20 Group Best Practices

Transcription

1 20 Group Best Practices

2 Outsourcing It is often better to keep work in-house, but not always. A cost analysis should be done on a case by case basis. Example Warranty processing Replace a warranty clerk with a warranty processing service. The economic argument looks like this (dealer provided example): Warranty Clerk s Monthly Pay $ 2,175 Payroll Taxes $ 200 Major Medical Coverage $ 310 Average Monthly Sick & Vacation Pay $ 100 Approximate Monthly Direct Employee Cost $ 2,785 Warranty Processing Service Monthly $ -1,800 Approximate Monthly Savings $ 985

3 Variable Labor Rate Pay Plan When an A level tech is doing C level work should they be getting A level compensation? Have a technician pay plan that pays according to job skill rather then technician skill.

4 Declined Repair Order Process Do we follow up with our customers that have declined work in our service department? Have a specific labor op on the repair order for declined services so we can pull that report the next day and contact the customer and ask for the sale again. We must do this the next day, not in 2 weeks or a month by or snail mail.

5 Improve F & I? Yes you can! After rationalizing for many years why our F&I income was at a mediocre level we finally hired an F&I Manager capable of producing $700 - $800 a unit and more. Before: January thru June 30 th net monthly F&I income averaged $27,637 ($476 PVR) Turning Point Hired a new F&I Manager July 1 st After: July 1 st through August 31 st net monthly F&I income averaged $48,690 ($742 PVR) The difference That s $21,053 per month or $252,636 annually! This is Net F&I after commissions!

6 Come on In Empower all your employees to get customers into the service lane. Post & distribute a list of requests/repairs/concerns that customers may call for and will always be told. Come on in no matter who they talk to or when they call!

7 Dealer in the Service Lane Raise awareness to raise production. Dealer wanted to raise dollars and hours per RO. Dealer spent each morning from 7:30 till 8:30 in lane for a week. He would ask the ASM if there was anything else we need to look at for Mr. Customer. Did we check his battery, oil, etc.? Did we arrange an estimate for body damage, detail, etc.? Did we determine if all preventative maintenance is up to date? Results were immediate! Increase $$ per Repair Order today!!

8 Dealer in Service lane

9 Sales Scoreboard in Service Department Leverage Internal Competition The dealer wanted to raise dollars and hours per RO. Installed a Sales Board in the Service Department like the one all stores have in the sales department. Started tracking daily Sales of Batteries, Tires, 30 K, etc. Broke it down by Service Advisor. The more we tracked the more we sold! Almost anything that is measured, improves! Simple, easy inexpensive and effective!

10 Quick, Get to a Hospital! Create a Preferred Provider Relationship Offer special pick-up and delivery of customer vehicles to create additional business Healthcare staff work irregular hours and aren t able to leave work to run errands Every dealership is near a hospital, perhaps several Some Hospital HR departments will promote your business for you if you provide convenient services that benefit their staff

11 Getting Your Tire Sales Rolling! No substitute for a good display Service drive should look like a tire store Good, better, best choices Common wear patterns Must be priced competitively Comparison pricing/specifications sheet Consider offering the following at no additional cost Road Hazard Policy Rotations

12 TIRES TIRES TIRES The statistics speak for themselves: 15 per percent of vehicles in the service drive need tires. Seventy-five percent of consumers purchase tires from the first person that recommends them. Seventy-eight percent of consumers maintain their vehicles at the place where they purchase tires. Yet surveys show that despite promotional efforts and tire displays, only 40 percent of service department customers are aware that their dealership sells tires. Can I Buy Tires Here? The good news that over 80 percent of these same consumers indicate the would be likely to purchase tires from the dealership. In other words, there is lots of opportunity to both sell tires to customers as well as keep them coming back for service, rather than seeing them defect to the tire retailer down the street. More and more often, successful service departments are using their oil change service to help sell more tires, and using their tire business to help sell more oil changes.

