Resolution” that includes finding a new job.

The best way to retain employees is to communicate with them. Conduct “Stay Interviews” and ask employees why they stay at your dealership, and then pay attention to what they like. Are they happy here? Are developmental needs being addressed? Are you recognizing and rewarding hard work?

Back to the turnover rate, just like any other measurable procedure, you can improve the numbers by setting goals, examining current processes, looking for ways to improve them, and implementing best practices. It will be worth your time to further break down the turnover analysis by examining how many employees either were terminated or quit within the first 90 days of employment. Understanding why this group of employees “didn’t make it” will aid in implementing processes to improve your retention numbers. If you conduct formal exit interviews, excellent! If not, get a list of folks who didn’t make the 90 days and call them to ask either why they quit or why they feel the job wasn’t a good fit (i.e., they got fired). This trove of information will help you on the right path for good employee retention.

It Is All In The Details

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As Customers keep raising the bar with what makes them happy, it becomes more and more important to pay attention to the details in your Dealership.  I am surprised by how much Customers continue to demand from Dealerships in a world where the number of businesses that “Wow” their Customers continues to decline.  Here’s a story about a small detail that we may not think about, but a Service Advisor did.

While Lloyd Schiller was conducting Service Advisor training in Iowa, Robby, a Service Advisor, commented on how much the Customers liked the new menus and the multi-point inspection forms.  However, now it’s a problem because all the extra paper work, combined with the invoice,  was filling the glove box.  Robby’s thought was “wouldn’t it be nice if the Customers had a folder to hold all of the Service paperwork, just like they get when they buy a vehicle?”  Well two months later, they had imprinted folders and “the Customers LOVE them!”  The good news is these inexpensive folders are a continual promotional reminder of the services you provide.

Another way to keep your Dealership’s name in front of the Customer is to do what Inskeep Ford in Greenfield, Indiana, does: a simple, but useful, air freshener with the Dealership’s logo and website imprinted on it.  It can be hung in the new and used vehicles once they’ve been prepped.  You can use it when delivering a new vehicle or it can be given to a Customer whose vehicle is in for service or is in the Body Shop.  Let the Customers know they don’t have to wait for a service appointment for a new air freshener; the Customers can visit your Dealership anytime and get a new one when the scent evaporates.

Small details can make a big impact on your Customer’s perception of your Dealership.  What can you do that keeps your name in front of your Customer – and keeps them coming back?