Service Drive Magazine September 2015 by CBTNews

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SERVICE DRIVE MAGAZINE

A CBT AUTOMOTIVE NETWORK PUBLICATION

September 2015 SMART SERVICE ADVISOR HIRES TRANSLATE TO

BETTER PROFITABILITY DON REED ... see PAGE 12

IMPROVE THE ODDS THAT A CUSTOMER RETURNS FOR A SPECIAL ORDER PART

CHUCK WENZLER

CBT AUTOMOTIVE CONFERENCE & EXPO

OPENS REGISTRATION

Nation’s preeminent college football coach Saban headlines a diversified agenda that also includes prominent leadership author and millenials expert. .... see PAGE 8

... see PAGE 16

FOLLOW FRAMEWORK TO RESEARCH A TRAINING FIRM

BEFORE YOU HIRE TOM KUKLA ... see PAGE 20

Patrick Lencioni Famed leadership author

PRIORITIZED SERVICE ESTIMATE SHOULD FOLLOW A COURTESY INSPECTION

JOHN FAIRCHILD ... see PAGE 22

Jason Dorsey Millennials authority PRSRT STD US POSTAGE PAID Permit No. 1459 Pewaukee, WI

Volume 1, Issue 5

Nick Saban Championship football coach

IMMEDIATE OUTREACH PRESERVES A POSITIVE TENOR IN ONLINE REVIEWS Don’t wait until comments pop up on review sites to learn a service customer was displeased; instead, ask immediately after the visit. ... see PAGE 14

MAKE THE OWNER OF RECALL VEHICLE

A PERMANENT SERVICE CUSTOMER

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

Start by researching these owners and reaching out to them first rather than waiting. ... see PAGE 6

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ARE YOU WHERE SHOPPERS ARE SEEKING SERVICE? Compete against large service chains and independent repair shops with the ﬁrst Service & Repair oﬀering dedicated to you. Cars.com gives you the chance to showcase your service department’s pricing, reviews, warranty information and more. Ensure car owners choose your service department over the competition, before it’s too late.

SERVICE DRIVE MAGAZINE

Letter from the editor

SERVICE DRIVE TODAY Email

Newsroom@ServiceDriveToday.com Phone

678.221.2955

Dear readers, After awhile, the statistics about how many millions of vehicles in the U.S. are recalled by manufacturers each year simply starts to numb your brain. However, Chris Miller of the Recall Masters firm thinks it’s time for service managers to stop being desensitized and time to start getting excited about the potential for long-term service customers lurking behind those recall numbers. Check out Miller’s article inside, and also be looking for coverage in our October edition with practical tips about how to convert recall repairs into lifetime service relationships. What one business issue, more than any other, keeps you awake at night? Your peers say it’s the customer perception that the independent shops’ rates are cheaper than theirs, according to new research from DealerSocket. You’ll want to read our story on that research, and also mull over the statistics about what happens to dealerships’ conversions of car buyers to service customers three to five years after the purchase. Ever stop to think about how much of your dealership’s success hinges on making smart hires of service advisors? Don Reed of DealerPro Training has, and he has written a list of dos and don’ts for interviewing prospective advisors with an eye toward hiring the best fits (you might be surprised who meets that description). Plus, registration has started for Service Drive Magazine publisher CBT News’ “2016 Sales, Service and Marketing Conference & Expo,” which will be held in Atlanta next Feb. 9-11. With much of the agenda targeted toward service departments’ most pressing needs, you won’t want to miss the conference, and our coverage inside gives you complete information about speakers, registration and sponsorships. Happy reading.

PRESIDENT AND PUBLISHER Jim Fitzpatrick VICE PRESIDENT/COO Bridget Fitzpatrick MANAGING EDITOR Jon McKenna

CREATIVE DIRECTOR Simone Tieber DESIGNERS Betsy Alvarez, Andrea Carroz PRODUCTION MANAGER Jason Lowsy WEB DESIGN Jeff Pearson

JON MCKENNA Managing Editor

DIRECTOR OF MARKETING & EVENTS Alex Branam MARKETING ASSOCIATE Roxanne Luhr

In This Issue 6 Recall vehicles represent an opportunity to recruit a lifetime service customer By Chris MIller, Recall Masters

8 Major CBT conference in February offers heavyweight speakers, broad dealership agenda 10 New report gives a variety of operating, sales and marketing metrics to service By Jon McKenna

12 Making the right hires of service advisors drives dealership business success By Don Reed, DealerPro Training

14 Don’t chance an unhappy customer; e-mail him right after service appointment By Peter Martin, Cactus Sky Digital

4 Service Drive AUGUST 2015

SUBSCRIPTION MANAGER Tom Domagalski

Customers often fall to return for installation of special order part By Chuck Wenzler, M5 Management Services Inc.

18 Ask The Pros 20 Same framework can guide dealer’s hiring of any kind of training firm By Tom Kukla, Tom Kukla Credere Leadership

22 Start reviewing every service labor operation and its frequency, to spot gaps By John Fairchild, Fairchild Automotive Solutions

28 Customized apps can help acquire customers and cement retention By Rich Holland, AutoPoint

Profit in the service dept. requires a disciplined approach By Michael Roppo, Automotive Domain Results

32 Grocery stores’ service touches are instructive to dealership Industry By Anne Fleming, Women-Drivers.com

35 On the Set With Service Drive Today Network

26 Advisors and tech should be given a personal presence on social media By Laura Madison, Alan Ram’s Proactive Training Solutions

MEDIA SALES REPRESENTATIVE Jane Howard jhoward@cbtnews.com d 678.221.2964 c 404.452.9551

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.

ONLINE FEATURES Visit www.ServiceDriveToday.com

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EARLY BIRD REGISTRATION NOW OPEN

SP EX O HI AV N S B I T AI OR S LA SH & BL IP E S

FEBRUARY 9-11 2016

Patrick Lencioni

Nick Saban

New York Times Best-Selling Author

Jason Dorsey

Alabama Head Football Coach

Dale Pollak

Executive VP, Cox Automotive Founder, vAuto

Sandy Schwartz

President, Cox Automotive

Best-Selling Author, Millennial Expert

Jared Rowe

President, Autotrader

THE AUTOMOTIVE INDUSTRY’S TOP THOUGHT LEADERS, TRAINERS, AUTHORS AND CONSULTANTS WILL BE CONDUCTING OVER 70 BREAKOUT SESSIONS

Joe Verde

Jeff Cowan

Erik Nachbahr Jeremy Anspach

Alexi Venneri

David Kain

Grant Cardone

Gary Tucker

Don Reed

Scott Pechstein John Fitzpatrick

Phil Sura

David Lewis

Glenn Pasch

Cory Mosley

Sean Gardner

Mark Tewart

Mike Esposito

Kirk Manzo

Jim Flint

Lee Harkins

Brian Pasch

Tom Stuker

Aaron Wirtz

Alan Ram

Jasen Rice

Joe Webb

Tony Molla

Attention Dealers, GMs, GSMs, Sales Managers, F&I Managers, Marketing Directors, Service Managers, Internet Managers, BDC Managers and Pre-Owned Managers The CBT Automotive Sales, Service and Marketing Conference & Expo addresses the needs of every area of your dealership. The automotive industry’s top thought leaders and nationally recognized keynote speakers will present powerful general sessions, more than 70 breakout sessions and thought-provoking panel discussions in what will be the most comprehensive and information-packed event in retail automotive.

Visit CBT Conference and Expo.com for more informaaon

Today’s Owner Of A Recalled Vehicle Can Be tomorrow''s happy service or sales custmer Develop plans now to research and identify these recall prospects, and to effectively interact with them. BY CHRIS MILLER

.S. Defense Secretary Donald Rumsfeld, you may recall, felt there were three categories of knowledge: “... There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.” Now, once your brain stops hurting trying to figure out what he was saying, I think you’ll agree that in auto dealerships, this same principle can be applied to define categories of customers: 1.

The known knowns. These are vehicle owners whom you know about, including customers you have sold to and serviced. Their information is stored in your DMS.

about them. These are potential customers who live outside your marketing area, customers whom your competitors have sold to and serviced, or prospects on lists who have not responded to previous marketing efforts.

3. The unknown unknowns. These are vehicle owners you logically assume (but don’t know for a fact) exist, but about whom you don’t know anything. This group can include secondary vehicle owners who live near your dealership.

“Recalls provide a unique opportunity to reach and engage with new customers, because your dealership is not trying to sell anything yet. Rather, it is offering to help with a problem.”

2. The known unknowns. You know these vehicle owners exist, but you don’t know anything else

6 Service Drive SEPTEMBER 2015

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“When an owner arrives at your store or phones, it is important that you are prepared with a response. Ideally, your dealership should truly ‘own’ the recall problem and apologize to the customer.” FIND “KNOWN UNKNOWNS” AND “UNKNOWN UNKNOWNS”

You can start with your manufacturers’ lists of original owners. However, these lists are limited because they don’t provide information on secondary owners, a group that represents two to three times the number of potential customers. To find these secondary owners, you’ll need check into your state’s rules. In some states, dealers can buy registration data directly from the Department of Motor Vehicles or insurance companies. In others, your OEM may need to get involved. Finding the best sources of lists, however, requires some creativity and digging deep. Independent service and oil change centers, “smog shops” and roadside assistance companies all deal with vehicle owners and VINs on a daily basis, and may be happy to sell lists of current vehicle owner addresses.

CHECK VINS FOR RECALL INFORMATION

Your goal is to convert this owner of a vehicle under recall into a service customer.

THE UNKNOWNS ARE AN OPPORTUNITY

Vehicle owners in the latter two categories -- “known unknowns” and “unknown unknowns” – easily could become your dealership’s biggest source of revenue. All you must do is find them and convert them into service or sales customers, or both. Easier said than done, I know. However, leveraging recalls offers one promising approach. Recalls provide a unique opportunity to reach and engage with new customers, because your dealership is not trying to sell anything yet. Rather, it is offering to help with a problem. Many times, these customers don’t even know there is a recallable problem with their vehicle, or they realize but have shoved the issue to the bottom of their priority list. Recalls provide your dealership with a natural competitive advantage. Unlike independent repair shops, your dealership is authorized to perform these repairs, which won’t cost the customer a dime. Safety recalls also present a huge source of potential service revenue from manufacturers. So, how can your dealership claim its share (and then some, hopefully) of this recall revenue pie? Try following Simply follow this communications strategy:

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Many recalls are publicized weeks or even months before manufacturers are able to accurately identify specific vehicles needing to be recalled, and then customer notifications can take several more seeks. Dealers also can have their own staffs look up recalls for current customers. The best way to do this is to enter their VINs through the secure communications portal provided by our OEM, then create a list of customers with recalls in your CRM or CMS. That list should be prioritized, with recalls that pose the highest safety risk first and those that are most profitable to repair second.

MOTIVATE CUSTOMERS WITH SENSE OF URGENCY

Your recall communications strategy should include three prongs: snail mail notices, e-mail notices and phone calls. Be patient and persistent. Response rates should range from 3 percent to 10 percent, but it may take several months to reap the rewards. Many customers procrastinate or may have recall fatigue from all the notices in the news lately.

