How to be a Great Service Manager Great Service Managers are essential to any successful service department, especially given all the changes our industry has faced over the last decade. An exceptionally good service manager achieves a hard working, productive and effective workforce that punches above its weight in its performance. A key to successful management is the relationship between the manager and his or her staff. It's the manner in which managers manage people that separate the ordinary from the good and the good from the exceptional. Good relationships are based on trust, commitment and engagement, and a service manager’s essential role is to build these relationships for the benefit of the department, so that the tasks that are set are completed with enthusiasm, effectively, on time and with the energy to do more. Service Managers, however, walk the line - they either have the behaviors that inspire followers to do what they otherwise may not be willing to do, or they do not - and the benefits or costs of both will escalate and ripple for a long time. The person leading the service department of today's dealership knows that leadership is not something we are born with. Rather, it's an observable and learnable set of practices and behaviors. As we say in the South, "You ain't born with it." So what exactly is all this leadership stuff? Leadership is influence, nothing more, nothing less. It's learning how to hold oneself, and one's people accountable. Rosalynn Carter once said "A leader takes people where they want to go. A great leader takes people where they don't necessarily want to go, but ought to be." Why is it a struggle? Negativity is all around us. Sometimes it's our people, sometimes it's the weather we fight constantly, and sometimes it's that little voice that haunts us all. Our people may work in challenging conditions--facing hot shops and service drives in the summer months and extremely cold shops and service drives in the winter, hauling heavy equipment around, and mostly working alone. It's too easy to become negative. Consider the story of the crabs in a bucket... If you ever get down to South Louisiana where they do a lot of crabbing, you'll often see a bucket full of crabs on a dock waiting to be sold and processed. All of the crabs in the bucket are alive and there's almost always one industrious little crab that tries to get out of the bucket. He'll step over and even on the other crabs in the bucket, just trying to get to the top so that he can pull himself out and eventually to freedom. Instead of watching and eventually following him, do you know what the other crabs do? You guessed it...they grab at his legs in an effort to pull him back down and to certain death...why? Because misery loves company and negative people HATE seeing someone break out and be different....they would prefer that you stay in their pity party and be negative along with them. As a good leader we MUST encourage our staff to break out of the negative thinking and try to inspire each other to crawl out of the bucket and head directly to greatness. As a service manager, all too often we are caught in a trap of empathy and accountability for our staff. When we get caught in this trap, all we are doing is encouraging the pity party and encouraging the crabs to pull their fellow crabs back into the bucket. What do winning service managers do? Start by looking in the mirror. You have to hold yourself accountable; only then can you start holding others accountable. Be positive Be specific regarding end results, time frames, and expected levels of effort Get a commitment from your team Put it in writing Agree on a plan for monitoring the person’s work Monitor the person’s work Always acknowledge good performance Coach staff and counsel those who need it Seek response and feedback to all communications with the staff Know how to resolve conflicts as they arise and handle negative behavior effectively Listen to concerns and feedback Be responsive to concerns and feedback Control and co-ordinate staff effectively Seek continuous improvement While this is a great list to get you going, there is much more to it. Being accountable means there is a known consequence when one achieves or does not achieve the agreed upon goal. When someone achieves the goal, life is good and they should be recognized for the achievement. However, when someone misses their goal, the appropriate consequence is harder to grasp and act on. The key is to recognize that mistakes or not achieving goals is part of the learning process. At the same time, the responsible party must feel comfortable communicating that they can either handle a situation or they can’t handle the situation. It is the manager’s job to determine their capability. Successful service departments establish a culture of high accountability for everyone in the department. The results come when we get everyone to take accountability for any outcome and establish a culture where people are free to communicate their belief around what they can actually accomplish. This will allow you to actively manage the situation and the individual to ensure achievement of your goals and expectations. Great managers do not stop there. A true leader continually upgrades their team. I know getting technical people in our business is the hardest obstacle we face. That is why we must recruit constantly. Leaders make sure their people not only see the vision-- they live and breathe it. Leaders infect everyone with positive energy and optimism. They have the courage to make those tough calls; they push, pull, probe, and are stewards of change. The most important task in being a successful manager is being a person that others want to follow. Every action you take during your career in an organization helps determine whether people will one day want to follow you. Think Like a Millennial Businesses today in nearly every industry are dealing with the changing expectations of millennials and other on-trend customers who are looking for a new style of customer experience and customer service. Let’s think about what millennials and other customers sharing their mindset are looking for in the customer experience and customer service, and how your service department can scratch these itches. Millennial customers (born 1980ish-2000ish) are the largest generation in U.S. and world history. They, and others who are quickly adapting a millennial mindset (including, more frequently than you’d think, their parents, who are the second-largest generation, the Baby Boomers), share some clearly identifiable expectations that I consulted closely in my work as a Service Manager and Service Advisor. Below are five customer experience preference trends that I have seen while spending time at dealerships across the nation. While being a part of the millennial age group helps in identifying these characteristics, it is very important that you Service Managers and Directors can identify them, as well, and make the needed changes on your service drives to accommodate and make a stellar impression. Five Millennial customer experience preference trends: Peer-to-peer customer service style: A preference for being served in a