In the latest of our series, thanks to legendary service adviser trainer, Lloyd Schiller, of LloydSchiller.com and Brooke Samples of Profit Blueprints, Brooke explains why there are no shortcuts if you want to be the best.
Last weekend, I elected to change the paint color on my front door and the related trim. I wanted it to look good and the first section I painted, I prepped with precision. I sanded and taped, as I knew I should…and when I finished it looked great. However, boy was that laborious so for the next area I figured I really didn’t need to do as much sanding and, since I thought it was easy to scrape the paint off the glass, I didn’t need to be as diligent at taping. The result — my shortcuts looked more like a work by Jackson Pollock than by Leonardo da Vinci.
Roman philosopher Seneca said, “Luck is what happens when preparation meets opportunity.” For a twist on that, we’ll say, “Extraordinary is what happens when preparation meets opportunity.” Extraordinary comes down to prep work. It is being proactive versus reactive. It is being consistent every day in preparing for the opportunity to excel and, yes, it means skipping the shortcuts!
I’ve selected three examples of shortcuts common in every dealership with the counterbalance of preparing to be extraordinary. The department examples are likely to be your most profitable departments already so imagine what happens when preparation meets opportunity.
Service Department Shortcut: A customer calls to make an appointment for an oil change/tyre rotation. We tell the customer “you don’t need an appointment, just come on in.” (1) We wait for the customer to arrive. (2) When the customer arrives, we greet them with a skilometre and take the customer to the computer, and complete the Repair Order. We then dispatch the vehicle and await the results.
Preparing for Extraordinary: A customer calls to make an appointment for an oil change/tyre rotation. We ask what time and date is most convenient, check our schedule to make the best possible accommodation, and then lock in the appointment. We ask the customer about how many kilometres their vehicle has. If the vehicle is equipped with maintenance reminder lights, we ask what the code is. After we set the appointment, we ask the customer if they could spare a minute while we checked to see if there are any open campaigns on their vehicle.
(1) We use the VIN to look for open recalls, vehicle history for work previously declined; and based on the mileage we got from the customer, look for recommended maintenance if there isn’t a maintenance reminder light.
(2) Upon this vehicle “review,” you see that the vehicle has an open service campaign, or the vehicle needs more maintenance than an oil change that will take at least 2 hours. Will the customer need a loaner, a ride somewhere or will 2 hours in your service lounge be no big deal? If we haven’t covered this during the appointment process, call the customer to determine what will work best for the extended time. The point is we don’t spring this information on the customer during the vehicle reception write-up; it’s TOO LATE!
(3) A pre-work order is printed and filed in the appropriate folder or tub, along with vehicle history and appropriate maintenance menu.
(4) The day before the appointment, call the customer to remind him/her of the appointment. The advantage to a phone call versus a text is (a) you can ask the customer if there is any additional work that needs to be done. (b) If the customer has to change the appointment day or time, it can be done right now, and we know we have some vacant time we can fill tomorrow.
(5) When the customer arrives, we greet them with a smile, have their paper work ready to go, and do a quick vehicle walk-around with them.
Wow! That seems like a lot of work for an oil change and tyre rotation. Maybe, but the preparation put into this “oil change/tyre rotation” is the difference between an average customer experience and an extraordinary customer experience. It could mean the difference between $20 in labor sales or $180+ in labor sales. For Service Managers who say they need more customers – use this technique to make the most of each customer’s visit instead of spending money to bring in more oil change customers!
Parts Department Shortcut: (1) Wait for the Technician to come to the parts counter to request a part. (2) Look up the part, go to the bin, charge out the part, give the part(s) we have in stock to the Technician. (3) Order or locate parts we don’t have on the shelves.
Preparing for Extraordinary: (1) Mid-afternoon, every day the Parts Manager or Lead Technician Counterperson reviews the next day’s appointments to look for potential parts issues based on the customer’s requests – perhaps two customers with the same problem or a known problem that you are low on the parts. Confirm Special Order parts are still in stock!
(2) The next day, when the customer arrives, a copy of the Repair Order prints in the Parts Department and a Counter Person reviews it to look for any parts that can be pulled (maintenance parts, SOPs, known product problems, recall campaigns, clear-cut customer requests – “Install hood bug defector”). Parts that can be pulled are added to the Repair Order and set on Technician-accessible shelves. Arrange the parts by the last digit of the Repair Order, the copy of which was printed at the Parts Counter is now folded and put under the part(s) on the appropriate shelf number as “the bin label.”
(3) For a separate Express Service area, fill cabinets with the most common parts such as oil filters, air filters, cabin/pollen filters, wiper blades, valve stem caps, etc. for quick access.
(4) After the vehicle pulls into the service stall, the Technician determines what parts are needed. The Technician notifies the Parts Department, a Parts Picker/Runner takes the pulled parts and any additional parts to the Technician.
(5) In a large shop, a Parts Counter Person(s) is set near the back or middle of the shop to help Technicians without clear-cut parts requests.