CONVERT OWNERS TO SERVICE CUSTOMERS

Owners of recalled vehicles tend to be different than

your typical service customers. The fact they’ve been tracked down and notified of a recall often comes as a surprise and inconvenience, so they react with frustration or even anger. When an owner arrives at your store or phones, it is important that you are prepared with a response. Ideally, your dealership should truly “own” the recall problem and apologize to the customer. One greeting we recommend is: “Thank you so much for contacting us. On behalf of [OEM] and [dealership name], we apologize for any inconvenience caused by this recall. Your safety is our top priority, and we want to make it right by repairing your vehicle at no cost to you.” From there, your staffer should transition into a counseling process and explain the recall description, risks posed, remedy available, length of time to make the repair, and parts availability. Plus, the customer must be notified your dealership has certified technicians standing by to make these repairs. You can also explain your dealership’s service advantages (free car wash, free Wi-Fi, coffee, etc.). This type of planned response will often calm down a frustrated customer and quite possibly turn him or her into a loyal service customer.

CONVERT OWNERS TO SALES CUSTOMERS

If the safety risk posed by a recall is high, and parts are not readily available, then the vehicle owner becomes a prime sales candidate. For example, the recent Takata airbag and GM ignition switch recalls generated so much frustration that many owners decided to trade in their cars; GM stated that in 2014, it sold 6,600 cars to customers with defective ignition switches. If your service department doesn’t have the parts in stock to do a recall repair, don’t just write off the customer as a lost opportunity. Turn him or her over to the sales team, which needs to have devised a strategy. A special incentive should be provided or an offer made, to make up for your service department’s inability to perform the recall repair in a timely manner. Again, the goal is to position yours as the dealership that cares. The growing number of recalls presents an incredible opportunity for dealerships that know how to leverage them. In addition to claiming your share of millions of dollars in recall revenue, there is a very real and even bigger opportunity to turn “known unknowns” and “unknown unknowns” into “known knowns” – and loyal customers to boot.

CHRIS MILLER President of Recall Masters His company is a leading provider of automotive recall news, data, training and communications. Chris has more than 17 years of experience building software to automate marketing communications. He has worked with leading brands such as HSBC/Household Automotive, Mercedes-Benz USA and Costco Automotive Group. Visit the website at www.recallmasters.com.

SEPTEMBER 2015 Service Drive 7

Nick Saban Top football coach

Patrick Lencioni Famed leadership author

Sandy Schwartz Cox Automotive chief

Jason Dorsey Millennials authority

Dale Pollak vAuto founder

CBT AUTOMOTIVE Confere

Will Appeal To Managers At All Levels Of A D Nick Saban, Patrick Lencioni and Jason Dorsey are just three of the featured speakers on a highly diversified agenda.

ealership professionals will find their industry’s most far-reaching conference agenda in Atlanta in February, as they enjoy insights from experts ranging from the president of Cox Automotive to the country’s best-known college football coach. “The breadth of our conference’s agenda will definitely live up to its name,” said Jim Fitzpatrick, founder and CEO of CBT Automotive Network, referring to the “CBT Automotive 2016 Sales, Service and Marketing Conference & Expo.” He isn’t just referring to a powerhouse keynote speaker group. The in-process breakout session schedule will offer valuable guidance and content to virtually every manager in a new car dealership: Dealers and GMs, GSMs and new/used car sales managers, F&I managers, marketing directors, service and parts managers, comptrollers, BDC managers and more. Also, OEMs and vendors in various industries will benefit from the interaction with dealership professionals and hearing about their top priorities. “Our conference will be unique in that it offers valuable new approaches and guidance to every level of a dealership,

8 Service Drive SEPTEMBER 2015

while many other conferences in the marketplace focus only on top management or a single activity such as sales or fixed operations,” Fitzpatrick noted. “In addition, each of those dealership professionals in attendance will be challenged to think in new ways by speakers who have a lot to say about the way their industry is run and how their jobs are performed now, and how they ought to be.”

CONFERENCE WEBSITE GIVES YOU EVERYTHING

The CBT Conference & Expo will be held Feb. 9-11, 2016 at the Omni Hotel at CNN Center in downtown Atlanta. Early bird registration for attendees began on Sept. 1, and CBT is signing up sponsors and exhibitors now. Complete information, including a conference prospectus and a registration form for interested speakers, is available and being constantly updated at www.cbtconferenceandexpo.com.

A conference in the South will provide welcome relief for attendees working through the winter at dealerships in the Northeast, Midwest and Mid-Atlantic states, Fitzpatrick noted. Philips Arena, College Football Hall of Fame and World of Coca-Cola and Georgia Aquarium are just a few of the attractions situated within a few blocks of the conference. Discounted room rates at the Omni Hotel can be booked until Jan. 11, 2016 or until the conference bloc is sold out.

KEYNOTE SPEAKERS ARE A POWERHOUSE GROUP

Current sponsors for the event include EasyCare and Autotrader, and audiences for the general sessions can look forward to hearing from: NICK SABAN, head football coach at the University of Alabama and the winner of three national collegiate championships at Alabama and a fourth at Louisiana State University. Apart from being an uncompromising leader, master tactician and superior motivator, Saban also is a car dealer as the co-owner of Mercedes-Benz and Infiniti stores in suburban Birmingham, Ala.

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WHEN: Feb. 9-11, 2016 WHERE: Omni Hotel at CNN Center in downtown Atlanta HOW TO SIGN UP: Early bird registration for attendees began on Sept. 1, and CBT is signing up sponsors and exhibitors now. Complete information is available and being constantly updated at www.cbtconferenceandexpo.com.

ence & Expo

Dealership

SANDY SCHWARTZ, president of Atlanta-based Cox Automotive, the huge and influential company that owns Autotrader, Manheim North America, Kelly Blue Book and vAuto, just to name a few subsidiaries. He ran the Cox Enterprises group formerly known as Cox Auto Trader from 2006 to 2008, was president of the corporation’s media properties for three years and became president of the Manheim auto auctions unit in 2011, before rising to his current position. He has worked for Cox since 1985. PATRICK LENCIONI, one of the world’s best known writers and speakers on business leadership and management. He has authored 10 business books that have sold more than 4 million copies worldwide in 25 languages, and his interviews and guest columns in periodicals such as The Wall Street Journal and Inc. magazine attract a worldwide following from the business community. Lencioni is a onetime management consultant who founded The Table Group, a San Francisco-based organizational consulting and training firm. JASON DORSEY, one of the world’s leading authorities on how businesses can effectively market to millennials. He is one of the world’s most quoted advisors on effectively selling to customers age 35 and younger, with book credits

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“Our conference will be unique in that it offers valuable new approaches and guidance to every level of a dealership.” such as “Y-Size Your Business” and “My Reality Check Bounced!” Dorsey’s official title is chief strategy officer and millennials researcher for Austin, Texas-based The Center for Generational Kinetics. DALE POLLAK, the founder of vAuto, an Oakbrook Terrace, Ill.-company that is a leading provider of new and used car inventory management and pricing software. The company was bought by Autotrader in 2010. Pollak also is a well known author and speaker in the automotive retail industry, with three business books to his credit including “Velocity: From the Front Line to the Bottom Line.” He also opines regularly about dealership issues on his “Velocity Overdrive” blog at www.dalepollak.com.

BREAKOUT SESSIONS ATTRACT EXPERTS

Meanwhile, the conference’s growing list of featured speakers who will address breakout sessions currently includes experts in dealership leadership, sales management, fixed operations, digital marketing, DMS systems and customer relations, just to name a few topics. Attendees will be able to select from 65 highly topical breakout sessions. “They will cover the gamut of topics most relevant to dealership personnel,” Fitzpatrick said. Again, qualified speakers can express their interest by completing a questionnaire at www.cbtconferenceandexpo.com.

SEPTEMBER 2015 Service Drive 9

Service departments want more of the cars in their bays to come from people who bought at the dealership.

report:Current Service Manager IssueS Include Perception That Independent Competition Is Cheaper DealerSocket findings could help develop metrics and KPIs at your dealership. BY JON MCKENNA

variety of interesting operational, sales and marketing data can be gleaned from the DealerSocket “Dealership Action Report Fall 2015” report. It is based on information from 6,500 DealerSocket dealership customers, surveys of 19,000 dealers and certain J.D. Power information. Among the findings of note for leaders of service departments: 1.

On average, 30 percent of vehicle buyers came back for a service visit within one year of the purchase. That rate tumbled to nearly 10 percent by year three and to only a couple of percentage points in year five. “The churn of a customer purchasing a car, bringing it into the service drive, then trading it in two to five years later is the ideal cyclical pattern,” the report authors noted. “Although most dealerships understand the concept of the customer lifecycle, our data shows that sustaining and converting new car sales into routine maintenance in your service drive is a significant area of opportunity.” Dealers were asked to identify the singlebiggest problem facing their service departments today, and two headaches stood out in particular: A perception by customers that “outside,” i.e., independent, shops were less expensive (chosen by 28 percent of dealers), and customer wait times being too long (21 percent). Other problems mentioned were customer retention (16 percent), difficulty in upselling services (14 percent), losing business to an outside service shop (8 percent), various other problems (a combined 7 percent), losing service business to a competing dealer (3 percent), difficulty in marketing concierge and

10 Service Drive SEPTEMBER 2015

—

VIP benefits (2 percent), and lack of a presence for the service department on social media (1 percent). Dealerships that treat service appointment follow-up as a key performance indicator report an 85 percent confirmation rate on set appointments, and a 79 percent show rate on confirmed appointments. About 36 percent of the dealers surveyed are using “customer-facing” digital marketing of their service department. 58 percent of them are offering online scheduling of service appointments. 78 percent of dealership customers said negative online reviews influence where to buy or service their car. On average, 20 percent of dealership business came from repeat business, which strikes Service Drive Magazine as unfortunately low. “Stores with a high percentage of customer loyalty value long-term relationships and put forth the effort to delivery an exceptional customer experience, in and out of the dealership,” the report authors noted. When asked to identify their two top initiatives and goals for fall 2015 from a list of five, dealers most often chose customer retention and revenue growth. The other choices were CSI, employee accountability and ROI. About 52 percent of online car shopping at these dealerships is done from desktop computers, vs. 37 percent over mobile devices and 11 percent from tablets. The average shopping session is 4 minutes and 14 seconds from a desktop, 3 minutes and 41 seconds from a tablet, and 2 minutes and 43 seconds from a mobile device.

— 29 percent of these dealers’ total leads are generated from their websites. 44 percent of their websites’ traffic is generated organically, vs. 19 percent direct-to-website and 17 percent from paid searches. 61 percent or shoppers go directly to used or new car inventory pages, as opposed to the home page or coupon offers. • 48 percent of responding dealers said their dealerships use data mining software, 39 percent said they don’t, and 13 percent weren’t sure. Among dealerships using the software, 26 percent attribute one to 10 vehicle sales per month to data mining capabilities, 25 percent said 11 to 20 vehicles, 11 percent reported 21 to 40 units, 5 percent reported 41 to 70 units, 5 percent claimed more than 70 vehicles, and 28 percent weren’t sure. • However, failure by dealership salespeople to follow up on data-mined leads represents a missed “area of tremendous opportunity,” according to the report, with only 17 percent of prospects contacted and 3 percent of appointments set. • With 52 percent of dealerships selling fewer than 100 vehicles per month, “followup processes need to be fine-tuned and key opportunities identified within the sales cycle,” the DealerSocket report said. More than 5.6 million CRM leads were analyzed for the first two quarters of 2015. Confirmation rates were 41 percent for phone, 37 percent for online and 35 percent for the floor. Show rates were 68 percent for the floor, 66 percent for phone and 65 percent online. “Confirmation rates are still significantly low and therefore are an area of improvement for dealerships,” according to the survey report.