way that makes the customer feel that those serving and those being served are equals, rather than an older style of service that was sometimes servile and sometimes condescending. Digital parity: Customers expect an experience that is streamlined and hassle-free/friction-free. They want you to be as easy to use as what they've experienced online. Channel shouldn't matter: the info available online should be available in the store, and vice versa, and all channels with which you interact with the customer should be streamlined and integrated. Authenticity: Today’s customers are on a quest for what is genuine, authentic, what feels like “the genuine article.” They’re put off by all that seems false, plastic, scripted and so forth. Transparency: A preference for businesses to be open and forthright in explanations, pricing, quality standards, vendor relations, etc. Adventure and Experience: A feeling that most commercial interactions are improved if there is an element of adventure, excitement, a true “experience” within the customer experience. In order to attract Millennials to your repair shop you should most definitely have web presence, social media (at least Facebook, Instagram and Google) and add your business to Yelp.com and Google. Keeping all of these tips in mind will ensure you have a better chance of marketing to the newer generation. Millennials are more cautious and skeptical than other generations, especially when it comes to an industry with a reputation. In everything you do whether posting on social media, working on your automotive service marketing, or telling friends about your business convince them that you're different. Next time you're taking a stroll around your service department, take a look around, keeping this information in mind, and ask yourself if you're keeping up with the changing times by making your department stand out and different than the others. Written by Nick Rodgers We Don’t “Do” Lost Sales Having worked with many different parts managers that represent more than 35 different manufacturers, we see factory programs come and go. Today, several domestic and import franchises are assisting dealers in stocking the “right” parts. This is being done with manufacturer-sponsored daily replenishment order (DRO) programs. Depending on your franchise, it may be based on a regional or national sales demand history. The purpose of this article is not to debate if these DRO programs are good or bad, but to show the importance of a Lost Sale. As I visit with parts managers, I will ask to review the month end report. In addition to seeing the health of the inventory, I like to review the “lost sales” section on the report. In Reynolds & Reynolds this information can be found in the 2213 report. If you are using CDK (ADP), it can be found on the MGR report. I have found that many parts managers don’t ask their counter people to perform the lost sales function. When asked, “Why not?” the most common response is, “I’m on a DRO program with the factory, so it doesn’t matter.” Most DRO programs are still based on demand, both yours and a regional or national demand history, as well. Let’s start with what a demand is. Sales + Lost Sales = Demand The proper reporting of lost sales is vital to the ability of the parts department to efficiently monitor and satisfy the demands made on it. If we are to rely on the information from our inventory management system that has been set up, we must provide that system with the proper information. Recording lost sales in the management system is critical to obtaining accurate ordering and stocking levels. However, it is easy to find controversy among parts people over lost sales. Tracking lost sales is far from an exact science. For some parts managers, a lost sale is registered any time a customer, or even a service department technician, inquires about a part and we can’t say “Yes” to having that part. Here are some examples of lost sales and occurrences where there was not a lost sale: Customer comes to parts department, asks price and agrees to buy part. Walks away without ordering part when counter person can’t produce part. LOST SALE. Tech needs valve cover gasket, customer pay repair order. Out of stock and purchased at NAPA parts store. Part sold with Non-OEM part number. Lost sale should be recorded. Sale was made, but not with OEM part. Tech needs part on estimate. Parts department doesn’t have part, but tech never returned to say he needed part. THIS WAS NOT A LOST SALE. Tech needs part. Parts does not have it, says they can get it. Tech says, “No, that’s ok. I’ll see if I can get by.” THIS WAS A LOST SALE. Customer calls on the phone. Asks price. Doesn’t make it clear as to buying intention. THIS IS NOT A LOST SALE. Each manager must decide what is best for their department. See if your counter people answer the questions the way you would like. If they don’t, then it sounds like a training opportunity. If total demand is not tracked properly, it’s much more challenging to have the right parts on the shelf and ready to take care of that next customer. If you need help with your parts department, don’t hesitate to contact one of our experienced M5 Consultants. The Rookie Manager Syndrome Most Department Managers are promoted to the position because they performed well and earned the opportunity to take on a leadership role. What happens after the promotion? Are they prepared to lead a team? The responsibility can be overwhelming and oftentimes stressful. At this level, it is important to understand that it is no longer about our personal success; it’s about the success of others and how we can improve the team’s performance. One of my favorite quotes is from Zig Ziglar “We can have everything we want in life if we can help enough other people get what they want.” Let’s take a look at the 4 stages of the Rookie Manager Syndrome. Stage 1 In this stage, we are not quite sure what we should be doing so we resort back to doing things we know how to do. Write up a repair order Stock shelves Handle Service customers in the lane Problem solve a repair. These are all considered Non-Management tasks. There are times when these actions may be necessary; however, we should not be spending the majority of our time in this stage. Stage 2 We now start to perform management tasks such as: Conducting weekly meetings Firefighting Handling customer and employee complaints Pay Plans Monitor Sales Stages 1 and 2 are where most Managers spend the majority of their time. Stage 3 People Development Staffing Training Coaching Mentoring Setting performance standards Developing performance plans Stage 4 Strategic Planning Market analysis Forecasting sales Competitive analysis Preparing budget Profit Setting objectives More successful managers spend a majority of their time in Stage 3 and 4. When you move to stage 3 tasks, you actually multiply yourself by developing others with your expertise. Here are 5 techniques that will help you move out of stages 1 and 2, and start spending more time in stages 3 and 4. Plan Higher Level Tasks FirstSchedule the tasks in stage 3 first. Ask your manager which 2-3 items in stages 3 and 4 are a priority. Quit Fighting Fires You Didn’t StartThe