If I showed you a business plan on how to sell an additional 250 new vehicles in the next 12 months at an average gross PRU of $2,000 for a total gross profit increase of $500,000, would you tell me, “I don’t have time for this”?
It Happens All the Time
Over the past 15 years, my trainers and I have worked with hundreds of dealers to improve their fixed operations by using processes that always put the customer first in their daily operations. This, of course, has had a big impact on CSI, owner retention, increased sales and net profits, yet I continue to meet so many dealers and general managers who fail to appreciate the real opportunities just waiting to be tapped in the “back end” of their store.
Last month, I was speaking with a dealer about training his fixed operations team on how to “put the customer first” in his daily operations in his service department. I reviewed a profit pro forma with a business plan for implementation and, before I could finish, he said: “I don’t have time for this so you need to review this with my service director because he will be the one to make the final decision. If you can’t get his ‘buy-in,’ then we don’t need the training.” Really?
If you’re a dealer or GM, here is my question for you: “If I sat in front of your desk and showed you a business plan on how to sell an additional 250 new vehicles in the next 12 months at an average gross PRU of $2,000 for a total gross profit increase of $500,000 over what you’re currently producing, would you tell me, ‘I don’t have time for this so you need to speak with my sales manager’?” Would you really have no interest in learning how to sell those extra 21 new units per month? I don’t think so!
Well, that’s exactly how much gross this dealer could have earned in his service operations, so I ask you, “How about a little support for fixed operations?”
What’s Going On?
As a dealer, do you spread your time equally between fixed ops and your sales departments? When was the last time you walked through your parts department and just said “Good morning” to your parts personnel or walked down the center of your shop and asked a tech, “How’s it going today?” Here’s a wild thought: why not spend 10 minutes in your service reception lane and greet a few customers with a great big “Thanks for your business”?
By the way, don’t forget those hard-working advisors with maybe a pat on the back for a job well done. A few years ago, I took a dealer of mine on a walking tour of his service and parts departments and asked him to just say “Good morning” to his employees as we walked past. Once we finished our tour, I returned to the shop to find 14 technicians, a shop foreman and service manager in a huddle having a heated debate. I asked what was going on and the service manager replied, “I’ve worked here for 12 years and this is the first time the dealer has ever walked through this shop – something bad is about to happen!” Again, I ask: “How about a little support for fixed operations?”
Back to my dealer who did not have time. Here are just a few of this dealer’s performance metrics in fixed ops: customer-pay labor gross @ 58% – CP parts gross @ 39% – HPRO at 1.3 – one-item ROs @ 63% – shop productivity @ 80% – fixed coverage @ 45% – CSI @ 9 points BELOW group average. Hello, I’m not making this up!
If he can’t get his service director’s “buy-in,” then he doesn’t need the training? Are you kidding me? Why would any manager who has the dealer’s best interest at heart even hesitate to buy in to the fact that he can do better, he needs to change, he must start doing some different things in order to maximize department profitability, improve CSI and build owner retention. Answer: UNDERACHIEVER!
Any manager who wants to do better and learn to become a top performer would not hesitate to do whatever it takes to improve on those pathetic performance metrics that I outlined above, not to mention add an additional $500,000 in retail gross profit.
As a dealer, are you running a Democracy? Do you really need someone else’s vote?
Are you not the one who deserves a higher return on your investment? How much did your underachieving, lack-of-buy-in manager invest with you? How much risk did they take in starting your dealership?
As you can probably tell, I’m starting to get a little worked up here, but here’s the bottom line: Why would anyone not want to learn how to always put the customer first?
So, how about a little support for fixed operations?