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Smart Service Advisor Hires Are Absolutely Critical To A

Dealership’s Profitability Follow other dealers’ proven steps to recruiting and interviewing promising advisors, and don’t insist they’ve done this job before. BY DON REED

his time of year is perfect to reflect on your fixed operations team’s year-to-date performance. As a dealer, GM or fixed ops director, you might want to start with the operating profit line on the financial statement and measure your team’s performance against the following industry benchmarks: • Service department operating profit: 20 percent of gross profit • Parts department operating profit: 30 percent of gross profit If you are exceeding those benchmarks, then congratulate your team for a job well done! If, however, your department is falling below those benchmarks, then you obviously have some work to do. Let’s begin by exploring these fundamental questions: Are your expenses too high, or are your gross profits too low? After working with hundreds of dealers, I have learned that in most cases, the fixed ops team is doing a good job of controlling expenses but is missing out on huge opportunities to increase gross profit. Wouldn’t you agree that a dealership almost never can save its way into higher profitability? If so, then what is the single-biggest factor in why so many dealers miss out on so much profitability in fixed ops? I think the answer is people, hiring and managing people. Or, more specifically:

Appropriate dress, confidence, a smile and eye contact separate the good candidates.

Having the right employees in the right positions

2. Having the right number of people to exceed your customers’ expectations 3. Properly training those people to become top performers 4. Implementing compensation plans that reward individual performance

“If you are successful in growing your customer traffic count but keep the same number of advisors, then your sales per RO will decline starting immediately, resulting in a decreasing gross profit even with more customers.” 12 Service Drive SEPTEMBER 2015

5. Holding people accountable for their performance

GOAL IS TO CREATE TOP PERFORMERS

Think about the individual performances of your technicians, service advisors, service managers, parts managers and warranty administrators. Ask yourself, “If I knew then what I know now, would I have hired this person?” Remember, there are only two reasons why any employee is not a top performer: They don’t know how to become one or they don’t want to. The first scenario can be addressed with individualized training of each employee on how to

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perform at a higher level. The latter can be cured with an aggressive recruiting campaign designed to attract those people who want to do what you hire them to do. If you answered the above question honestly, my guess is that many of you will be in the recruiting mode for new hires. So, I want to give you some ideas for recruiting the right people.

HOW TO RECRUIT ADVISORS

A key position for improving gross profits is service advisor. This person speaks with more customers on the phone than any other employee in your dealership, other than the receptionist. Your service advisors also speak with more customers face to face than does anyone else in your dealership. Given those realities, whom do you think has the most impact, good and bad, on a dealership’s customer retention? Whom do you think has the potential to produce $500,000-plus of gross profit per year? The answer on both counts is the service advisor. This is a very important position and requires a definitive plan for recruiting qualified candidates who can achieve top performer status. Here are some simple rules to follow in recruiting service advisors: 1.

Do not hire an experienced advisor who has not exceeded 1.5 HPRO. You don’t need to hire someone else’s underachiever.

2. Consider recruit aftermarket advisors and managers. They all have some degree of applicable training and understand accountability for performance. 3. Aggressively recruit women. After all, at least half of your customers are women. 4. Advertise “No experience necessary.” Why? You won’t have to break applicants’ bad habits. 5. Do not advertise the job as “service advisor.” Instead, pick a title that will appeal to a larger number of applicants, e.g. customer service representative, customer service associate, service secretary, administrative assistant – customer service. Your ultimate goal is to interview as many applicants as possible. I actually got the idea of advertising for a “service secretary” from one of our dealers who ran that title in a job ad and had more than 50 applicants show up – mostly women. We interviewed and profiled the applicants, then hired a young lady, gave her five days of training, compensated her on a performancebased pay plan and watched her finish her first month at 1.8 HPRO and second month at 2.1 HPRO. She brought no technical skills but also no bad habits to overcome. Her customers love doing business with her, she loves her new job, and as you can imagine the dealer is thrilled. Sounds like a pay raise!

TIPS FOR ADVISOR INTERVIEWS

Once you are interviewing service advisor candidates, for what personality traits should you look? We have worked with about 1,000 dealerships in-house and in workshops, and the following qualities and questions (even if they don’t seem dealership-specific) are common to the successful hires:  Was the person dressed appropriately for the interview?  Did he or she give you a firm and friendly handshake?  Was he or she smiling throughout the interview?  Did the applicant make and keep eye contact with you throughout the interview?

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Women candidates should be aggressively recruited to fill service advisor jobs.

“What is the single-biggest factor in why so many dealers miss out on so much profitability in fixed ops? I think the answer is people, hiring and managing people.”  Ask what he or she liked most and least in the last job.  Ask, “Why should I hire you over any of the other applicants?”  Utilize a personality profile to determine if the applicant is decisive, outgoing, self-motivated and able to handle stress.  Review the job description and ask if the applicant is comfortable with those responsibilities. As you do so, watch for negative body language.

KEEP A STEADY CUSTOMER/ ADVISOR RATIO

Now, let’s say you have willing candidates you are ready to hire. How many customer service representatives, aka service advisors, does a dealership need? We use a guidepost of 12 ROs per day per representative – customer pay and warranty, not including internal. If your advisors are working with more than 12 customers per day, and your dealership needs to increase gross profit, then you need to start planning for hiring another representative – NOW! If you are successful in growing your customer traffic

count but keep the same number of advisors, then your sales per RO will decline starting immediately, resulting in a decreasing gross profit even with more customers. Each advisor should be able to devote at least 15 minutes to each customer at the time of write-up and another 15 minutes at the time of delivery. So, hire that additional advisor as soon as your traffic begins to increase. This scenario is commonplace when OEM recalls are announced, and a dealership’s phones light up with an ever-increasing volume of requests for service appointments. If your advisors are currently working with about 12 customers a day, and suddenly the recall traffic starts building, then we find in most cases the retail customer becomes seen as a lesser priority than the warranty customers. But, a successful dealer must be able to accommodate all service customers in a timely manner. Recall customers do, however, present a great opportunity to recapture “lost souls” who have not been in your dealership in more than a year. Your service advisors are the key to making that happen. So, prepare your recruiting plan, avoid hiring someone else’s underachiever, recruit non-automotive people who bring no bad habits, and invest in their training. Your net profit could soar to record levels.

DON REED CEO of 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 U.K. to increase profits in their fixed operations. He was rated a Top 10 Speaker at the NADA convention for four consecutive years. Visit the firm’s website at DealerProTraining.com.

SEPTEMBER 2015 Service Drive 13

Follow Up With Your Service Customers Before They Can Vent About Any

problems online

Your goal is to steer satisfied customers to review sites like this one, and intercede with the angry ones before they go online.

Regardless of whether their experience was great or dismal, an immediate e-mail puts you ahead of the game. BY PETER MARTIN

ue to today’s immersive technology, consumers are more vocal than ever. Thanks to online review sites like Google+, Yelp and Cars.com, an unhappy customer can quickly and easily damage your dealership’s reputation across the Internet. Plus, this same customer also will be the first to give you a scathing CSI survey. Online reputation and CSI scores are not just the sales department’s problem anymore; they are critical influencers of the service department’s revenue as well. According to a recent study by DealerADvantage, 43 percent of all motorists research online where to have their vehicles serviced, and Google searches for fixed ops increased four-fold in five years.

14 Service Drive SEPTEMBER 2015

I recommend early intervention with service customers just in case they are inclined to post a negative online review, and a best practice is to e-mail them within 24 to 48 hours of their visit to ask about their experience. If they reply that their experience was good, direct the customer to leave a review, by providing links to the review sites that have proved most beneficial in your market. However, dissatisfied customers should be invited to click on a “Not Satisfied” link in your e-mail, so that your service department can respond and correct the problem before they announce their unhappiness to the world. This process also forewarns you of a potential bad CSI survey.

Our follow-up e-mail typically reads like this: Thank you for choosing Peter Martin Ford as your lifetime dealership. We greatly appreciate the trust you put in our business and value our relationship with you. Please let us know how we are doing by leaving us a review on one of the sites below. We are continuously working to improve our level of customer service, and any feedback you give us is much appreciated. If for any reason you are not satisfied with your experience with us, please click our “Not Satisfied” button to directly tell us what we need to improve upon.

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IMPLICATIONS OF BAD SURVEYS AND REVIEWS

Even if your service department consistently delivers, your CSI score still can drop because of a few unsatisfied customers. Plus, one negative experience can have a disproportionate impact once it becomes part of a survey, a major online review site or your social media accounts. A bad online reputation not only hurts your efforts to acquire new customers, it also can persuade existing customers to defect. Many bad dealership reviews are related to the service department, so improving that department’s online reputation helps the dealership overall. Conversely, positive online reviews can be a great way to counteract negative CSI scores. They also are a great marketing tool, letting you proclaim “topreviewed service department” on your net e-mail or direct mail campaign. That’s why we encourage dealerships to target their service customers with an immediate followup e-mail, including a data-capture form that serves as offline venue to express any dissatisfaction. These unsatisfactory reviews need to be zipped directly to your service manager and advisors, giving the team a chance to rectify the issue before your dealership gets blasted on the review sites and CSI survey.

OFTEN, CUSTOMERS JUST WANT TO BE HEARD

One of the most promising discoveries made through our research was that not one e-mail recipient who filled out a “Not Satisfied” form also visited an online review site complain. I believe most of your unhappy customers just want to feel like they are being heard and their problem being addressed. If they attack your dealership on surveys and review sites, it is largely because they felt they lacked another way to reach you directly. Below are some of the actual submissions we have received through our “Not Satisfied” form.

“Brought truck in for 20k check up and later had no washer fluid. Checked the checklist sheet and it was checked off as being filled. It seems a small thing but as easy as it is to do it made me wonder what else was checked off as being done that might not have been.” — Received by a Toyota dealership in Vermont

“I brought my wife’s Liberty in for a recall. I was provided an estimate for add’l work that was est. @ $1200 + tx. I changed out the links myself and there was no significant wear. This est. was unnecessary work and is dishonest.” — Received by a Chrysler dealership in Arizona

HOW TO FOSTER A POSITIVE REP

When it comes to your online reputation, the more reviews you have, the better. Dealers are typically too nervous about asking for reviews, in fear of actually getting negative commentary. I recommend asking for both kinds of feedback, but directing happy customers

to the review sites and give unhappy customers a direct line of communication to voice their complaints. Building a positive service department reputation is as easy these four steps: 1.