only way to stop “fighting fires” is to start coaching and developing your employees. Don’t immediately jump in to solve an employee’s problem. Challenge them with questions that will get them thinking about how they can solve it on their own. Get on the Same Page as your DealerWhat does your boss expect of you? You should be asking your dealer: “What is my job? And how am I doing?” Don’t Get Too Attached to Your DeskGet out where your employees do their work and coach them before a problem arises. Cultivate the Right RelationshipsSuccessful managers spend their time nurturing relationships in the following order: employees, their manager, customers, and colleagues. What order is it usually? Schedule time each day, 1 or 2 hours, and schedule tasks in stages 3 and 4. The results will be rewarding and stress levels will decrease. Developing our people is the most important thing we do as leaders. Written by Pete November If you would like to discuss more on this topic or any other topic, contact Pete November at 330-592-1535 or email firstname.lastname@example.org. 6 Tips to Becoming a Better Manager We've all worked for "That Boss", you know, the one that walks in and slams his or her office door with not even a simple hello or greeting. The "Boss" that's quick to beat you over the head when something goes wrong. He or she jumps to conclusions without getting all the facts, and let's face it; we've all made that mistake before. You swore you would NEVER become that person, but it is easy to get caught up in our daily duties and forget that our people are watching our every move. You don't want to come across as unapproachable or even worse, arrogant. Recent research has shown that 86% of employees believe that they would be more productive if they liked their manager. Below are 6 simple steps that can be taken to become that likeable and more approachable manager. 1. Be friendly Take the time and say "Good Morning" to all your employees and ask them how their day is going. Walk through the drive and the shop. Remember, your words can be just what that employee needed to hear when their day started with a sick child at home, or got stuck in traffic on the way to work. Take a genuine interest in their lives. 2. Be Available Some pretty amazing ideas have come from front-line employees, but if they feel you are unapproachable, these ideas may never surface. Though not all these ideas will be winners, be considerate and thank them for their input. Showing your employees that their opinions are important to you and the company is a great way to help keep your team happy and engaged. Remember, you’re the coach, the leader of your team. We expect all our employees to come to work with a positive attitude, so lead by example. 3. Be Positive Just as negative energy can rub off on others, so can positive energy. While negative emotions on your part tend to create negative outcomes in both your people and your organization, positive emotions help your employees open up to a universe of new options and alternatives. Be optimistic and genuine with the people working around you and they will be more likely to react in the same way, making the workplace a healthy and more constructive place to be. 4. Be Grateful Everyone wants to know how they are performing. It's just as important to look for what your employees are doing right as wrong. Give positive feedback as well as constructive criticism. How about that difficult customer that one of your Service Advisors handled with ease? Or that intermittent electrical problem that your Technician spent hours trying to find? It's important for your whole team to know that you will stand beside them in good times and bad. Look for different ways to reward a job well done. We are all human beings and subconsciously seek praise for a job well done. 5. Be Compassionate Try to see yourself through your employees' eyes. Are you someone you would like? Put yourself in their shoes and have compassion for their trials and tribulations as well as their accomplishments and victories. Having (and showing) true compassion for your employees may take effort on your part, but the results will be well worth it. Your people will respect you as a leader, and they will find you more likeable, increasing their loyalty and effectiveness as a result. 6. Communicate Hold regular meetings with the entire staff and review any policy or procedural changes that have been made. You don’t want any member of your team wondering why no one told them that some change has taken place. Introduce new employees to your team and the entire dealership. Highlight any accomplishments or concerns that you or your staff has brought forth. They may already have come up with a solution. We have all made mistakes throughout our career as managers. What separates the “Good Ones” from the “Bad Ones” is their passion for their team and its success! The Easy Button Customer retention has been a major focus of the automotive industry over the past few years. Dealerships and the manufacturers have come to the understanding that if they are going to thrive in the market they need to keep the customers they have. The challenge is that our customers have more options now than ever before when it comes time to getting service on their vehicles. So how do we keep them coming back, time after time? It takes more than providing a quality customer experience. We need to make it easy for them to be our customers. We must take notice that customers place an extremely high value on their effort and time, and find ways to make the process more convenient for them. Many of the companies that excel in making it easy for people to do business with them are household names. Google is a money machine because it makes searching the web a piece of cake. Apple prints cash and has raving fans as customers because its products revolve around making it easy for people to use them. Renting from National is a breeze because they figured out a way to allow people to avoid waiting in line to get a car. Amazon is on its way to making its founder and CEO the richest person in the world because it will sell you almost anything you want while you sit on the couch. So our challenge is how to recreate this low effort customer experience in the dealership service department environment. Getting it done will require some serious changes to how things are done. There will be no place for an attitude of “that’s how we’ve always done it” if we are to be successful. Here are some ideas on how to be an easy dealership to do business with. Make decisions that help the customer win Time is the single most valuable resource we have. When it’s wasted there is no way to get it back or buy more. We can’t save time, just spend less of it. It is this reason why it’s so critical that we help our customers win by helping them spend less of their valuable time with us. We must also be exceptionally responsive to customer requests if we want to help them feel like they are getting a win from doing business with us. We must have a process and people dedicated to responding to their concerns with lightning speed. We proactively and reactively spend our time so they don’t have to spend theirs