Category Archives: Dealership Service Department

Service Advisors – Should They Also Be Cashiers?

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With the demand to trim expenses, more and more Dealerships are looking to the Service Advisors to Cashier their own Repair Orders.  Assuming the Cashier isn’t doing many other duties, such as filing, warranty processing, etc., then here are four reasons to consider changing the way you’ve done it in the past:

  1. Free up Personnel Expense for another commissioned Service Advisor.
  2. Increase Customer Retention and Improve CSI.
  3. As a bi-product of #2 you’ll increase your sales and profitability.
  4. If the Advisors have to speak to the Customers to finish the transactions this will force Service Advisors to perform some variation of an “Active Delivery” (A term we use to loosely describe how the serviced vehicle is returned back to the Customer—similar to the Vehicle Sales Department delivering a New or Used Vehicle).  The Sales Department DOES NOT RELY on the Title Clerk to review the paperwork with the Customer, so the Service Department should not rely on the Cashier to review the Repair Order, Multipoint Inspection, and Manufacturer’s Survey with the Customer, either.

If you think your Service Advisors are doing a good job on the telephone reviewing the work done to the vehicle, and that alone is a sufficient Active Delivery, stand by the Cashier from 4 P.M. to 6 P.M. and listen to the Customers’ questions.

If the Cashier is paging your Service Advisors to explain what was done to the vehicles; or worse, attempting to explain the repairs him or herself, then you first need to train the Service Advisors on how to do an Active Delivery.  Please call us at 877.316.7418 if you want a written process.

Your Service Advisors need to perfect the Active Delivery Process before you make a change.  If you have a good CSI score, this will make it better!  It will also make a bad CSI score worse.  Please don’t punish the Customer because you want to cut some Personnel Expense.  This is your opportunity to put your Service Advisors in charge of their Customers from start to finish.

To begin, each Service Advisor will need his or her own credit card machine.  There aren’t many cash transactions in the Service Department, so there can be a centralized cash drawer, perhaps at the parts counter or somewhere secure.

Managers need to check the Exception Report (CDK: REX, R&R: 3619), if available on their DMS, every day, looking for changes to invoices.  As a final safeguard, any changes made to an invoice after it is finalized should ONLY be done by the Manager.  The Customer needs to be there when the change is done!

When done properly, eliminating the Cashier position and training your Service Advisors will improve your Net Profit, your CSI and improve the Advisors’ Client retention.  It’s a win-win-win for you, your Advisors and the Customers!

 

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.

Upsells – Your Secret Weapon for Higher Profits

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I have shopped at the same grocery store chain since I was able to use a microwave.  They have always had a good fresh seafood department.  Last week, for the first time, someone tried to upsell me at the seafood counter: I ordered my pound of shrimp, and after weighing and packaging the shrimp, Matt, the new seafood manager, asked me if I needed cocktail or scampi sauce.  The man ahead of me had been asked if he wanted to try one of their new butters for the salmon he was buying.  I upsell myself enough at the grocery store, but for the first time, this manager proactively upsold me.  I imagine the sales of sauces and butters have increased since Matt took over the seafood department.

So what does that story have to do with you?  Well if Matt can upsell cocktail sauce and a $7.50 an hour cashier at McDonalds can upsell French fries, then why can’t we do a better job of upselling at our Dealerships?  I’m not talking about selling Customers unnecessary work; I’m talking about items that go hand-in-hand with each other, just like the shrimp and cocktail sauce!
In the Service Department, for example:

Request: New Tires:  Add-On Repair: nitrogen, wheel alignment, and road hazard insurance.

Request: Engine Misses  Add-On Repair: Besides the Correction, Replace spark plugs, change fuel contaminated oil & filter, possible air filter, PCV valve

Request: A/C Hose   Add-On Repair: Other A/C Hose if they are same age, Evacuate & Recharge

Request: Honda timing belt   Add-On Repair: Replace the water pump, radiator & heater hoses, coolant.