13 Showcase Tire Wear Create a Selling Aid Through Display. Most passenger car tires only come with 11/32 inch of tread. The last 2/32 is the legal wear out point in most states All tires sold in North America have wear bars at 2/32 That leaves just 9/32 inch of legally usable tread. This is less than 1/3 of an inch This is where the wear indicators are. Use the traffic light model to display how tires condition can be determined with a visual inspection.

14 Showcase Tire Wear

15 Focus on Value Selling Value Selling Spiff Increase Gross / Focus on Value Selling Create a point based promotion to win merchandise 15 day promotion 5 points for holding on trade 5 points for selling at intended transaction price (asking price) 1 Point for selling a car Big results Small investment Sales Consultants are refocused Drives use or in-house script for used car prices Drives walk around presentation done in front of customer TV was $330 & first sticker deal made my money back

16 Vendor Spread Sheet List on a spread sheet all contracts and pertinent information. The start date and end date for the contract and notification date for non-renewal. Cancellation provision, individual signing for the dealership, estimated lead time for negotiating a new contract. Submit your request for new proposals to at least 3 vendors. Consider designating one person for the dealership, (GM, CFO, Dealer) to be empowered to sign contracts. Evaluate the list monthly by designated person and at least annually with department managers.

17 Annual Vendor Expense Review Involve all management and vendors Plan a meeting early in the year to review all vendors and previous years bill Get new quotes from current vendors and new vendors Consider offering a year long contract for a lower bid Increase bottom line by decreasing expenses Managers recognize that the dealer is reviewing vendors and expenses

18 Highly Defined CRM Data Collection Process Structure and accountability Task the Sales Management staff to meet every client Hold managers accountable for consistent data collection Traffic includes internet, phones, service clientele, etc. Establish process to spot check compliance and accuracy

19 Weekly New Vehicle Inventory Review Create a dealer-specific process that includes: Designating specific people to order/buy inventory Create guidelines for dealer trades Are we improving our position with each trade? Consider embargo on just arrived inventory (establish time i.e. 30 days) Determine what drives order criteria Where are oldest units Should be priced to sell and properly merchandised Dealer or GM should walk inventory with managers weekly Tie aged inventory to pay plan

20 Weekly Used Vehicle Inventory Review Create a dealer-specific process that includes: Designating specific people to buy inventory Determine what drives buying criteria (vauto, Autotrader, etc.) Spot check price competitiveness Where are oldest units Should be priced to sell and properly merchandised Dealer or GM should walk inventory with managers weekly Create old unit policies and processes Tie aged inventory to pay plan

21 Parts Department Tech Bins Mount Individual Bins for each tech on the wall outside the parts dept. Parts employees can move the next R.O. and part to the techs bin Greatly reduces the wait time at the back counter Prevents the tech from picking up the wrong job and part Improves productivity and prevents the coffee clutch at the back counter

22 Total Dealership - Communication The Dealership Daily A quick , with a pre-formatted setting Does the Parts Department know how many Service Clients are expected today? Does your Sales Department know how your Service department is tracking compared to forecast? Do your Fixed Ops departments know how many vehicles where delivered? Who s off sick, who s birthday is it, are any employees having a job anniversary?

23 Used Vehicle Department - Tracking Prepare a tracking sheet to monitor the time it takes for a used vehicle to get reconditioned Mandate a time. For example 3 days Service manager to provide UC manager the tracking sheet daily Faster turnover in the Service department means faster turnover on the lot Keeps the Sales staff excited about the fresh vehicle Newer inventory means higher gross

24 Total Dealership Online Reputation Monitor Websites that could affect your reputation Internet Manager should review with dealer/gm monthly Sites like Google Places, Yelp, DealerRate.com Respond to negative comments in a positive and professional manner Claim your dealerships listings on these sites!