waiting for us or finding another service provider. If we can’t get a customer a quick response to their questions, we should seek out the answers and get back to them over the phone or through their preferred method of interaction, rather than keeping them waiting needlessly. Strip out the inefficiencies Take a look at what the choke points are in the customer experience, where things slow down and take time but don't add value to the customer. Some of the biggest opportunities are at the time of drop-off and pick-up. I often see customers arriving for service and having to wait to talk with someone or when they do talk with them the dealership isn't prepared. The same happens when they are coming in to pick up their vehicles after service is completed. Preparation and process will help to minimize the inefficiencies in the customer’s experience with your service department. Keeping the dealership well-staffed is essential during the more heavy times of the week. The service department has to be trained to handle its customers efficiently and emphasis sometimes needs to be placed on speed. Focus on building a relationship that works with the customer’s needs Knowing and reading your customer is a job we must take very seriously. There are some customers that will want to spend more time talking about repairs and pricing. We will retain more customers when we forge an emotional connection between them and the dealership that is desirable for them. Perception is reality in their eyes. It’s important to know what kind of customer they are and give them options. Never argue about the little details - let the customer win. If they have a coupon that’s slightly expired, what is the harm in taking it to keep the customer happy? Focus on the big picture and the value of that customer over the long-term. It’s important to let our more tech savvy customers know about the ways we can make it easier for them. Over time this group of customers will become the overwhelming majority so get ahead of the curve now and start making your service department the most convenient option they have. Written by Adam Wright Managing Fixed Operations Assets - Part 3 This is Part 3 in a three-part article. View Part 1 & Part 2 Maintenance and Use of the Vendor Pricing Guide - The parts department should be the sole purchasing agent for the dealership. Write a purchase order (P.O.) for each purchase prior to ordering. The parts department should confirm the use of the proper vendor and include the current price from the Vendor Pricing Guide. Too often, use of purchase use guidelines are a source of problems. Several general standards should be adhered to when establishing a policy regarding P.O. issuance. The number of P.O. books utilized in the dealership should be kept to an absolute minimum. The ideal situation would be to use one book for the entire dealership, generally administered by the parts department. Use of the dealership computer system may provide an opportunity for substantial control of P.O. usage. Specific entries should be required on all P.O.'s, including: Vendor name Specific description of material or service purchased Quantity ordered Total agreed upon price Repair order/invoice reference, as appropriate Person placing order All P.O.'s written for rebill on a shop repair order should be recorded on the repair order at the time of issue. No P.O.'s should be issued for rebill of materials or services without an open repair order for the above purpose. The accounts payable clerk should check all authorized invoices for accuracy, according to the original P.O. and the Vendor Pricing Guide, prior to processing for payment. Obviously, no invoice should be processed for payment without a P.O. and any price discrepancy must be resolved before the invoice is paid. Monthly Monitoring of Individual Expense Categories Select a specific number of expenses (two or three) to analyze on a monthly basis. To do this, ask the accounting manager to provide the detail information and source documents relating to all current month activity in the account you are examining. This will probably require not only the detail of the subject vendor's payable activity but also access to the relevant purchase order records and possibly the resulting repair invoices. Review each item to determine that the invoice carries the proper authorization and proper account number. Check to ensure that each item is on the listing provided. Any question or variation should be resolved at once. At least once a year (or more frequently if a trend is noticed), measure product usage and determine if usage is appropriate. Normally, just listing the monthly purchases of a particular item will identify possible over-purchasing. For example, if you wash an average of 500 vehicles per month, is the amount of soap purchased appropriate or are you buying enough to wash 2,000 vehicles per month? If the amount of soap purchased is excessive, why? Where is it being used? Is it being mixed properly or is it being wasted? Be sure to check that order quantity or frequency has not changed without management authorization. Results of Asset Management Review Tracking the scope of potential savings through stronger administration of purchasing procedures, product cost, inventory control and regular usage monitoring. Failing to take advantage of the many opportunities to compare and negotiate product and service prices will prove costly to the dealership. Once your awareness of the available opportunities is increased and you take action to organize purchasing and control costs, the results will be significant. Here are some helpful documents that you might find useful throughout this article series: Bid Specification Worksheet List of Common Items to Bid Request for Bid Letter View Part 1 & Part 2 Written by David Dietrich Managing Fixed Operations Assets - Part 2 This is Part 2 in a three-part article. View Part 1 & Part 3 Vendor Bid Specifications - Begin developing your Vendor Bid Specifications by reviewing vendor invoices and recording the products currently being purchased. Include the quantity, packaging, and frequency. Once this data has been collected, you may consider splitting the list into more manageable sections. Categorize each item with a priority identification code to identify the mailing sequence of the bid letter for that particular product or service. We recommend this approach to avoid being inundated with bids on every item on your listing. Obtain bids on the most frequently used (and ordered) items first. After a reasonable time has passed and you determine you could handle more bid activity, prepare and mail the second priority group (perhaps in a 45 - 60 day time frame). Following the second group, prepare and mail remaining required bid items in the same controlled manner until all priority groups have been completed. We recommend sending the Bid Specification Sheets to a minimum of three vendors. A "request for bid" letter should accompany the specification sheet. All information on the Bid Specification Sheet should be completed, including all special instructions. Substitutions for brand names must be properly demonstrated or used on a trial basis prior to