Lloyd Schiller of Lloyd Schiller.com says, “I see this all the time, a Customer comes in for a needed repair and we do that repair.  These are more than upsell opportunities; this is taking proper care of the Customer’s vehicles.  For example, if an original hose breaks, then the other hose or hoses will fail soon. Why put your Customer at an inconvenience PLUS charge them again for lost coolant or lost refrigerant because “we were afraid we’ll chase them off.”  If you’re inside my heart doing an angioplasty, PLEASE check ALL my arteries and vessels and give me ALL the stents I need (also a real-life lesson)! By training which repairs should be paired with corresponding work or what work will save the Customer money as long as the other work is being done, not only do you increase your sales, you provide a better level of service.  We train these repair combinations during our Service Advisor training classes and see the Total Sales per Repair Order increase.” 

Take a few minutes and ask your Service Advisors what they should do when a Customer requests any of the above services.  I hope the answer is, “I’d recommend….”

Upselling is not limited to the Service Department.  When the Parts Department’s phone rings it is opportunity calling.  The call is not an annoyance that must be dealt with, it’s a prospective Customer.  Answer the phone promptly and with a smile.  This simple courtesy will make it easier to close the sale and to upsell the caller.  The following is an excerpt on phone upselling from The Ultimate Marketing Plan by Dan Kennedy.

Dan’s example is from a Parts store where the Owner is spending a lot of money on advertising, but the sales are not increasing:

Well, Customers were calling, but after the caller stated his business, the answer went like this: “Lemme look it up–hold on . . .still there?  It’s $62.50.” Click.  Does this sound familiar?  The Parts Store owner had spent a lot of money advertising, but he had failed to train his people to handle the calls.  What they did to fix this was the following:

  • Devised a phone script to capture the caller’s name, address, and phone number.
    (This information was used to market to the callers)
  • They taught the script to all Employees.
  • They instituted a reward pool of fifty cents per captured name, address and phone number, divided at day’s end by everybody working that day.
  • They added a “telephone upsell” to the script as follows.

After taking the Customer’s phone order or answering the Customer’s questions, the Employees finish with:

 “Oh, just one more thing – we have an extra special offer just for today’s callers – would you like to hear about it?”

More than 70 percent of the callers said, “Yes.”

“Good.  Any caller who comes in today or by noon tomorrow will receive a 10% discount coupon for any purchase in the store and a free copy of our 400-page catalog.  Also, there’s a sale right now on (insert product).  I can set your coupon and catalog aside with your name if you are coming in.  Should I do that?”

More than 50% said yes.  More than 25 percent actually showed up.  More than 15% not only came in but also bought the item they originally called to ask about and bought the sale item described on the phone.

Spend a little time fine-tuning a script for your Parts Department to gather the caller’s contact information and to close the sale upon the initial phone call.  Don’t let those opportunities go unanswered.

The Body Shop has opportunities, too.  It can get discouraging trying to upsell Customers who want you to cover their deductibles, but there are Customers who are “not guilty” of the accident and have no deductible.  My mother recently visited a body shop due to a minor accident.  After the repair was done, she told me about the accident and how nice they were at the Body Shop.  When I inquired if she also had the missing passenger mirror replaced, she said: “I didn’t think of it and no one mentioned it.”  Missed opportunity!  She still is driving around with a warped plastic mirror instead of a glass one — a plastic mirror was her fix so she wouldn’t have to go to a Body Shop (for those with friends or family in Bonita Springs, Florida, you might want to warn them about a burgundy Mercury Sable).  To maximize your Body Shop opportunities, while writing an estimate, do a vehicle walk around.  Increase sales by offering to write an estimate for work not associated with the insurance claim, it is bound to be cheaper if it is done while the vehicle is already at your Dealership.  When I had my vehicle at a Body Shop for a repair I wasn’t responsible for, the Estimator never even went to my car; he just took the insurance company’s estimate — he could have found a few “defects” to upsell me on had he bothered.  For Customers who have their vehicles serviced at your Dealership, check the service history; you could save the Customer time by having their needed maintenance done while the vehicle is in your shop.  Don’t miss the opportunity to help the Customer and the Service Department.