Follow up with your customers before the CSI survey. Exporting customer data nightly or weekly allows you to stay on top of your online reputation. 2. Ask satisfied customers to leave a review. The more reviews you have, the better your SEO ranking and the better your chance to bury the negative reviews. 3. Give unsatisfied customers a direct way to communicate with you. You keep their complaints off the review sites when you give them an offline channel to share their experiences. Address the problem directly and before the CSI survey is completed. 4. Promote your positive reputation. Let customers know that you are the top-reviewed dealership in your area. Use it in your marketing promotion and build an even better online reputation. The next development that I predict is online testimonials, because of YouTube’s integration with Google and our society of burgeoning social media stars. Your service department’s online reputation is tricky, but not impossible, to navigate. Whether you use an online reputation management company or follow up yourself, you are giving your service department a second chance to provide excellent service and correct any problems before the customer has completed the CSI survey.

Logging on at a review site to vent might be the reflex reaction of an upset customer who simply wants to be heard.

“Even using the ‘quick lane’ took an hour and a half. I told the service guy that I needed a new tire and the old one was not repairable, but after an hour they told me the tire could not be fixed and I needed a new one. I asked for a new tire right off but was not listened to. It just took way too long to take off a tire and put a new one on.” — Received by a Ford dealership in Pennsylvania

“Terrible customer service. Who charges $85 to change wiper blades? What about a “$360 package”? $1,000 in suggested repairs? It’s all out of hand. These are the very reasons we don’t bring our 2009 Camry to [DEALERSHIP NAME]. Bring down charges, and we might reconsider.” — Received by a Toyota dealership in Illinois

PETER “WEBDOC” MARTIN President of Cactus Sky Digital Peter is a technology correspondent and digital marketing expert for the automotive industry, and particularly works with e-mail marketing, mobile-enabled e-mails, conquest marketing and selling to women. He is a frequent speaker at industry events such as NADA Digital Dealer, AutoCon and RVDA.

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SEPTEMBER 2015 Service Drive 15

No matter the process, your staff needs to be able to pinpoint the location of a special order part right now.

maximizing the chances A Customer Returns To Have A Special Order Part Installed Try scheduling the installation appointment immediately and assuming the part will arrive on time. BY CHUCK WENZLER 16 Service Drive SEPTEMBER 2015

ouldn’t it be great if all the parts your techs need were at their fingertips, at all hours? But we don’t live in a perfect world, and special order parts are an unavoidable reality. Special order parts can boost your parts department’s gross profit as long as they are sold and installed, but if they are never picked up, they represent one of the largest contributors to parts obsolescence. Studies have shown that if a part has not sold in six months, it has only a 25 percent chance of selling over

the next six months. If it hasn’t sold in a year, the odds are less than 2 percent it will ever sell. Because most special order parts are non-stocked specialty items, it’s easy to imagine them devolving into an obsolescence expense. There are many approaches your parts department can try to avoid that outcome. None that I have experienced is 100 percent effective, but most strategies can and do work to some degree. However, not every process will work right in your unique dealership environment. You want to experiment with an approach

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that you are comfortable will persuade your customer to come back to have the part installed.

CAN YOU RELIABLY TRACK PART STATUS?

All successful processes for dealing with special order parts must begin with a sound electronic or manual communication process that informs parts and service advisors about the status of parts. Many DMSes let the service advisor track the status of special order parts. Without a reliable tracking tool or process, there is no way to properly and accurately communicate with the customer. I have witnessed too many instances of a part sitting on the special order shelf, while NO ONE is contacting the customer to return for installation because NO ONE was informed the part is there. The parts department can take an active role in persuading the customer to come back for installation. At some dealerships, the parts counter staff will use the customer’s preferred contact method, although the call still ultimately must be transferred to the service advisor for an explanation and to schedule an appointment. Or, the parts department might notify service that the special order part has arrived and let the advisor contact the customer, although it is easy for the follow-up contact to be lost in a busy advisor’s day. If the dealership has a service business development center (BDC), its staff could be tasked with contacting the customer and scheduling an installation appointment. However, this requires sound communication from the parts and service departments about what the part is and the necessary installation time, and at that the BDC person may still end up transferring customer calls to service for further explanation.

SET THE RETURN APPOINTMENT NOW

Personally, my preferred approach is to schedule the installation appointment before the customer leaves the dealership. This reinforces with the customer that a part had to be specially ordered, and secondly it simplifies the communication. Let me elaborate. I believe it is safe to say that 80 percent or more of special order parts arrive at the dealership within three to five working days. At the time of active delivery, the customer should be informed of the need to specialorder a part to complete repairs, and appointment for him or her to return should be made. If a service advisor has two customers per day who require a return trip to have a special order part installed, that would be 10 procedures per week. The advisor would aim to schedule the customer’s return visit for within five to seven days. The dealership would need to have a solid process in place to inform the advisors as to the status of the special order parts.

RISK THAT THE PART WILL BE LATE

Since the appointment is already made, the customer would only a reminder by phone, e-mail or text for the 80 percent of parts that arrive in the five-to-seven-day window. For customers whose parts take longer, the dealership would need to make a call explaining the delay and attempting to reschedule the appointment; or to wait and call upon the part’s arrival. Which I easier? I ask: To make a minimum 10 phone calls per week to arrange appointments for installing a special order part (and I write “minimum” because you can bet on a lot of phone tag), or making two calls per week informing customers of a delay. Many service advisors will balk at this process because they are never certain about a part’s status and don’t want to commit to an arrival date. That’s why a

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Setting the installation appointment before the customer leaves your dealership increases the odds he or she will return for the part.

solid process on communicating the status of a special order part is so important. I’ve asked hundreds of service advisors if they believe that 80 percent of their special order parts arrive in five to seven working days, and overwhelmingly their answer is “Yes.” Exceptions – generally involving back-ordered parts associated with service bulletins, product enhancements, field notices and recalls – are usually well-communicated by a dealership. Obviously, the best way to be certain that special order parts get installed is to keep the vehicle until the part arrives. However, this is a real inconvenience to the customer, unless the manufacturer or your dealership provides a rental vehicle or you have a loaner vehicle. (Of course, the ability to do this will greatly improve your customer satisfaction survey scores.)

WHY PARTS DON’T GET USED

Why aren’t some special order parts used, anyway? There are instances when a customer changes his or

her mind about having the part installed. Maybe that customer no longer owns the vehicle or has moved. Unfortunately, a dealership can’t do much other than try to find another buyer for the part. What about those mysteriously ordered parts, the ones advisors tend to request while they are diagnosing vehicles on the service drive (which is a bad idea)? Or, techs might order a part while taking a guess as to what it might take to repair a vehicle. Both of these scenarios can create problems, with customers likely to have to make a third trip in for repairs, because the original diagnosis and part don’t correct the problem. Outcomes: Poor CSI, unnecessary cost to the customer in a customer-pay situation, and the part back on the shelf and eventually becoming an obsolescence expense. To reiterate, the key to successfully turning special order parts into income lies in a rock-solid communication process, both internal and external. It is critical to keep the customer and the service team informed as to the status of special order parts.

“All successful processes for dealing with special order parts must begin with a sound electronic or manual communication process that informs parts and service advisors about the status of parts.” CHUCK WENZLER Consultant and Coach at M5 Management Services Inc. Chuck is a fixed operations professional with more than 25 years of managerial experience. He has worked for several dealerships and later moved into training and consulting, both independently and for AutoNation and M5. He specializes in fixed operations clients at M5.

SEPTEMBER 2015 Service Drive 17

Askthe

Pros:

Do 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 ARE SOME GOOD APPROACHES TO AT LEAST SELL AN EXTENDED WARRANTY TO A SERVICE CUSTOMER WHO HAS DECIDED NOT TO TRADE IN HIS CAR WITH US? – KARL U. IN JACKSON, MISS. John Fairchild, President and Performance Coach of Fairchild Automotive Solutions:

Most dealerships that are aggressive and customer-focused realize that extended service plans are a great deal for the customer and a profit center for the dealership. This is a windfall for the service department, not just in selling the contract. It also keeps the customer coming back and frees that customer’s budget from having to pay for repairs that the service contract will cover. The main two basic approaches I see working are escorting an interested customer to a finance manager who can sell them the right product, or handling the whole transaction in the service department. The key to making either situation a success lies in training, motivating and monitoring employees and keeping it top of mind for the customer. Here are a few considerations: • Teach service advisors to offer customers extended service contracts when a vehicle’s factory warranty is close to its expiration. This is the ‘low hanging fruit.’ Offer a couple (but not too many) of options

and special financing, to make the warranty more desirable. Consider software programs that are out there that will pre-populate desired packages, so all you have to do is ask. • Create and give incentives and “spiffs” to those who sell extended warranty contracts. Continually run a contest surrounding sales penetration to stimulate and maintain excitement. • Be creative about getting the information in front of customers through incorporating it on mirror tags, repair orders and service reminders. Work extended service plan efforts into your marketing and advertising plans. • Don’t forget point of sale. Create and strategically place brochures and posters about extended service plans in customer waiting and write-up areas. • Monitor and revaluate process involvement. Coach, encourage and enforce compliance as needed. By following these pointers with ongoing consistency, I feel confident you will sell a lot of extended service plans and create more completely satisfied customers who return to your shop often.

DO YOU THINK THE POPULARITY OF EXPRESS LANES IS GOING TO CONTINUE, AND WILL DEALERSHIPS INEVITABLY HAVE TO BITE THE BULLET AND PAY FOR ONE? – TYLER B. IN GRAND RAPIDS, MICH.

Michael Roppo, director of fixed operations and training/QPS at Automotive Domain Results: I

understand the hesitance and skepticism many people have when they first entertain the thought of entering into the express service business concept. If it’s done right, many dealers find they should have been in that business way sooner. After they see all the facts, they are impressed that they are now allowed to cater to an additional database of people who would not necessarily do business with the dealership before, improve customer retention and create the opportunity to look at more customer vehicles. Many dealers know they must provide a fast, convenient and competitively priced service in a value-added way to retain more of their customer base for longer periods. They know that oil services and light maintenance are the most required and most requested service jobs, accounting for more than 50 percent of service business at most dealerships. Understanding this alone requires dealership leaders and managers to stop fighting the express service concept! If it’s all about customer retention, and it is. Yes, you have to get past the many industry excuses like: • It will hurt the effective labor rate. • It will tick off my good technicians. • It will hurt the hours per RO. • It will hurt our gross profits. • It will hurt our gross profit percentage. • We can’t make any money in the express service process. We should view the express service business model from a logical standpoint. Logically, if more customers come to your dealership for express services, don’t you think you can create an advantage over your competition in getting their additional maintenance and repair work? Business goes where it’s asked for, and it stays where it’s appreciated and the provider is trusted. We need to realize express service is the gateway to longterm customer retention and profitability.

WHAT DO YOU THINK IS A HEALTHY AND RESPECTABLE PERCENTAGE OF REPAIR ORDERS THAT COMES FROM A SCHEDULED APPOINTMENT AS OPPOSED TO WALK-INS? – ARLINE P. IN OKLAHOMA CITY Ken Rock, corporate training manager and customer support specialist at Auto/ Mate Dealership Systems: There are

different schools of thought on this. Some dealerships prefer to schedule as many appointments as possible, and as a result are unable to service many walk-ins. They may tell you that fewer than 10 to 15 percent of ROs from walkins are ideal percentages. The philosophy behind this is, “better the penny you know you’re going to get, than the penny you don’t know you’re going to get.”