awarding the bid. New and improved products are being developed regularly and you must be aware of them. Purchasing power is in volume buying. Your analysis of prior invoices and the usage forecast are valuable when determining order quantities, frequency, volume, packaging requirements, and other product specifications. The bid process is never-ending. After you have completed your first round of bid specification mailings, begin planning the timing of your next effort. A common misconception is that completing the bid process and occasionally revisiting this area are sufficient to achieve the desired reductions in operating expenses. This is not the case-maximum benefit is derived only through a consistent utilization of the Vendor Pricing Guides. Development and Maintenance of Vendor Pricing Guides Vendor Pricing Guides are designed to provide a detailed record of price agreements and a procedure to ensure that these agreements are maintained. We often agree to a price and, over the course of time, find that the current billing price has changed. The idea of bidding a product or service is to establish a price and then to protect it through the agreement period. Vigilance in this area is imperative as many items are delivered at regular intervals over a period of time. A Vendor Specifications Sheet should be prepared for each bid to be awarded. These sheets will become your Vendor Pricing Guide. Share sheets for as many guides as needed throughout the dealership. Accounts payable and the parts department will each need a sheet. The accounts payable guide should be filed by vendor, and the parts department guide should be by filed by products. Here are some helpful documents that you might find useful throughout this article series: Bid Specification Worksheet List of Common Items to Bid Request for Bid Letter View Part 1 & Part 3 Written by David Dietrich Managing Fixed Operations Assets - Part 1 This is Part 1 in a three-part article. View Part 2 & Part 3 The end result of the "strongest month we have had in the fixed operation" is often disappointing. We just sold and grossed more than we ever have. But the bottom line (or net profit) does not reflect our record-setting performance. Why? The answer is usually that while sales were booming, expenses were zooming - unnoticed and uncontrolled. M5's primary objective is to provide service, parts, and body shop managers in automobile dealerships with a proven process for management of the assets under their control. The techniques discussed herein are designed to assist management in verifying the validity of departmental expenses and to determine if expense dollars are being spent wisely. These techniques provide specific actions to be taken in order to accomplish these goals. Questions such as the following are addressed: 1. Are the various supplies being purchased in the right quantities? 2. Are the supplies necessary based on need? 3. Are the prices the best available for the required quantity and quality? Asset Management Review Process The asset management review process consists of the following five key elements and their corresponding activities. 1. Identification and development of controllable expense items. 2. Development of a "supplies purchased listing." 3. Development of a vendor pricing review procedure and vendor bid specifications. 4. Development and maintenance of Vendor Pricing Guides. 5. Monthly monitoring of individual expense categories (and measurement of usage). 1. Identification and Development of Controllable Expense Items Identification of the Controllable Expense Items - List the controllable expense items in your dealership. Don't overlook or exclude any item or service purchased regularly. Even include products or services that you have been getting from the same source for years. Also include any service or supplies with current formal agreements or contracts. Developing a List of Controllable Expense Items - First, make a copy of all of your manageable expenses. As you develop this listing you may wish to review previous invoices from the accounts payable files to determine items that should be included. Review contracts and formal agreements for services or supplies, noting the expiration date of the contract. Also note on your listing any pertinent information and questions that must be addressed before making a decision concerning the next contract. Purify the listing. Scan the items on the listing looking for duplicate items. 2. Development of a "Supplies Purchased Listing" Develop a "supplies purchased listing". Create your master list of bid items. Remember to maintain this listing. As new products or services are used, add them to the listing in the appropriate place. 3. Development of a Vendor Pricing Review Procedure and Vendor Bid Specifications Shopping for the Right Price - Make it a rule to never pay retail price for anything and realize that you can save 1/3 to 1/2 of the normal price on most items. Like our vendors, we are in the retail sales business - how often do our customers ask, "Is that the best you can do?" Ask your vendors the same question. In our selling situations we ask for the order from customers - why not ask for the available discount from vendors? Many of us treat the purchase of everyday supplies casually. Consequently, we often develop a comfortable relationship with our vendors. We may have been doing business with the same vendor for many years. We may even assume that since we are getting a good price on one item, our friendly supplier offers us the best price on everything. You cannot rely on only one vendor if you want to save money on your purchases. Even if you have a primary supplier for most products or services, apply the test of comparison shopping for every item purchased regularly. Here are some helpful documents that you might find useful throughout this article series: Bid Specification Worksheet List of Common Items to Bid Request for Bid Letter Continued - Read Part 2 Written by David Dietrich Parts Explained for Non-parts Management - Part 2 This is Part 2 in a two-part article. Continued from last week (Part 1). Lost Sales This is a tool to log demand for a part that you do not have on hand when a customer needs it. It serves the same value as Traffic Control in Sales, helping the store to develop an inventory that matches customer needs. This is one of the most underutilized tools I see in almost every dealership I visit for the first time. Every person who sells parts has at least two opportunities or more daily to post a Lost Sale, especially if they are selling to Wholesale customers. Reconciliation This is the monthly exercise of matching the value of the Physical Inventory (PAD) to the General Ledger (GL.) This is no different than Floorplan Checks and I’m constantly amazed at how many stores do not perform this basic check and balance. Adjustments are made to the PAD to account for Work In Process, which is equivalent to Contracts In Transit, Returns and Credits Pending; Cores which are not in the PAD but are in the GL; and Appreciation and Depreciation, since the manufacturers change some prices every month, and as soon as the update is run the PAD value changes, but not the