For the Sales Department, accessories are your big opportunity to upsell to the Customer, but that is a whole other article.  Make this month the time when you look at Service, Parts and Body Shop and see how legitimate upsells are your secret weapon to Happier Customers and to higher Net Profits.

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?

Make Your Express Service Center More Profitable

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Maintenance Work is eclipsing Repair Work for Customer Pay visits, but it dims in contribution to Gross Profits.  Express/Quick Service Teams can increase Tech Efficiency, leaving us more time to sell recommended work and to increase our profits – if we take advantage of this extra time. Consider the following profit opportunities:

Upselling in Express Service

Multi-Point Inspection (MPI)

Provide your Customers with laminated blank MPI forms.  When you write-up your Customers, show them what visual inspections are being done on their vehicles while the vehicles are on the lifts.  On the back of the MPI form, show the benefits of maintaining their vehicles or have a copy of your maintenance menu.  Educate the Customers on the benefits of changing engine coolant, brake fluid and air filters, etc. to help sell the recommended maintenance that wasn’t sold during the vehicle write-up.  Reinforce that maintenance is less costly than repairs or expensive breakdowns. (When your laminated copies get grungy, please replace them.)

Have a decision-tree in place for when Customers buy recommended work and it will take longer than an hour.  Should we put the Customer in a loaner car or do we shuttle them to the mall/home/back work?  Will the work be done by a Main Shop Tech or by the Express Techs?  Do you have a Tech upsell bonus for work assigned to another Tech?  To sell and install more tires, consider a dedicated tire-change Tech.  Make the transition seamless to the Customer when a vehicle moves from the Express Shop to the Main Shop.

Have a maintenance menu which includes any additional time necessary to complete the work.  This makes it easy for the Customer to say, “Yes!”  When the Customer is expecting to get in and out in under an hour, the last thing he is thinking about is adding more time to the visit.  “We can take care of the cabin air filter today and you’ll still be out in under an hour.”  Your Express Service Team makes it easy to add services to the Repair Order without adding time.

Have a flyer available to promote your specials and your other departments.  If you would like an example, email us at brooke@profits4dealers.com.  This could also be printed in black and white and used on the back of Parts Counter Tickets or Repair Order Invoices – another opportunity to reach more Customers!

Add a Labor Operation Code for safety items found, but not taken care of at this visit.  The Labor Op Code, in some fashion should say (you can always check with your attorney): “Customer was advised of severe concerns regarding the vehicle’s safety.  I have declined the recommended work and will not hold the dealership liable should not completing this work lead to a system failure or an accident.”

X_________________________ (Customer’s Signature)

When Business is Slow

One of the killers to profit in the Express Service Center is paying Techs a clock hourly wage and not having any Customers for an hour or two.  If you can define specific days of the week and/or hours of the day where your business is slow, consider Happy Hour Specials, After School Specials or Coffee Break Specials to attract Customers to fill those hours.

If the slow times vary, how about a sign to put in front of the dealership?  (Oil Change – No Waiting.  Free Tire Rotation)  Cost of sign: less than $100.  When you get busy, bring in the sign.

Still no Customers?  Don’t waste the down time, use the time to refresh your
Techs and Advisors on inspection skills and selling skills.  Make a list of things that can be done when there is a gap in work.  Such as oil changes on company owned vehicles – loaner vehicles, demos and parts trucks.  Oil changes for retail trade-ins, leave the inspection and repairs for the higher paid Techs.  An Employee Perk! How about your Employees’ cars?  You are already paying the hourly Techs; the Employees pay for the oil and filter(s).

To further discuss how to make your Express Service Center (from performance-based pay plans to Advisors’ scripts to best practices) a real profit center, call us at 877.316.7418.

 

 

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