18 Service Drive SEPTEMBER 2015

Personally, I believe 15 to 20 percent of ROs from walkins is a healthy range. Walk-ins and tow-ins are an inevitable aspect of any business, and there’s a lot of value in being able to service these customers. I view every person who comes through the door as an opportunity, whether it’s a repair job or gaining a loyal customer or who knows – that customer may be ready to buy a new car! When I was a service manager, I routinely left 15 to 20 percent of my schedule open every week, and it always worked out well. More important than the precise percentage, however, may be the attitude of your service staff toward walk-ins.

Imagine a customer who is experiencing the stress of an unexpected breakdown. Their vehicle is towed to your dealership, and they are met with a service advisor who just shakes his head and says, “Without an appointment, it’s going to be several days before we can even look at it.” How welcome is that customer going to feel? Compare that experience to a service advisor who is genuinely welcoming, sympathetic and says something like, “Well, we’re very busy today but we will take a look at it and let you know what’s wrong and/or how long it will be.” If that customer has never been in your dealership before, it’s important to make a good first impression, because you could win that customer for life!

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Super Charge Your Service Drive! Increase Service Sales Up to 40% or More!

In Your Dealership or at our Training Center— Whichever Works Best for You … Learn How To Gain These Benefits • Reduce 1-Item Repair Orders • Write 3.0 Hours Per Customer Pay Repair Order By Using These Strategies • Stay Off Price and SELL More Appointments • Avoid Diagnosing and SELL More Appointments

Your People Will Master the 12-Step Customer First Service Drive Process … Selling Techniques 1. 2. 3. 4.

Meet and Greet the Customer Determine the Customer’s Needs Conduct a Vehicle Walk-Around with the Customer Select Services (Menu & Inspection)

Implementing the Sale 5. Make a Feature-Benefit Presentation 6. Get a Pre-Approval for Repairs at Time of Write Up 7. Trial Close Every Presentation Confirming the Sale 8. Review the Sale with the Customer 9. Overcome Objections 10. Close the Sale Continuing the Sale 11. Schedule Next Appointment 12. Actively Deliver the Vehicle to the Customer

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Hopefully, this trainer would have been one of two to five that your company checked out.

The Same Framework Can Guide Your Dealership

In Evaluating A Vendor For Any Kind Of Training Needs assessment/evaluation/selection is the roadmap to smart hires and weeding out vendors that don’t fit. BY TOM KUKLA

our dealership has enjoyed solid growth over the last four quarters. It has expanded, and now you have key people in new positions and new people in key positions. You want to keep the growth train chugging along, so your dealer wants to ramp up training in both the sales and service departments. Help is needed to design and deliver the training. Obviously, there are lots of ready and willing training vendors out there. But, before you stroke a check: How can you be confident you’re making a smart hire? The dealership industry is a major buyer of training services, and believe it or not, there is a framework or process your dealership can follow in picking a vendor for any type of training. It is a three-step process with needs assessment, evaluation and selection. Each of the three steps has an easy-to-follow checklist, with questions to help you perform due diligence when picking a training partner. Let’s start with needs assessment. After all, before you can train, you must decide what you need to train.

NEEDS ASSESSMENT CHECKLIST

First, identify the problem you are trying to fix. Is it truly a training issue? For example, say turnover rates in all departments are above the industry average and hurting the bottom line. Maybe a new onboarding procedure is needed rather than training managers on hiring practices. Be specific as to how this problem affects the employees and the business.

20 Service Drive SEPTEMBER 2015

 What skill training is involved? Does the

• • •

problem affect current skill sets? • •

•

Are new skills needed, e.g. dexterity with social media? Are new techniques needed with current skills sets, such as selling to a millennial vs. selling to a baby boomer? Is there a gap in leadership/management training? - Which dealership departments are involved? - Who from each department should participate in training? - What are your expectations for the training’s outcome? What will “success” look like? - What is your training budget? - What is the deadline for completing training?

EVALUATION CHECKLIST

Look at multiple training vendors. But, how many should you examine? Try more than one but fewer than five, and evaluate vendors based on:

 Training topics and offerings – what are they? • • •

 Have you faced this problem in the past? If so: • • • •

How did you address the training issue before? What training firm did you use then, if any What were the outcomes? How satisfied were you?

•

 What do you believe is the best training

methodology, or combination of methodologies, to provide the desired outcomes, by the deadline and within budget? For example, does your team tend to respond better to live coaching than videos? • • •

Half-day, full-day or multi-day live training One-on-one coaching Group coaching

Webinar Video training Other



Are the vendor’s topics a good fit with your needs, and timely? Are the vendors sufficiently diverse with their offerings, or do they only train on one topic? Has the vendor updated its training menu over the last two to three years? Your dealership’s way of doing business has changed during that time; is the vendor innovative enough to help you? - It is different training a 40-year-old than a 20-year-old - Ask the vendor how its training programs have changed

Training methods – What can each vendor offer? • •

Can the vendor pick from among diverse training methodologies? Is there one methodology that is a best fit for your needs and budget?

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 Personality, style and presentation • • • •

• •

Is this vendor a good fit for your dealership? Will participants look forward to spending time with this trainer? Is the trainer enthusiastic about the topic and opportunity? Is the trainer curious, asking questions about your dealership or employees? - Or, does the trainer seem to assume he/she knows everything? Is the trainer a good listener? Is the trainer observant? - Like a good sports coach, the trainer should want to observe first-hand what’s going on in your dealership rather than just suggest a curriculum - Does the vendor suggest an initial on-site visit?

 Size of the vendor •

Size is NOT important. Dynamism, adaptability, resilience and innovation are.

 Follow-up and your future needs • • •

How does the vendor say it will follow up to assess if training “sticks”? Is this vendor so dynamic that you can envision working with the firm five years from now? Will the vendor provide reinforcement tools and materials for after the training?

FINAL SELECTION CHECKLIST

You’re down to a finalist, but you’re still unsure. What other assessment steps can you take?

 Test drive – Is the vendor willing to perform a

- Would you hire the firm again? Why or why not? - Are there any other comments you would care to make that might help in our decision?

complementary, modified program? Perhaps a limited audience or shortened version? •

After giving a test drive, would this firm suggest a different type of training than was originally proposed?

 References – Do they check out? •

•

Check multiple reference sources BEFORE making the final selection or committing to a contract Check with your peers, the vendor’s current clients and/or former clients. As a general rule, checking two to three references is fine Be as specific as possible when checking references - Ask for dealerships that needed a similar training solution Questions to ask references - When was the last training you received from this vendor? - Who delivered that training? - Was the content relevant and timely? - Was the pricing fair?

 References check out, and you’re ready to move forward •

The final piece is to ask to see the training curriculum in advance - Pre-work - Slides - Handouts - Agenda - Timing of deliverables

MOVING FORWARD

I believe that consistently following this simple framework of needs assessment, evaluation and selection will help tremendously in making a smart selection of a training vendor for any type of training your dealership needs. Good luck!

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, he 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, he offers organizations management and leadership workshops, seminars, training and coaching. You can reach Tom at tom@credereleadership.com and visit his website at LeadershipIsInfluence.com.

A courtesy inspection should be performed within 20 minutes of the car entering the service drive.

Try Performing A Basic Service Inspection Immediately,

Then Prioritizing Work Your Customer Needs How you communicate and how you move through pricing options affect how much service work will be sold today. BY JOHN FAIRCHILD

very customer who pulls into your service department deserves to know the overall condition of their vehicle, each time he or she visits. As a matter of safety, a check of the vehicle’s critical operating systems can give a customer some piece of mind and ability to plan for future needs. During each visit, the service department should perform a courtesy vehicle check-up and deliver each customer a report card. From the results of that check-up, and accounting for the customer’s history and driving habits, you should develop a prioritized presentation that addresses the principal concern; any other safety or performance issues that should be addressed right now; and what maintenance is due, past due and coming up.

22 Service Drive SEPTEMBER 2015

How this information and available options are communicated to the customer is critical to his or her understanding the importance and urgency of your recommendations. Armed with this information, the customer can approve the work according to his or her needs, wants and budget.

DO THIS INSPECTION IMMEDIATELY

A service advisor is much more effective in communicating with customers who WANT to listen. If you are bringing to their attention additional, legitimate services needed while they already have been kept waiting too long or can see their vehicle in the ready lane, then

that information most likely will fall on deaf ears. Regardless of the nature of the visit, make sure your techs are performing the courtesy inspection FIRST, within the first 10 to 20 minutes. Now, If a customer needs a repair fixed immediately, then wait until that main concern has been diagnosed and then provide everything at once – both an explanation of the repair and a summary of the check-up. However, if the customer is in for a maintenance visit, then discuss the findings of the inspection immediately and regardless of what he or she decides, leave a copy of the inspection to review and ponder (or to call the spouse for permission). Reset the customer’s expectation of how much longer the total work will take, based

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Sample Of A Prioritized Presentation Worksheet Customer: Joseph Smith Customer’s Main Concern

Total

Replace tail shaft seal

350.00

199.95

549.95

Associated Repairs/Services (Recommended) Transmission service is past due by 26,000 miles

Subtotal for main concern and associated repairs/services

Services Found In Inspection That Are Needed Now

Total

Coolant service is overdue by 26,000 miles

139.95

Front brake job - pads down to 2 MM

189.95

Brake fluid exchange service

99.95

Subtotal for services found in inspection and associated repairs/services

429.85

Total for all work

979.80

Associated Repairs/Services (Recommended)

Preventive Maintenance Due Now Or Needed Soon

Total

Tires in the “yellow,” i.e. 5 mm; will require attention soon - MichelinX4

596.14

89.95

Associated Repairs/Services (Recommended) Alignment

Subtotal for preventive maintenance

686.09

Total for all work

1,665.89

Approved By:

on the decision about which work to complete now or postpone. To be effective, this approach must be employed with unwavering consistently, and the inspection done with the utmost professional quality. And, you must have prepared the customer by letting him or her know that the inspection check-up was going to be performed in the beginning. This reduces the chances of customers’ indifference once your advisor brings up needs about which they weren’t thinking or didn’t realize were an issue.

ORDER OF THE PRESENTATION

The first element of your presentation must cover the principal concern with this vehicle. No one wants to hear ANYTHING about additional needs before the reason for bringing the vehicle in to begin with is discussed. At the same time, you should address any work needed to make the repair complete and enhance the quality of the customer’s experience. For example: Say the car has a fluid leak that turns out to come from a faulty transmission tail shaft seal. If the transmission also happens to need to be serviced, include that recommendation in a cohesive summary:

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“To address the reason you brought the car, we need to replace the tail shaft seal and also service your transmission, which is past due”. Note: Do not yet break down parts and labor, and do not give the estimated price for these repairs. I’ll explain why not shortly. Next, review those items on the vehicle that the inspection found are in good condition and not needing attention, as your advisor assesses its general condition. The point is to give your customer context as to the value of your recommendations for keeping his or her vehicle in good shape. You are also providing reassurance that the work is a good investment. Then, inform your customer about anything needing attention right now and that will affect their safety or the vehicle’s performance, and about any work that is

overdue. For example, the front brake pads are worn to 2mm, and the brake fluid has deteriorated and hasn’t been serviced for more than 24,000 miles. Presenting these two conditions together will make more sense, as they are interrelated. Once more, do not give the price of these items just yet. Finally, you should present preventative maintenance, upcoming services and wear items at half-life (i.e., in the “yellow”). A lot of customers will consider having this work performed now out of convenience. If they don’t, you will at least have planted the mental seed for subsequent work. For example: “The tires are at 5 mm, which is not below the 4 mm mark where we would say to replace them now, but it’s close.” In this case, you should offer to replace the tires now, to give an alignment, and to nitrogen and road hazard services if your store offers them.