25 Service Department Employee Bonus Monthly Bonus for over performing work Bonus the employee that recommends the work Manager monitors increase and charts for the Dealer/GM Example: Low brake fluid flush at factory recommended mileage Program: $10 to appointment coordinator if sold at time of appointment booking $10 to technician that recommends work $10 to the advisor that sells the work as an add on

26 Sales Departments - Accessories Create an accessory display area Hire an accessory sales consultant Turnover all sales clients to the accessory sales consultant prior to F&I turnover Menu pricing for all accessories and services Spiff sales people and managers on accessory sales Pay plan for accessory salesperson should be commission and CSI driven

27 Sales Departments Used Vehicle Purchase Solicit service drive customers to trade or sell the dealership their vehicle Create a powerful flyer for the windshield or dash of great potential purchases Example: ATTENTION! We would like to BUY this vehicle. Please contact the Buyback Manager for a no obligation hassle free vehicle appraisal. This vehicle may never be worth more than today!

28 Used Vehicle Department Aged Inventory Set an aging/policy and stick to it. Example: All used vehicles must be less than 60 days old 3 day recon 5 days to hit all media/ websites 5 level Pricing schedule days Price at or above market days Price at market days Price below market days Price at wholesale (F&I recover some profit) days Wholesale

29 Total Dealership Service Clinic Plan 12 Monthly Service Clinics Invite all new sales clients from the previous month, and clients from prior month sales that couldn t attend recent clinic Consider inviting guest speakers Prepare Management to have small work stations for visitors to view Food and Beverages Request a RSVP Follow up days prior to meeting to confirm attendance

30 Total Dealership Annual Forecast Initiate annual forecast late in the prior year Have managers set goals for expenses, forecast gross profits, and departmental net profits Set monthly meetings with management to review previous months performance and current month forecast Adjust annual forecast as required Hold management accountable for their objective Consider tying part of managers pay plan to the Forecast

31 Service Department Advisor walk around Mandatory, the walk around is a job requirement Build a check list the advisor can use each and every time The advisor takes the check list, a clipboard and the client and walks around the clients vehicle when entering drive through Prevents client from claiming dealership damaged vehicle Allows advisor to point out needed maintenance Increase lines per work order

32 Service Department Checkout Advisor to check out all of their clients Increases CSI Prevents confusion of the bill Advisor to explain work performed Ensures dealership will get paid, and all paperwork is correct Allows advisor to explain required service at next visit

33 Parts Department Special Order Parts Weekly review of Special Order Parts bin What are they? How much is the total value and what should it be for that dealership Why haven t the customers been in for pick up? Must get a deposit Who calls the customer to deliver the part

34 Total Dealership Employee Retention Non-bonus awards and events Employee of the Month Award Monthly Employee Lunch meetings. A quick update, brief forecast review, lunch and games Quarterly functions- softball games, beach day, family picnic, Year end bash Special parking spots for month employee awards Annual Employee Review- Positive, negative and potential

35 New Vehicle Department Window Sheets All new vehicles require a Monroney/addendum window sticker Ensure sticker complies with local laws Walk the lot weekly to ensure all vehicles have stickers Inspect dealer trade units for proper sticker/sheets Replacement window stickers are available

36 Used Vehicle Department Window Sheets All used vehicles require a window sticker Ensure sticker complies with local laws ( FTC trade commission ) Walk the lot weekly to ensure all vehicles have stickers Inspect vehicles for proper price sticker Replace old and faded stickers

37 Service Department Management Turnover Set a policy for Advisor to introduce customer to a manager when customer turns down service or asks for a discount Prevents ASM from automatically offering a discount Decrease one line RO s Increase Gross to Sales percentage Improves relationship between client and management Increases customer loyalty

38 Parts Department Obsolete Parts Inspect parts inventory and regularly review obsolete parts Increase parts turn When will the parts be disposed of When does the part get written down How does the manager prevent obsolete parts Less obsolete parts increases cash flow

39 Total Dealership Pay Plan Presentation Allow enough time to properly present the pay plan Block the time and avoid interruption Include a review of ALL employee benefits a) Financial b) 401k contributions c) Health, drug and dental plans if applicable d) Demo benefits/other benefits if applicable (financial value) Sell the plan and get employee buy-in