(6) To ensure that the most requested parts are in inventory, the Parts Manager focuses on a clean, yet plentiful inventory through smart stocking criteria. (a) “Easier to reach” Phase In Criteria will present a larger selection for the Parts Manager to consider, especially if a part is “ramping up” quickly. Tight Phase In Criteria means we p.o. “X” number of customers before we even BEGIN to consider this part for stocking status. (b) In what has continued to shock and annoy me is that the automakers with automatic replenishment ordering have the “tightest” strangle on stocking your shelves; just the opposite of what you would assume. Their stocking assumes that BOTH Demand AND Supply are linear and that we never NEED 2 or 3 of a part at any given time that sells, say 12 – 24 times per year. So they stock you with one (a 30-day supply) and the day you need two, you either have “to call around” to find the second, OR you just tell the customer, we don’t have your brake pads/water pump/serpentine belt/wiper blades/fuel pump/rotors; but we can get it here by tomorrow… Just beef up the supply by 1 additional part; it’s not going to skew the inventory dollar amount by more than 5%, the parts won’t go stale, and you might actually SELL MORE!!!
(7) To ensure that the parts inventory is accurate and the Counter people can depend on the DMS, the Parts Manager mandates Perpetual Inventories to count the parts 4 times a year by dividing the total number of bins by 13; this will be the number of bins to count each week.
If you are a Parts Manager who wants to be a hero to the customers and the Technicians, follow the above recommendations to have an extraordinary Parts Department.
Many thanks to Lloyd Schiller (lloydschiller.com) for his expertise and advice on best practices.
Used Vehicle Department Shortcut: A car is traded in and eventually sold 95 days later for a loss.
Preparing for Extraordinary: A car is traded in.
(1) Retail or Wholesale. Use a two-appraisal system. The preliminary appraisal is done when the deal is worked. The next day reevaluate the potential of the vehicle. Take a scientific approach and use a pricing tool available through many companies. Review the CarFax. Decide if we will retail or wholesale the vehicle. Look at the vehicle with fresh eyes: will it need tyres? How much can you spend on reconditioning and still retail the vehicle? Put the right price on the vehicle from day one. Determine the price range of vehicles your customers are looking for – what is your average cost of vehicle retailed with a profit? Sure, you “stole” a “like-new” vehicle for $28,000 but it is well more than the average $15,000 vehicle your customers are buying. When you stock used vehicles that the costs are closer to the cost of new vehicles (which have rebates), you will find it more difficult to find the right buyers for those higher priced vehicles. Be smart from day two, so day ninety-five doesn’t even enter into the picture.
(2) Reconditioning. Get the vehicle through reconditioning in under 72 hours. According to NADA, the carrying costs for a used vehicle can run at least $28 a day. If a vehicle is bogged down in the reconditioning stage for a week, you’ve now taken away four potential days to sell the vehicle. Don’t skimp on reconditioning – you will fix it now or when the customer buys it. Customers will notice a vehicle that needs new tyres or if a rear window won’t go down and they will use this information to work you on the price.
(3) Introduce the vehicle to your Sales People! Every vehicle has a story and a reason you decided to keep it in stock instead of wholesaling it. One owner? Fabulous! Perfect maintenance records? Outstanding! Loaded vehicle for the price of a base model? Yahoo! Whatever the reason, every vehicle has at least one redeeming reason a salesperson would want to sell it. Write up the reason and introduce your sales people to the latest additions to your lot. Get them excited to find buyers for your new acquisitions. Sell the vehicles before 45 days and save the dealership the “spiff” money to get rid of aged units.
(4) Pricing. Establish a consistent pricing strategy. Use factors like a model’s past performance and ageing history, plus current market demand to keep the price relevant. When the vehicle is less than 15 days old, price it where the market says. As the vehicle ages, decide if the price is still valid. If you’ve had very few clicks on a vehicle you may need to adjust the price to attract more buyers. Re-price at 21 days and weekly until the vehicle sells.
(5) Marketing. Even if it’s not through reconditioning and you don’t have good photos yet, start marketing with pizzazz! Write exciting descriptions, it’s not white, it’s diamond mist! As soon as possible, capture enough pictures to show off your newest inventory.
(6) Aging Policy. Mandate a “no-vehicle on the lot more than 45 days” policy. If a used vehicle can’t be sold in 45 days, there’s a problem – either we didn’t set the price point necessary to sell the unit in less time, we weren’t willing to reduce the price to move it, or we failed to recognize the vehicle wasn’t right for our customers. Track the interest in the vehicle either through your key machine or manually. If after 20 days the vehicle has had no “inquiries,” there is a problem with the vehicle – fix it now! If after 20 days the vehicle has dozens of “inquiries,” there is a problem with the vehicle – fix it now! At 30 days if the vehicle is an “off-brand” for you, contact dealerships where the vehicle matches their brand and see if they are interested.
The benefits of being proactive from day one are immense: higher profits, happier sales people, and less work getting rid of aged units.