GL, unless you report it and make the appropriate adjustments. Daily Perpetual Inventory (DPI) This is the procedure that counts all of the Investment 3 or 4 times annually, but on a daily basis just like your Lot Counts. It is designed to achieve 2 objectives: Ensure that parts are where they are supposed to be, making your parts people more efficient. Provide accuracy in the PAD so the Reconciliation is accurate. As a side benefit, if you do this properly, you can probably avoid the Annual Physical Inventory or at least be prepared for it at any time. Personnel Just like in Variable Operations you have to have enough people in place at any time to process the current business demands, as well as develop growth for the dealership. All too often we simply count heads without taking into account the portion of their time that they are available to perform their duties. Calendar Utilization This term refers to days that a staff member is on hand during a work year. Elements that figure into it are: Vacation Days how many working days are missed due to earned vacation days? This becomes a real issue when a store has a lot of senior employees who have earned multiple weeks off. It also begs the question of the dealership policy relating to whether employees can forgo the time off in return for compensation, or if they are required to take the time off or lose it. Sick Days Much like vacation days a ‘Use it or lose it’ policy can have ramifications on employee attendance. Personal Days A lot of stores will allow, or in some states are required to provide for, days off for things like birthdays, anniversaries, death-in-the-family, and the like. These also come out of the annual total. Training Whether the training is in-house or away at school, it still amounts to time away from their position. Do you allow for this in your determination of total staff? Hours in a Day What constitutes a day in your store? Most dealerships are open 10 to 12 hours in Fixed Operations, some even longer. Things to take into consideration for coverage are: 6- or 7-Day Weeks 6 days are almost mandatory now and we are starting to see 7 days becoming more common in some markets. Scheduling starts to become a serious issue now. Extended or Multiple Shifts Service Operations are often working four 10-Hour Shifts and some are even doing three 12’s. Parts have to be open to serve their needs, too. New Overtime Laws The new Federal OT laws, in addition to already existing ones in some states, may well require additional staff to provide cost effective coverage. There are a lot of details involved in managing a profitable Parts Operations beyond just selling parts and controlling Gross profits, and I hope this has raised some questions in the minds of Dealer Executives as to what else they need to be aware of. There are many solutions and one size never fits all. Written by Jim Richter Communication is the Key to Success During my travels I have seen several stores that still only use “voice calls” as the primary way to communicate with their customers. In this day and age I have found it harder and harder to answer my incoming phone calls. If someone calls and I cannot answer the phone, they may or may not leave a message. I wonder how much business or useful information I have lost because I was unable to answer a call. When booking travel I always use the internet. I am no computer genius, but I do prefer to book all my travel online. I avoid dealing with the airlines over the phone at all costs. It is a waste of my time. Here is an example. A few weeks ago I was traveling from Baltimore to Birmingham. I was scheduled for a four-hour layover in Atlanta. The airline had an earlier flight that I could make but could not change online. I called the carrier thirty minutes before taking off from Baltimore only to hear, “Your call is very important to us but due to the volume of calls your wait time will be approximately thirty five minutes.” I was thinking to myself, "I paid way too much money to be put on hold; this is unacceptable." I held for thirty minutes until the door was closed on the aircraft and was told to turn off my phone. When landing in Atlanta I called again to change my flight. Yes, I received the same message. “Your call is very important to us, but due to the high volume of calls, our current wait time is forty-five minutes.” After holding a total of one hour and fifteen minutes I was told it would cost the full price of the flight--$431. At this point they could have told me it was going to be $1.00 and it would have been too much. I explained in a very nice way that I had made two phone calls and had been on hold for over one hour “REALLY! YOU ARE GOING TO CHARGE ME FOR THE FULL TICKET? COME ON, REALLY!” The flight is twenty-seven minutes long and that would be about $15.96 per minute, space shuttle rates! I ask to talk to a manager and she explained she was the manager and there was no one else I could talk to. “We'll see about that!” I thought. I thanked her for doing nothing and letting me wait four hours for my flight. In Atlanta I found a representative to help me face-to-face and was booked on the earlier flight. After all my time, and the airline’s time on the phone, there must be a better way to stay in touch with customers and not get them fired up with wait times. Calling multiple times to satisfy a simple request is unacceptable. I am now looking to use another carrier because the process is broken! Everyone did what they thought was their job, but lost the customer because of the process. Sound familiar? Most managers and advisors I talk to do not like to text or email customers. Well, if you want to get hold of a young professional, you had better have a current way to communicate, using a “voice calls” as a last resort. They are the ones we need to survive long term. They find a company that will meet their needs and usually it’s not about price. It’s about how easy it is to set an appointment, get updated on status, make changes, and be notified when the vehicle is complete. During the appointment or write up, do we ask “Can I update you with a text message on the status of your vehicle?” After receiving authorization this is a real time saver compared to phone calls. Pictures or estimates can be sent from anywhere (not just the advisor’s desk). This is a quick way to reach out to the customer, putting them at ease. No information causes the customer to become angry. If thirty percent of the customers agree to text, just imagine how many phone calls into the dealership could be avoided. I understand that some of the older clients do not text, but make no mistake--the younger clients are on their phones all the time but not to answer it, to text from it. Search your app store. There are many free apps that will allow you to text for free without giving out personal phone numbers. Your competitors are using it. Why shouldn’t we? For fast help or assistance with this process, text me at (504) 415-0253 or email me at email@example.com. Feel free to call if you prefer. Written by Joe Carroll Succeeding As a Service Advisor - Part 2 This is Part 2 in a two-part article. If you missed Part 1 you can read it here: Part 1. Here are