OFFER PRICING OPTIONS

Here is why you should not discuss pricing until you reach the END of your presentation. It is much easier to subtract, if needed. If you reveal the price for the first category of work, then chances are your customer may not even hear the rest of your recommendations – and certainly not the sense of urgency you are trying to communicate. If your customer does not approve paying for the entire batch of work discussed in your presentation, then offer an option by moving up your list to the next subtotal, as I’ve shown on the sample worksheet accompanying this article. Taking all of this into account, here is how a concise presentation might sound: “We diagnosed the reason that your transmission is leaking, and it turns out the tail shaft seal is faulty and we need to replace it and service the transmission. That will take care of your main concern. “As we discussed this morning, my tech Jason also did the inspection, and in general your car is in good shape. There were a couple of items that need to be taken care of now. Your coolant service is past due by around 26,000 miles, and your front brakes are down to 2 mm. We’ll service the coolant system and for your brakes, we will resurface the rotors, replace the brake linings and replace the fluid with fresh fluid. “Finally, your tires are reading 5 mm, which is in the ‘yellow.’ But, we have some tremendous deals on tires, so I figured replacing your tires and an alignment. The grand total to get everything done today is $1665.89.” At this point be silent and let the customer respond. Remember to offer any special financing deals you may have. If the grand total is declined, immediately offer a prioritized alternative (moving up your presentation to the next level), give the new total and let the customer respond again. Personalize the Plan B with an approach like this: “Okay, if it was my car and I couldn’t do all of the work today, I would postpone the tires and alignment and do the rest. That total is $979.80. Is that the way you would like to proceed?” By offering a prioritized presentation using the steps I’ve outlined, you are likely to sell more complete work estimates. And, you are giving your customer relevant information in a way that it can be easily digested.

JOHN FAIRCHILD President and Performance Coach of Fairchild Automotive Solutions John has more than 35 years of experience in fixed-operations management and consulting, and trains fixed-ops staff to improve performance and customer service. He started working in auto repair and parts at age 15 and over time held numerous positions at dealerships, including general manager. Visit the website https://fairchildautomotivesolutions.com.

SEPTEMBER 2015 Service Drive 23

Start Critically Reviewing

The Frequency Of Every Service Labor Operation You Perform, And Today

“Imagine what the return might be at your dealership if every service labor operation on your list was given the same level of attention.”

It will expose when your advisors are failing to suggest work that the customer needs and benefits your dealership. BY ROB GEHRING

24 Service Drive SEPTEMBER 2015

ervice advisors in today’s dealerships serve as a critical component in fixed operations performance. Customer retention and satisfaction in the service department is directly related to developing the “customer for life” that every dealership desires. If your customers are satisfied with their service experience, then the vast majority of them will price their next vehicle purchase at your dealership first. The difference between a good advisor and a poor performer translates into hundreds of thousands of dollars in annualized parts and labor sales revenue. There are many ways to measure advisor performance; however, in this article I’ll discuss developing a quantifiable process that I believe can make all of them superstars at your dealership. Most DMS programs for dealerships produce a report

that will illustrate the dealership’s labor operation (“labor op”) frequencies. It will illustrate at a glance, for example, that oil changes are the most common labor op that the dealership performed during a selected time interval. The list can bring to light an incredible number of opportunities for lmprovement at your dealership.

ARE SOME LABOR OPS SUGGESTED AT ALL?

For example, looking at your list you will likely find your service staff is performing a fair amount of tire rotations. However, when might find the number of tire balance operations very low in comparison. There’s no question that tires wear down and should be balanced

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every 20,000 miles or so, to extend their useful life. If they are never balanced, eventually when they are rotated they will produce a vibration when a vehicle is driven at highway speeds. Logically, your customer will become irritated that his or her car starts vibrating after it was brought in for service. Your service department will be blamed. The customer definitely won’t expect to pay for the fix, which is to balance the tires. However, if this individual had been offered both a rotation and balance – with the expectation that tire rotation would be prolonged and the chances of vibration when changing tire position minimized – then imagine how different his or her attitude would be. I bet that customer would be apologetic and ask how much would you charge to correct the poor judgment they showed in not accepting your offer for a tire balance. Givens this logical scenario, you have to wonder why this tire balance labor op is such a poor performer for the dealership. The sad reality is that it probably isn’t probably isn’t being offered at all (looked at with rose-colored glasses, you might say your advisor staff’s presentation of benefits presents an area of opportunity). Typically, I find either the manufacturer doesn’t recommend a particular labor operation, or the service staff doesn’t believe in its value.

LOOK AT DESIRED FREQUENCY, OTHER FACTORS

As it happens, most manufacturers of auto maintenance products like BG Products Inc. make dip strips that measure the copper content of fluids. The tool I love is a battery-operated strip that measures the percentage of water in brake fluid. It lights up red if the water content exceeds 3 percent. I visited a service department client where only two brake fluid changes had been performed over the prior 12 months. During the visit, we implemented a process in the service drive in which this tool was used to check every vehicle as it came in for work. This dealership sold 30 brake fluid flushes over the next month alone! That extrapolates into an additional $43,200 over the next 12 months for this one labor op improvement.

GIVE EVERY OP SAME ATTENTION

Imagine what the return might be at your dealership if every service labor operation on your list was given the same level of attention. A best practice is to select one labor op every week and gather the service team for a

meeting with role-playing feature benefit presentations, based on suggested mileage intervals for that labor op. Once every operation is covered, start the cycle again. The point is to keep your team focused on becoming the professionals your dealership needs, acknowledge the improvements and discuss the opportunities. If your dealership implements this program, I believe you will find that every key performance indicator in your service and parts departments improves dramatically. Your service team will become confident about recommending needed maintenance items and better care for their customers. Your customers will become more educated about why these maintenance procedures should be performed on their vehicle, and feel about better spending the money with you. Your techs’ efficiency and productivity indicators will climb as their on-task hours and income rise. The days of your advisors saying, “You’re due for a transmission flush,” and believing they have done their job properly by simply recording that the customer declined, have got to be put behind you.

Simply bringing critical labor ops to a customer’s attention, consistently, makes a huge difference.

Before you can determine the causes for an underperforming labor op, you must first decide what is an acceptable frequency. For example, start by determining at what mileage intervals is it reasonable for your service advisors to make recommendations to your customers. Does your team consider it reasonable to offer a fuel system cleaning treatment every 15,000 miles? Is your technician compensation adequate for that particular labor operation? Would there be acceptable profit to the dealership after the parts are purchased and the tech paid? When you thoroughly review of labor op performance, you must examine all factors that help you understand performance in total. I have found dealerships that service a large number of pickup trucks rarely perform differential services to replace fluids. On a four-wheeldrive pickup truck, two differentials and the transfer case each have fluids that need servicing. Handling all three of these fluids changes on a pickup would cost several hundred dollars, so the dealership must explore why it is not performing more of these services for its customers. How could hundreds of pickup trucks come through its service department every month, and only a few differential fluids packages be sold? Before concluding your examination of your dealership’s list of labor operations, you need to ask yourself this question: “Does my advisor team perform a standard feature benefit presentation consistently on every labor op?” The only acceptable answer to this question is “Yes.”

ONE OP MAKES BIG DIFFERENCE

Let’s use a further example of a brake fluid flush. Some manufacturers believe that brake fluid should be changed every two years or 30,000 miles; others don’t include it as a recommended maintenance procedure at all. Service staff have their own viewpoints on the value of changing brake fluid, but the reality is that fluid will draw moisture due to its chemical composition. As water infiltrates brake fluid over time, moisture content will exceed 3 percent. Now, perhaps your service department might not even offer this service or have the equipment to perform it. Your techs might insist some of the bleeder screws get rusty and cause more trouble than the labor operation pays, so they won’t recommend it. Or, maybe your service advisors will refuse to recommend changing brake fluid if it isn’t in the owner’s manual.

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ROB GEHRING President and Founder of Fixed Performance Inc. Rob’s company specializes in training engagements for dealership fixed-ops clients throughout the U.S. and Canada. It aims for dramatic and profitable improvements in a dealership’s fixed operations in both processes and people. He also writes a free weekly newsletter and holds a free weekly conference call on fixed operations topics.

SEPTEMBER 2015 Service Drive 25

Think service staff arenâ&#x20AC;&#x2122;t the kind of people who come across as engaging and trustworthy on social media? Think again.

social media Are Where Dealerships Should Showcase Their Service Employees, Not Just Their Service Departments Advisors and techs tend to translate online as both competent and human, so leverage those traits. BY LAURA MADISON 26 Service Drive SEPTEMBER 2015

ll over the country, dealers and salespeople are trying to generate sales business off social media platforms where prospective customers are doing research, catching up with friends and frankly spending an incredible amount of time. These dealers and salespeople understand that building the kind of relationship that leads to a sale can

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be supported by connecting with prospects on their favored social platforms. However, how can the service drive – often the most profitable department in the dealership – capitalize on social media to connect with customers? Put simply, dealerships could allow and encourage their service employees to become more personally visible (as opposed to promoting the features of the service department) on social platforms. The opportunities for dealership service departments to leverage social media lie in the power of relationships. A customer’s ability to make a human connection with the service drive is incredibly impactful. Introducing the people (your service advisors) behind the job of servicing a vehicle begins to build trust with and loyalty from your customers. From a purely pragmatic viewpoint, that makes a lot of sense in a marketplace in which it can cost up to five times more to earn a new customer than to retain one you have.

WORK WITH EXISTING FACEBOOK PAGE

So, how should your service department humanize its advisors over social media? Start by showcasing your service advisors and techs under the umbrella of the dealership’s existing platforms like Facebook. Try posting pictures of service personnel in action in the drive, valuable advice from service advisors about maintaining a particular make and model, or a personal profile of a service employee with a recommendation to call him to arrange the next service appointment. Establishing a personal presence for your advisors is a productive way to increase the service drive’s visibility and encourage customer retention. By adding the ability to communicate with the advisor on social media, the dealership’s social presence takes on a more personal tone, which leads to relationship- and trust-building. And, service-related posts added to your dealership’s Facebook page will help keep the dealership top-ofthe-mind in the social realm, hopefully leading to a customer thinking of your dealership the next time he or she is due for an oil change.

ADVISORS, TECHS PERSONALIZE WELL

Service advisors actually are marvelous employees to feature and collaborate with on social media. They typically display the kind of skills and personality traits that translate to a fierce social media presence. By and large, advisors as a group are people-focused with strong customer service skills, patient, helpful and articulate. These traits and skills are key to communicating well on social media with a simple, clear post. Service writers also tend to be a knowledgeable group, which is important when it comes to creating content to post on social media. To give customers a reason to connect with the dealership and service drive, your presence must be established as authoritative and characterized by sharing helpful and valuable information for vehicle owners.