40 Total Dealership Cash Flow Office manager to dealer daily cash position at end of day Spreadsheet should include: 1. Contracts in transit 2. Pre-owned units on floor plan (along with amount owed) 3. All new units that need to be paid off (with amount and date) 4. Bank payoffs due (with date) 5. All outstanding Bills (with amount and date due) 6. Credits/Debits due that week from the factory 7. Bank Deposit (with the date that funds will be available) 8. Total Daily Cash Position The total daily cash position is a net number based on the amount of the cash available in the bank less any bills/vehicles that were paid that day

41 Total Dealership CSI Review all CSI reports and review with employees involved Create a process to shout out to the dealership for a perfect score Institute a token of appreciation for a perfect score Hold employees accountable for poor CSI reports Consider tying CSI to pay plan if applicable Possibly tie employee of the month award to CSI

42 New Vehicle Department - Inventory Tie inventory to monthly Forecast Look at current inventory, including models and equipment Plan total inventory required Adjust orders according to the forecast Consider inventory levels and models in local market Work with manufacturer to earn maximum number of hard-to-get models

43 New Vehicle Department Leads Institute a policy to return all s with a personal within 10 minutes of being sent Regularly test the system. Make sure that the time is received and the time the is sent coincide Regularly review the responses to ensure they are grammatically correct Hold employees accountable for the 10 minute policy Confirm the method the sender would like to be contacted Institute a regular follow up program for at least 90 days

44 Total Dealership Retention Program Institute a Preferred Customer Program Offer discounts for certain services Free oil changes after x number of changes Top trade in value when vehicle has been maintained to manufacturers specifications

45 Service and Parts Department Matrix Pricing Pricing is consistent to customer Quicker response time in quoting a job to service customer Increases your gross profit in Parts Allows for competitive pricing in your market

46 Daily Expense & Forecast Report Managers to provide dealer/gm a daily +/- report Example: Parts Take total parts dept expense: $40,000 Divide by # of working days: 22 Equals Break even daily gross: $1818 Divide by # of counter personal: 3 Break even for each c/p: $606 Report to dealer: 3 rd day of month Expense for three days = $5454 B/E for each c/p = $1818 Gross Generated month to date = $ $746 c/p Johnnie $ $382 c/p Bill $2400 +$582 c/p Paul $ $218 Can also be Forecast driven!

47 Tired of Your Business Giving Bad Phone? Utilize a recorded phone number on your website as well as on all advertised material that will allow you to listen to the conversation held by your employee. At each meeting select a few good examples to play back for the sales staff and reward the those that handled the phone call properly. Play poor examples privately to coach employees. Hold your sales staff accountable and remember that what gets measured, improves! Important: You must disclose to both the employee and the customer that the call is being recorded Every Time!

48 Reach Out and Touch Your Customer Appointment Coordinators make outbound phone calls for: Due now for routine maintenance Two day follow up & set next appointment Complimentary oil change after purchase Non-returning VIN for first visit Recalls/Campaigns (follow OEM guidelines) Service reminder two prior to appointment No show for appointments Special Order Parts Work suggested but not performed Important: You must follow all the requirements of the Federal Do Not Call and other regulations.

49 Cash Flow Do you know where your cash is? Have Office Manager you every night our daily cash position. to consist of the following items on an excel spreadsheet Contracts in Transit Pre-owned units floor planned (amount owned) New units to payoff (amount and date) Bank payoffs due (with date) All outstanding bills ( amount and due date) Credits/debits due that week from OEM open acct. Funds due from OEM Bank deposit (with date that funds are available) Total daily cash position The Total Daily Cash Position is a net number based on the amount in the bank less nay bills/vehicles that were paid that day!

50 Dealership Snapshot Activity - Overview Blending Knowledge of: The Financial Statement Dealership Operations Fixed Operations Variable Operations Best Practices Compensating, Motivating and Retaining Employees

51 Dealership Snapshot Activity Directions For this exercise you will use the electronic files provided. Select a financial statement as a table group to complete the exercise Locate the needed information from the financial statement Enter the information on the spread sheet Divide the pages among your group members Review your assigned page(s) of the Dealership Snapshot printout Analyze the dealership s current performance Develop a consulting plan Prepare to report out in the manner you would consult with the dealer Report out to the group as directed

52 20 Group Best Practices