In the latest of our series, thanks to legendary service adviser trainer, Lloyd Schiller, of LloydSchiller.com and Brooke Samples of Profit Blueprints, Brooke gives her thoughts on the coronavirus crisis.
John F. Kennedy’s quote, “The time to repair the roof is when the sun is shining”, has never been more relevant. Don’t wait for the world to return to normal; seize this time to upgrade your processes and do all of the things “we don’t have time to do.”
Many or most of your current processes have built-in waste. With our free time, now is the perfect time to evaluate potential wastes. Waste is any step or action in a process that is not required to complete a process. Six-Sigma lists the 8 wastes of lean, as Defects, Overproduction, Waiting, Non-Utilised Talent, Transportation, Inventory, Motion, and Extra-Processing. I don’t know your dealership, but I’d wager at least one or two of your current processes embrace one or two of the wastes.
Besides reducing waste, consider implementing the 5S methodology to streamline your processes with visual control. The 5S Methodology helps a workplace remove items no longer needed. It starts when you remove (Sort) everything from a space. Then only bring back (Straighten) what you need and organise the items to optimise efficiency. Daily keep the area clean (Shine), so you can identify problems. My favorite step (Standardise) is to use labels and color-coding to be consistent. Finally develop the habits (Sustain), and implement the processes to best maintain your “new behavior” over the long term. (5S works just as well at home.)
We will have to create new behaviors to accommodate Social Distancing (for sure the 2020 word-of-the-year) for your employees and customers. Consider flexible schedules for employees (half the accounting office works in the morning, the other half in the afternoon). For some positions, employees do their work from home. To engage your customers, create videos or flyers that answer their questions or solve their problems. Encourage your service customers to schedule their appointments (no more “just come on in”); maybe you want them to stay in their vehicle until your advisor gets to them. Explain and show customers your “new” processes with videos and emails.
We will adopt “temporary” practices to accommodate our customers – you never know, these new practices could become your new best practice. Remember the ad from the movie Mr. Mom (1983): “We at Schooner Tuna can sympathise with all of you hit by the hard economic times. In order to help we’ve decided to reduce the price of a can of tuna by 50 cents until the crisis is over. After that, we will resume our regular pricing. Schooner Tuna, the tuna with a heart”. They adjusted their pricing for the times.
As a temporary practice, deliver parts to your counter retail customers just like you would for your wholesale customers. Offer curbside parts pick-up for parts paid for online or over the phone. If you don’t already have the capability for customers to pay online, determine what works best for you—use a vendor like DocuSign or work with your website vendor to establish a convenient way for customers to pay and go!
If you now offer pick-up and delivery for service customers, vehicle salespeople can be those extra hands. Salespeople can help their fellow salespeople with remote vehicle deliveries. If the salespeople are unwilling to help to maintain a pay cheque, are they the people who will be with you in the long run? The controller in me says always have two people go to a customer’s home or workplace to reduce potential liability issues from a “crazy” customer.
The Great Toilet Paper Shortage of 2020
When you can’t buy toilet paper, the lesson you learn quickly is to conserve resources. My first job as a controller was at a Chrysler-Dodge dealership before Lee Iacocca revived Chrysler, and we were thrilled to make $4,000 in 1981. We were so cash-strapped, (How cash-strapped were you?) I would use both sides of the calculator tape. I hope you will never be in the position where a roll of calculator tape makes a difference. Still, in this time of uncertainty, there is a valuable lesson we all will learn from and perhaps be better managers when business returns to normal.
You may have reviewed your expenses at the end of 2019, but now you have a different lens to look through, one that also focuses not only on the best price but on reducing what you are using. Look at want versus need. Maybe I can look at that on the computer monitor instead of printing it out. Hey, Tech, you don’t need to put on new gloves every time you get a little dirt on them—wash it off and save a few gloves for others. Disposable is removed from the lexicon and replaced with I bet I can make this work. What you learn over the next few months will pay off for years to come in better processes and reduced expenses.
Hang on to your cash
I’m writing the definitive manual for dealership accounting (to be released this Australian winter), and one segment that is applicable today is the Cash Conservation segment. Although COVID-19 wasn’t part of the plan, the ideas are even more valid in uncertain times when you spend more than you take in.
- Floor plan used vehicles (especially if your lender is allowing a grace period).
- Keep a vigilant eye on frozen capital – those resources used ineffectively. Collect those receivables and sell the old inventories.
- Tighten the credit extended to wholesale vendors.
- Pay bonuses to managers whose salaries are substantial, quarterly.
- Send out Accounts Receivable statements early.
- Make payments on a company credit card to extend the time to pay.
What to do? What to do?
No one knows when you might have to furlough or downsize your staff, hopefully, you won’t have to. The rest of this article offers ideas to keep your valuable staff busy and productive—staff that you spent time and money recruiting and training. If you have folks quarantined at home and you are paying their wages, keep them in the loop with quick calls via Zoom, Skype, or other internet communications options. Most of these providers have free options.
Create a list of projects you’d like to accomplish to “up your game.” You probably won’t get to all of the projects, but you’ll have a list for the future when things are slow. Some of these ideas you can use even if your department is closed due to government mandates. With Zoom, you can see all of the employees’ smiling faces.
1. Create training videos. Create 10 – 15 minute training sessions for your team. Get their feedback on areas they feel they could improve.
2. Role play. Practice those skills that make a difference with your customers, such as;
- Asking customers for referrals.
- Presenting service maintenance menus.
- Upselling on a body shop estimate.
3. Discuss bottlenecks. Have employees tell you or send you a message on why they think their work slows down due to bottlenecks. Discuss solutions and engage all of your employees for their ideas. Do not disparage their input, or you will stifle their input.
4. Do your spring-cleaning now. Remove and dispose of clutter around the dealership. Sort and shred files (as allowed by the IRS.), scrap warranty parts (as authorised by your manufacturer.), or shred outdated forms.
5. Review every page of your website – do all departments shine? Call every phone number to verify they still connect to the right department.
Update employees’ job descriptions.
Everyone acknowledges the coronavirus crisis is an unprecedented time in our history, but we know it will pass. Heed the words of Zig Ziglar: “It’s not the situation, but whether we react negative or respond positive to the situation that is important”. Don’t let this gift of free time get away from you without making the best out of it.
If you would like a detailed list of projects, for each department, that you can do if business is slow, email Brooke at firstname.lastname@example.org
Fixed Operations Consultant
President, Profit Blueprints, LLC