WHAT KIND OF CONTENT IS HELPFUL

A social post that helps answer customers’ frequent questions or provides them guidance helps the service department position itself as a worthy online

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“Service advisors actually are marvelous employees to feature and collaborate with on social media. They typically display the kind of skills and personality traits that translate to a fierce social media presence.” connection. The great news is, the opportunity to provide guidance from the service drive is endless. Some examples: A 30-second video explaining how to pair a phone to the Bluetooth system, or a similarly quick video of how to start a push-button vehicle when the battery in the smart key is low. Or, post a reminder that the manufacturer recommends service at 60,000-mile service and a warning of the potential consequences to skipping this appointment. Give an explanation of what a particular vehicle’s common dashboard lights mean. Anything a dedicated service advisor posts that provides insight or guidance to a prospective or past customer is extremely powerful. Think of it as the giver’s gain; the person at the other end of the social connection may feel indebted to your dealership the next time he or she is due for service. The law of reciprocity states that people respond to a positive action with another positive action. A simple social presence featuring a few of the dealership’s service personnel can be an extremely effective way to win more business. It’s impactful. Again, there is amazing opportunity within the service department to share valuable content. Get creative! Themed posts like #MechanicMonday or #TechnicianTuesday are great opportunities for your followers to receive quick tips on how to keep their vehicle running smoothly between services.

TARGETED PROMOTIONS WILL RESONATE

Valuable content also can include any promotions that may benefit a prospective customer. Allow a service advisor to announce a special offering – like a “buy three, get one free” tire deal – by posting a photo of the advisor and an explanation of the promotion, with a phone number to call for details. If there is something

unique your service department offers – for example, roadside assistance for 90 days following a service appointment – then here is more valuable information to share with your social followers. Within this personal social presence also exists an opportunity to increase visibility for the drive and earn referrals. Once clients start interacting with posts, asking questions, liking and commenting, your service presence becomes more visible to their connections and followers. This means people who have never visited your dealership’s service drive are exposed to your posts and witness the nod of confidence their friend has given to you by following and engaging. A presence on social media is a huge and noticeable differentiator. So few dealerships are doing this that even a small effort by a service department really stands out. This can all begin, and be managed on, the dealership’s Facebook page. That page can become a resource where the dealership posts answers to FAQs, behind-the-scenes photos of service techs working on vehicles, quick how-to videos, and so much more. Enlist help from the marketing director or other person managing the Facebook page to help facilitate these posts. For a service drive just getting started with social media, posting two to three times a week is enough to begin building attention and awareness. Finally, remember to personalize this presence. Post photos of your advisors and techs. Share details about what they drive and why they love their jobs. Any helpful post such as a reminder to have tires rotated every 5,000 miles should end with a service advisor posting his name or initials, so that the reader almost unknowingly feels a stronger connection and feeling of trust with your knowledgeable service staff. Each service department will ultimately develop its own unique social presence that reflects their personality and character. Just get started today. There is magic in action.

LAURA MADISON National Director of Sales for Alan Ram’s Proactive Training Solutions Laura is a former auto salesperson and now specializes in use of social media and personal branding by dealership clients. She has developed a “social selling” training course on how salespeople can effectively use social media and a personal brand to win more business. She has been featured in Automotive News and Advertising Age and on Edmunds.com.

SEPTEMBER 2015 Service Drive 27

mobile apps Can Fuel A Service

Departmentâ&#x20AC;&#x2122;s Customer Acquisition And Retention Establish a new link with customers delivering targeted offers, detailed service reports and more. BY RICH HOLLAND

Special service offers could be sent to this customerâ&#x20AC;&#x2122;s smartphone whenever he drives near the dealership. 28 Service Drive SEPTEMBER 2015

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n today’s automotive marketplace, businesses must be mobile to compete. After all, 90 percent of American adults have cell phones, 65 percent of which are smartphones. And, Google Analytics predicts that by 2020, there will be 245 million smartphone users in the U.S. alone. The always on, always with you, always connected nature of smartphones isn’t just a trend. Their incredibly useful apps are fundamentally changing how consumers purchase, service and repurchase just about every product and service out there – and shape their expectations of companies from which they buy. Meanwhile in the retail automotive industry, the vehicle service interval (average span of time between service appointments) continues to increase. In fact, it grew to 185.2 days from 181 days in 2014 alone, and those lost days of service revenue cost dealership groups an average of $85,650 annually, or $20,400 per store. Dealerships have help from mobile app technology in their battle against the growing service interval, and their efforts to boost customer retention – if they choose to embrace it. The cost of modifying an app to their needs can be less than $9,000 per year per store.

HOW APPS SERVE DEALERSHIPS

Mobile app technology is currently the most important channel of customer connectivity available to the modern business. According to recent Nielsen data, 89 percent of consumer mobile time is now spent in apps. With 51 percent of all digital time spent on mobile devices, as opposed to desktops (42 percent) and all other devices (7 percent), that’s a whole lot of customer engagement just waiting to happen. One of the best ways for dealerships and other businesses to leverage this technology is by offering a business-branded app for their customers to download. For example, dealerships now have access to customizable mobile apps they can modify and rebrand. An example is DMEautomotive’s Driver Connect app. These apps not only are very useful for customers, they also enable dealership service and sales teams to build an easy and trusted connection with those customers. Dealer-branded mobile apps also help dealers combat the increasing service interval by going right where consumers are engaging the most and most often: on their smartphones. Apps like Driver Connect are designed first to improve customer retention and service, secondly to market products and services that help with customer retention, and thirdly to sell vehicles. They help dealerships send their best “bring ‘em in and get ‘em spending” offers, which customers can save in their mobile wallets to redeem at their next service visits. Along with these deals, dealers can offer a loyalty program to further drive retention and increase share of garage. Special offers through apps also pull customers away from attractive competitor offers. Through multilocation “geofencing” capabilities, dealers effectively can set invisible perimeters around their own lot and around competing stores. The app will automatically send customers a special offer whenever they come within a given distance of these locations. Driver Connect also includes an array of useful vehicle ownership tools (including a flashlight, digital parking meter and car location) that help with the app’s “stickiness” and keep customers engaged on a regular basis. Plus, it offers a menu of services intended to generate still more engagement between the customer and the service center. For example, customers can use the app to read services that are needed and their vehicle’s complete service history, schedule a service

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Service inspection reports delivered via app will keep this woman informed and happy. appointment, receive a “vehicle ready” notification and even pay their invoice from anywhere, 24/7. Beyond the convenience factor, mobile tools let dealerships increase their service and sales revenue and customer retention. A 2014 study by DMEautomotive found that customers using Driver Connect were 73 percent more likely to purchase a vehicle from the dealership, spent up to 7 percent more when they did buy a vehicle, and then scheduled 25 percent more service appointments than did customers without an app. Another study, of 307 dealerships, found a dealership received an average $144,000 of incremental service revenue for every 1,000 app users.

CUSTOMIZING SERVICE REPORTS

Engaging today’s “always on” consumer is no small feat, and the service department need not have to go silent during the time of a service visit, either. One app that lets customer interaction can continue while a car is on the lift is AutoPoint’s OwnerCare. OwnerCare funnels personalized, interactive service reports to motorists via text or e-mail. These reports include multi-point inspections (including “failed,” “caution” and “passed” points) that feature colorcorrect stock images of the appropriate vehicle. Then the app visually maps the recommended work on failed components in the vehicle’s engine, interior or exterior. It also can provide educational videos and articles, so that customers get an array of tools to make informed decisions about their vehicle service. Meanwhile, OwnerCare also can make life a little easier for the service department, and increase efficiency and productivity. Service recommendations

that the customer approves are electronically submitted back to the AutoPoint platform and logged. The service advisor, tech and parts department are notified that work can begin, thus eliminating phone tag with the customer. Subhead: Apps Can Drive Service Business From the first purchase to the repurchase and all the lucrative service visits in between, apps have the power to hook customers and keep them coming back again and again. After all, the White House Office on Consumer Affairs estimates that on average, loyal customers are worth up to 10 times as much as their first purchase. However, it’s not easy to hook and retain the modern customer. With all of the visual and auditory noise cluttering the marketing world, it takes a superconvenient, hyper-targeted marketing strategy to clear the mechanism. Fortunately, mobile apps can offer that focus, and more. Perhaps most importantly, a smartly purchased and adapted app will pay for itself several times over for a dealership. The numbers make it clear: Mobile apps are not facing away. A dealership armed with a start-to-finish strategy connecting itself to customers at every stage of the vehicle ownership and service lifecycle wields the ultimate competitive advantage. Garnering the prime real estate on a customer’s smartphone screen means dealers have the chance to engage a powerful audience over the device that never leaves their side. With all the business apps available have been proven to drive business, the only question that remains for today’s dealership is: What are you waiting for? Get ‘appy!

RICH HOLLAND Managing Director of AutoPoint As a frequent speaker on the future of automotive dealership service, Rich believes in an “adapt-or-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.

SEPTEMBER 2015 Service Drive 29

You need to be on top of your department’s exception report every day.

Profit In The Service And Parts Departments

is not a happy accident Follow these deliberate and calculated steps to manage your way to net income. BY MICHAEL ROPPO

rofitability rarely happens by accident in our industry, at least not when everyone in each dealership department pays close attention to the critical performance indicators that drive their business in any economy. I call this “intentional profitability,” which is a planned, management-driven process. It is operating your department or dealership like entering a race – a race you intend to win. The hardest parts about running a service business (in which people are the revenue-generators) are communicating expectations and managing people and processes with integrity, over and over again, without coming off as a dictator. Repetition is the mother of skill, and a laser focus on the activities below will help you to generate more profitability in the service and parts departments “intentionally.”

30 Service Drive SEPTEMBER 2015

KEY SERVICE DEPARTMENT ACTIVITIES � Review the service exception report daily. Exception reports help decision-makers (managers) save time, so the managers can move swiftly to resolve potential problems and profit leaks. � Try to eliminate one-line repair orders. One-line ROs are a good indicator that service advisors are just taking orders and may need some training or guidance on more effectively selling services. � Train your service advisors to sell suggested and required repairs and needed services, on a regular basis. The principles here are to offer

suggested repairs in order to persuade the customer to set up the next appointment, and to get the required repairs taken care of during the current visit. � Consider implementing a pay-for-performance plan that will help all advisors be more forward about presenting suggested and required repairs to every customer. When those repairs are needed, that is! Presenting additional valueadded services should be both a general goal and a performance metric for your advisors, as reflected in their pay plan. They should be compensated based on appointments set, effective labor rate retention, hours sold, highest sales and gross producer, etc.