some ways to help you develop (and maintain) a positive attitude. Some of them may sound cliché, but they are tried and true for a reason. Boost your self-esteem If there is one common denominator about positive people it is a sense of high self-esteem. Appreciating yourself has to come first, and if you think about it, everyone has something they can feel good about. There are many things you can do to work on boosting your self-esteem. Make it a point to feel good about yourself first. Realize that everyone has strengths and weaknesses - it's human nature. Realize that it IS impossible to please everyone, and don’t take it personally! Use failure as an opportunity It is counterproductive to dwell on failure. From time to time it’s an unavoidable part of life. Anyone who ever says they’ve never failed is lying. But just remember, “Success is built on failure.” Use your mistakes and failures to learn. Find your own constructive criticism in failure and learn what to do or not do the next time. It’s a valuable lesson that provides opportunity. We’d never know about a famous product called WD-40 if its creators had stopped on the 39th try! Always do your best Failing as a result of NOT doing your best only compounds failure. A person can hold their head high in the face of failure if they know deep down in their heart they did their best. Failing because you haven’t done your best goes back to making a choice... and probably not a good one! Devote your energy to something good Make sure your actions truly contribute to something worthwhile. Being a good service advisor truly does help people in need. Strive to be innovative, unique, and seek new ways to do better every day. This will only add excitement to the job, and life in general! Do the right thing For most people, knowing what’s right and wrong is not too difficult. Knowing what should be done should be an easy choice; actually doing it is sometimes another story. Doing the wrong thing, may be the easy thing. Doing the right thing may take a little more work and may even mean putting yourself at risk. But in the end, it builds character and others will admire and respect you for it! Know what motivates you Most people really do not know what motivates them. Either they may not have taken the time to consider it or they are not aware of the basic scientific principles of motivation, or rather “what is it I desire beyond food, clothing and shelter” (i.e., Maslow’s motivational hierarchy of needs). “Self-actualization”, which is the realization of one’s potential, is the highest in Maslow’s motivational hierarchy. According to him, people will be frustrated if they are unable to use their talents fully or pursue their true interests. If you don’t know what motivates you, strive to find out. It will help direct your life’s energy in a more satisfying, productive and positive direction! Accept the rules of the game (or not) Every game has rules by which it is played; so does life and so does business. If the rules are wrong or “unfair,” strive to make them right. If the rules are not right for you, then you have another choice to make: learn to live with them, or find another game to play. If you make the CHOICE to live with the rules, it important to realize and accept the reality that most of the time we have no control over our work environment. This is one of the biggest steps in not only developing, but maintaining, a positive attitude. Realize and accept that it is impossible to please everyone. Realize and accept that it IS possible to please SOME of the people SOME of the time. Realize and accept that rejection shouldn’t be taken personally. In the end, developing and maintaining a positive attitude takes work and persistence. There is no substitute for a “never say, I can’t” spirit. Some of the most unlikely candidates for world-renowned success owe it to being persistent. If you are willing to be persistent and pay the price for your own success, make the CHOICE to start now, this minute, this second.... and go out there and “give me some attitude!” Written by Paula Bliss Succeeding As a Service Advisor - Part 1 This is Part 1 in a two-part article. Be sure to check back next week for Part 2. It All Begins Here “Don’t give me that attitude!” Ever heard that? Or, “You need an attitude adjustment.” I can’t count the number of times someone has spoken these words to me, and they quite obviously refer to a bad, or negative, attitude. The perception of someone having a negative attitude in the workplace can be detrimental. Succeeding as a Service Advisor (and in life in general) is largely determined by how others perceive you in your personal interactions with them. Most of us are simply one of many and to achieve what people regard as “success” means trying to please most of the people most of the time. Not doing so usually results in being labeled a failure, or even a rebel or outcast. This brings with it a negative attitude and all the unhappiness that society can unleash. In our culture, we expect many different things to create “warm and fuzzy feelings” from others and it can get very demanding, especially as a service advisor. Most people expect some the following personal characteristics and qualities from others, and especially from those serving others: Is trustworthy, honest Caring of others A good listener A top performer A healthy skepticism, not cynicism Has Integrity, do what you say you’ll do What others desire comes from a way of thinking, and it all begins with a person’s attitude! It’s Your Choice It’s a proven fact that the wrong attitude is the basis of failure, unhappiness and involuntary employee terminations. In the service department, all the experience, training, coaching, supervision and even pay plans are worthless without the right attitude. More people find themselves in an unhappy job because of the wrong attitude than for any other reason. This is a shame, because everyone has the power to have a positive attitude. Attitude is a CHOICE people make. Attitude comes from within a person. No one person can give another attitude. People make choices every day to be positive or negative in response to the challenges that work life presents. Attitude is really the only thing over which we, ourselves, have complete and total control. As humans, we have the power to make choices every day. Choices to make the best of a given situation, enter into a mode of personal suffering, or be happy or angry. Some people seem to be born with positive attitudes (and at times, may make their co-workers wonder about their sanity), but the rest of us have to work at being positive all the time. Let's Get Positive The first step to developing a positive attitude is to recognize that it's a challenge. Most people who have negative attitudes have them for a reason: it's easier! The next big hurdle is making a deliberate effort to change and not give up. It can be, for many, a big challenge to develop a positive attitude. But remember, you have a choice, and choosing a positive attitude leads to success! Continued next week in Part 2! Written by Paula Bliss Take A Fresh Look At Your Service Department When is the last time you really looked at your service