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� Have the top salesperson on your service staff daily train the other advisors about how to sell value. Each and every customer who comes into your service department expects to be served in a value-added way. Customers logically expect to pay for value, so make sure your staff communicates a level of value (features and benefits) that is commensurate with what you intend to charge. � Analyze the amount of service work vs. the number of techs in your shop. Make sure the work is being scheduled and distributed properly. This advances the abilities to sell more value and get work performed properly in a timely fashion. � Is it possible to increase the number of ROs per tech? Can the dealership maximize the number of hours on a repair order by making sure the technician’s skill level is in line with the repair’s complexity? This allows techs the opportunity to work on more vehicles. � Focus on the number of hours produced per tech, per day rather than on number of hours per RO. Create a minimal acceptable performance (MAP) guide for every technician and aim for a distribution of work that supports a MAP for 100 percent productivity. Topproducing technicians can produce at more than 125 percent, i.e. 10 to 12 hours of paid time hours in an eight-hour day. � Capture e-mail addresses of all service customers. Customers change their contact information all the time. Therefore, your people should ask review questions that help make sure all pertinent contact information is accurate and updated regularly. � Make sure your service menus are up-to-date and that every customer is aware of his or her scheduled maintenance requirements. Looked at one way, menus are value-added services that must be presented and communicated to all qualified customers. It gives your service department an opportunity to bundle services, as well. If the customer benefits come first, then profits will follow.

� Don’t discount labor provided to your dealership’s used department. However, do offer that department special pricing for related repair services. � Get a report early each day about how many unsold hours are available, and develop a plan to fill them: Understanding your minimal acceptable performance (MAP) lets you schedule properly and distribute the work based on the skill-level requirements of the job as well as of the technician. There is no reason you cannot maximize the available hours in a7 day for every tech.

KEY PARTS DEPARTMENT ACTIVITIES  Review the parts exception report daily. Again,

exception reports help your decision-makers save time, so they can move swiftly to resolve potential problems and profit leaks in both the parts and service departments.

 Manage

days’ supply of parts inventory. According to the NADA industry guide, it should be 45 to 60 days. This is an important factor that drives the service department’s ability to service vehicles on time

 Return

parts that are not turning. To be successful, parts managers must address parts that are not turning throughout the product’s life cycle.

 Require a deposit or credit card imprint for all

special-order parts. Doing so will discourage people from ordering parts about which they change their mind or look for a better price from another source.

 Is

your freight expense being recovered? Make sure the costs of freight and shipping are calculated and added to the cost of the part. Make certain the parts department is collecting at the appropriate rate of ROI.

 Don’t discount parts sold to your used vehicle department. As in the service department, there is no need to discount parts that sold on internals.

 Review your credit policies and manage your

accounts receivable. With so many uncertainties in the retail automotive business, make sure you don’t overextend credit allowances and hamper your cash flow as you struggle to collect. Make sure customers are making regular payments in a timely manner, and all accounts are kept current.

 Are you extending credit to customers who are

delinquent? Stop doing that! It is hard enough to keep the regular customers current. Why take the chance a previously delinquent customer will fail to pay you again for parts. Make better decisions on a case-by-case basis.

 Consider requiring wholesale accounts to pay by credit card. Credit card payments on a regular basis are a recipe for current accounts.

Track hours produced per tech/per day rather than minimum hours per RO.

� Call the day before to confirm all service appointments. Doing so lets you ask additional questions that could lead to more business (e.g., “Is there anything else that we can do for you during that service appointment?”). � Call no-shows to reschedule. Beyond increasing the chances that you will keep the previously scheduled work, this will keep your staff clued in on why the customer could not keep the original appointment and possibly provide some important insights. � Use your service drive to display vehicle specials. Have those specials posted on a daily basis. This allows the dealership to market special vehicles and services to more customers regularly. � Analyze your service pricing override reports on a regular basis. Make sure that indirect discounts (i.e., unintentional discounting) are not happening routinely. You want service and parts margins maintained at a level that benefits both the customer and the dealership.

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MICHAEL ROPPO Director of Fixed Operations and Training /QPS at 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.

SEPTEMBER 2015 Service Drive 31

Service Managers Can Learn A Thing Or Two From Grocery Stores In Appealing To

women customers Inexpensive outreach in these six areas can make a huge difference in transforming your service drive to a destination. BY ANNE FLEMING

hat do grocery stores and dealership service drives have in common? They both provide tremendous opportunities to engage women customers by providing comfort and convenience features. The better and smarter grocery stores engage their customers with extra services for a one-stop, timesaving experience that goes beyond just shopping for food. Examples are cafes, in-store banks, and mailing and dry cleaning services. Automotive service centers are the perfect place to imitate this concept, since customers have only two choices while their car is being serviced: Wait, or leave and return. So, what additions can your dealership make to its service center to provide extra convenience for your women customers and improve customer retention? There are plenty of ways to provide engaging and unexpected services that let your women customers know they are important. Following are several possibilities to consider.

BEYOND COFFEE MACHINES

In today’s service industries, it should be obvious that the old coffee machine just isn’t sufficiently welcoming anymore. Single-serve coffee machines make a great impression with a wide variety of coffees and teas. Plus, bottled waters and healthier snacks for both women and children are really just the most basic place to start. Nice refreshments are an absolute must, but great retention efforts require a bit more effort. To truly welcome and impress your women service customers, take the extra step with gourmet snacks and beverages and updated décor (think airline lounges), which go a long way toward leaving a lasting, positive impression.

32 Service Drive SEPTEMBER 2015

COMFORTABLE SURROUNDINGS

“There are plenty of ways to provide engaging and unexpected services that let your women customers know they are important.”

Most women customers’ days are filled with juggling jobs and family responsibilities, with long task lists. When they need to bring a car in for service, it is rarely a welcome event in their schedules. Your dealership, however, can do a lot to change that reaction by providing:

 A business center. Your women customers may choose to work while they wait for their car and bring a laptop, tablet or smartphone with them. Designate a semi-private area where they can work in quiet (complete with electrical outlets and phone chargers) and catch up on tasks while away from the office.

 More quiet spaces. Also consider adding a room

where they can relax, away from the noise that accompanies a service area. Include comfortable chairs, yoga mats and exercise balls. This miniworkout room can provide what a woman needs to relax and unwind, and costs very little to implement.

 Special

services. For example, invite a local massage therapist to give 15-minute chair massages. This is a win-win for the therapist and your dealership. Your customer gets to relax, and the therapist has an opportunity to build her client list.

Or, bring in a manicurist. This is another surprisingly easy-to-implement personal service for women customers who could use a break from their busy days.

ADDED CONVENIENCE

Relaxation opportunities are great, but your woman customer may opt instead to multi-task while her car is being serviced. Most of our schedules include more tasks than the day will allow, so you don’t want your customer to feel stuck at the dealership and unproductive, even if it is just for a few hours. Here are some suggestions: •

Offer a loaner car for a woman customer to use during the service time. She can run errands and work through her day’s task list, and your dealership has risen to the top of her “wow” list. A courtesy vehicle should also be an option, if she is going to return to work or go home.

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safety seat, safe driving, tips for vacation safety, staying safe while driving at night, and what to do if you have an accident or a breakdown. Or, a dealership could opt for a refresher class on the latest safety and technology features in the vehicles it sells.

HOLD SPECIAL EVENTS

A great way to help persuade women customers to bring in their vehicles for routine maintenance is to offer special events. For example, trying schedule “women’s days” on specific days of the week. On these days, offer a service discount, provide special refreshments and take the time to enhance the aesthetics of the service center. Invite a local florist to provide fresh flowers, and a local caterer or café to provide snacks. Events like these help cement your dealership’s relationships both with your service customers and with the community. Also, during the summer, try providing a “vacation preparation special” that will give your woman customers extra confidence that their families will be safe during

the drive. Create a “vacation kit” that includes some safety items and a handy vacation service checklist.

GET THE WORD OUT

Whatever enhancements and events you decide to add to engage your female service customers, be sure to promote them. Advertise the extra amenities on Facebook and Twitter. Run special ads in your local media that really speak to women. Definitely add to your website’s home page. For the special events, offer a “bring a friend” special that gives each of them extra service coupons. With the right advertising, one service customer can quickly become two … or more. Ultimately, the key thing to remember when finetuning your service center for your women customers is that little things matter. Upgrading your coffee to a better brand really matters. Offering small, unexpected “gifts” matters. In a hectic world, offering 30 minutes of peace and quiet to a woman customer will really matter. These seemingly small touches are inexpensive and easy to put in place, and they will return benefits far beyond the cost and effort and increase client retention.

Chair massages in a dealership? Don’t laugh. This grocery store probably offers some comfort and convenience features that service departments would do well to imitate.

•

Wash her car. Vacuum the interior and return the car looking shiny and spotless. She will take one look and think, “One less thing to do. Thank you!”

EDUCATE THE CUSTOMER WHILE SHE WAITS

Don’t overlook the opportunity to educate your customers while they waiting outside your service drive. There are always questions to be answered about what kinds of services are needed and when. An educated customer is more likely to adhere to service schedules and not complain about costs of service. These topics can be delivered in a short class, video, seminar or customized sales brochure. Your dealership can provide access to a personal computer with links to on-demand videos that are pertinent to a customer’s visit. These videos could also be available on your website to prepare a customer for an upcoming repair. A few suggestions for educational topics include: • •

• •

Oil changes and periodic service. Why are they necessary? How often are they needed? Tires. How to select them and keep them in good shape. Why is proper inflation so important? Why do tires need to be rotated and balanced? Cleaning tips. How to keep a car looking nice for as long as possible. Maintenance and care. How to keep your car’s resale value as high as possible.

Other topics that could be covered in videos, classes, seminars and brochures but that don’t apply directly to auto service include: How to properly install a child

ServiceDriveToday.com

ANNE FLEMING President of Women-Drivers.com Prior to her involvement in the retail automotive industry, Anne spent 20 years in brand 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.

SEPTEMBER 2015 Service Drive 33

ON THE SET WITH

Roger Penske, chairman of Penske Automotive, is inducted into the Automotive Hall of Fame in Detroit in a ceremony that CBT covered. Also shown are (far left) NADA Chairman Bill Fox, NADA President Peter Welch, NADA Vice Chairman Forrest McConnell and (far right) David Penske, chairman of Penske Buick GMC.

Michael Roppo, director of fixed operations and training/QPS at Automotive Domain Results, with Corinne Lillis of Service Drive Today.

Jeff Cowan, trainer and president of Jeff Cowanâ&#x20AC;&#x2122;s PRO TALK Inc., with Corinne Lillis of Service Drive Today.

Cody Tomczyk, director of digital sales at Force Marketing, with Corinne Lillis of Service Drive Today.

Sales trainer Dan Jourdan, with Corinne Lillis of Service Drive Today.

Jim Fitzpatrick (left) of CBT interviews Roger Penske, chairman of Penske Automotive, at his induction into the Automotive Hall of Fame.

Carfax spokesman Chris Basso and Corinne Lillis of Service Drive Today.

Leadership and service trainer Chris Collins.

34 Service Drive JUNE 2015

Steve Hall, instructor at NCM Associates.

Don Reed, CEO of DealerPro Training, with Corinne Lillis of Service Drive Today.

ServiceDriveToday.com

SCHEDULED RETENTION

MORE CUSTOMERS BUYING MORE STAYING LONGER

86%

of drivers who return for regular maintenance are also more likely to purchase their next vehicle from the same dealership.1 LEARN HOW TO CAPTURE THESE OPPORTUNITIES!

Visit easycare.com/servicedrive Or Call Us Today at 855.772.6590

1 PPM Driving Retention, Profits - March 2013, Auto Dealer Today. © 2015 Automobile Protection Corporation – APCO. EasyCare is a registered trademark of APCO. MOTOR TREND® is a registered trademark of TEN: The Enthusiast Network Magazines, LLC.

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