facility? When we work in place every day, it’s easy to get “tunnel vision” and not notice changes in the surroundings in which we inhabit. We become so focused that we do not notice the changes in our environment that have happened slowly over time. One way to get a fresh look is to go to your facility when it is closed. Take a note pad and pen and write down everything that doesn’t meet your standards. It won’t take more than an hour and I promise you that you will be surprised at what you notice without all of the activity of a normal business day. Start as you drive up, is the signage directing the customer clear? Is the parking lot clean and the customer parking area well defined? Keep in mind that the first time visitor has no idea what to do after entering the lot from the road. As you enter the door to the service drive, notice if the hours of operation are clearly posted and accurate. Is the service drive clean and free of any clutter? Check the walls and ensure that all of the advertising posters are up to date and secure, not torn or drooped over. Are the tire displays clean and clearly marked? Take a look at each of your advisors work areas. Are they clean and free of clutter? Do they have a good supply of up to date Menu’s and other handouts such as accessory brochures? Make detailed notes of your findings as you go. As you enter the shop area stop and look in all directions including up. Are all of the lights working or are there bulbs out? Is the drive area floor clean? Next, take a look at each technician’s stall. Is it clean and free of clutter? Are there any cores or new parts or warranty return parts lying in the open? Are any of the air hoses “hissing” and in need of repair? What is the condition of the drop lights? How many open fluid containers are sitting around? Are the technician’s benches free of clutter and trash? Is any of the equipment in need of repair? Leaking hydraulic jacks? Are there any shields missing from bench grinders? Make more detailed notes. Next, check the special tool room for organization. Can the special tools be readily identified? From a productivity standpoint, countless hours are wasted in many shops just looking for special tools. Consider putting them under the control of the parts department and having technicians sign them out and back in. Next, let’s check the customer waiting area to look for cleanliness. How is the furniture? Is the upholstery faded or stained? Are magazines and other reading material up to date? Are the displays current and all pricing correct? Let’s take that list and turn it into an action plan. You don’t have to do it all. Delegate items to people you are paying to get these things done. Be sure to follow-up on any delegated chores to insure completion. It’s a good idea to take a fresh look at your service department every three months or so to keep things in order. It’s very easy for things to slowly change over time without us noticing during the normal course of business. Why Do You Think They Call It Waiting? Is there a Service Advisor alive that hasn’t heard these words from a Technician in response to a plea to hurry up on an oil change? I know I have heard it more than a few times while visiting a Dealership. The truth is that it’s rarely the technician’s fault when a simple maintenance service takes longer than promised. The actual time a vehicle is in a Tech’s bay is usually a small portion of the total time involved when a simple oil change, tire rotation and multi-point inspection takes longer than 35 or 40 minutes. How is the “headlights to tail lights” time in your dealership on a wait maintenance service? How long does it take from the time a customer pulls into your drive until they pull out with receipt and thorough multi-point inspection in hand? Have you timed it recently? I have witnessed everything from less than 30 minutes to over 2 hours! Pick any morning during “jailbreak” time and perform a time study. It’s important to perform the study during peak times because those are the times when processes are abandoned and where our opportunity to improve lies. If your total time is over an hour, most often you will find that the vehicle is actually only in the bay 20-25 minutes of that time. In order to move the needle in a positive direction, we must first determine where our best opportunities exist. I suggest breaking your time study down into the following sections: Write up time (including the time it takes the customer to be greeted) Pre-bay time (the time from when the vehicle leaves the service drive until a technician gets into the vehicle) Actual In-Bay time (from the time tech pulls in till he pulls out) Post Bay time (time from when the tech exits the vehicle until the customer shuts the door to leave) Wash bay time - OPTIONAL (If you wash customer’s vehicles, time the wash separately) Perform several of these studies with different advisor/technician combinations. What is your average time? In which area of the process could time be improved? Use the above data to design a written process for all Quick Maintenance services. When writing the process, be very specific in listing each step and who performs it. Look for opportunities to reduce time that vehicle sits idle. Identify ways that will allow everyone who comes into contact with the vehicle to know not only that the vehicle is waiting, but how far along in the process it is. It’s all about accountability. Here is a sample process: Greet customer on service drive using M5 Motors Customer Interactive Process, to include a Menu presentation and permission from customer to perform a multi-point inspection. Service Advisors to designate vehicle as Quick Service Waiter by turning on hazard lights and placing work order under driver’s side wiper blade. Porter/Advisor pulls vehicle ahead into designated “Quick Service Waiter Parking” and turns off hazard lights. Porter/Advisor places work order in Quick Service Rack in next available slot. Next available technician selects work order from lowest slot available in rack OR is assigned work order by Shop Foreman as needed. Technician to make multi-point inspection the first operation completed. (If inspection results in an additional sales request (ASR) - give work order and multi-point inspection to advisor to present to customer while maintenance is completed) Upon completing work order, technician then marks current time on driver’s side windshield, turns work order into advisor for booking and parks vehicle in designated “Quick Service Wash Parking.” Wash bay personnel selects vehicle by oldest time on windshield, after wash is complete, turns keys into Service Advisor and proceeds to hand dry vehicle. Service Advisor then escorts customer to cashier, explains invoice line by line, and reviews multi-point inspection findings while wash bay personnel completes vehicle. After cashiering, advisor then escorts customer to vehicle and thanks them for their business! Give it a try! Find out what will work best in YOUR Dealership. It may surprise you that by following these simple steps, you may drastically reduce the cycle time on quick maintenance services. Put the “quick” back in a Quick Maintenance Service in your shop!