A “sacred cow” is considered too revered, too established to change. In everyday language, it’s a process, structure or methodology you don’t mess with, such as the excuse: “We’ve always done it that way.”
On the other hand, “at the heart of an innovative culture, you’ll find a spirit of open-mindedness and an eye towards future trends and their business impact,” Inc. magazine once noted. “Regardless of your company’s size, one scenario that often stops progress is the presence of ‘sacred cows’ — beliefs that go unchallenged, effectively placing blinders on the company’s leadership.”
Sacred cows are being toppled at Steven Toyota-Kia-Nissan, a three-location family-owned dealership operation headquartered in Harrisonburg, VA.
Sacred cows there were eroding profitability and frustrating service staff and their customers.
Then the company set off in several new directions, toppling those old habits, said Matt Sodikoff, director of fixed operations.
“We recently bought the staff copies of the book, Who Moved My Cheese? about a mouse who must learn to adapt as his normal feeding station is constantly being moved. We’re moving everyone’s cheese now — for our customers’ best interest, not ours,” Sodikoff said.
Steven Toyota was founded in 1992 when dealer Steven Sodikoff, Matt’s father, purchased a thrice-owned dealership and turned the Virginia franchise into one of the best in Toyota’s Central Atlantic Region. Today, Sodikoff and his brothers are all active members of the dealer group: Ryan, the oldest, is the Toyota store GM, with Cory as that store’s general sales manager, and Jake, the youngest, is the GM at Steven Nissan.
In 1995, expanded service facilities included state-of-the-art clean-up, detail and reconditioning departments to help meet growing sales and service demand. More parking was added in 2000. In 2006, an expanded and remodeled showroom greeted shoppers, and in 2010, even more parking was added to support its growing used car business.
Changes underway now include:
• Customer-pay revenue
• Customer engagement
• Used car reconditioning.
“We control customer-pay in that it’s our marketing, processes and people that determine our customer-pay business. This means we must be competitively priced, very transparent in what we do and put forth a great team that’s efficient and friendly before the public,” Sodikoff said.
Part of this change includes capturing video multi-point inspections and then pushing that footage to customers’ mobile devices. The video enables the technician to explain inspection findings rather than an advisor interpreting techs’ remarks on a traditional red-yellow-green multi-point form. Sodikoff said consumers respond well to these video explainers.
“We are expecting a 10-minute reduction in customer-pay repair order time and a 20% increase in customer-pay labor and parts revenue based on projections. We must use the video on 80% of the repair orders to see these benefits,” he said.
A new scheduling initiative is in the works too.
“This is an untapped potential for us,” Sodikoff said. “We have a rigid work schedule, but we’re learning that to attract the best of the best advisors, techs or BDC people, we can’t be like that. We saw the alternative in action at a Cincinnati dealership where, instead of setting 8-to-5 shifts, they ask their staff, “What schedule’s ideal for you?” Then they adapt and work within that. What happens is a better working relationship and reciprocal attitude — you scratch my back and I’ll scratch yours.
“The future is, we’re going to a dispatch model where work is assigned according to experience and work-type preference. Now we’ll better even out workloads, so one tech isn’t busier than those around him who are waiting for work,” Sodikoff said.
A rigid write-up process also tanked, replaced by a flexible variation designed to enhance service customer engagement and satisfaction. In this new format, appointment bookings are done under the dealership name, not an advisor, so anyone is available to engage customers as they enter. This change has made a remarkable difference, Sodikoff said, in customer engagement.
A visit to another dealership using this model brought the idea to Sodikoff’s mind.
“We learned how differently they did certain things. This new ‘I can help you’ attitude versus the old ‘who are you here to see’ greeting has quickly made us a much more successful operation,” Sodikoff said. “We’ve reduced friction and frustration in the write-up experience.
“We’re now removing all the barriers to putting guests first. We expect these changes to mean less stress and an environment where everyone can keep growing and improving.”
The longest-running change Steven Toyota has made, with one of the most profitable results, is the automation of its reconditioning processes. Its use has meant additional turns of inventory.
“So, if we want to sell 100 cars a month, we need an inventory of only 80,” Sodikoff explained. “The second benefit from this change is simplified reconditioning, so our recon personnel are less stressed and their morale is high.”
Accurate recon performance measurement offered evidence for further fine-tuning.
In a group meeting with staff, he suggested their routine process of opening a work order when a car arrived (and might sit idle over a weekend) be dropped; instead, used car managers now immediately open repair orders to start the recon clock.
“So, the recon dispatch bucket truly starts no later than the second day after we’ve acquired the car,” he said.
However, the most dramatic change in its recon efficiency occurred after Rapid Recon Founder and CEO Dennis McGinn asked, “Who’s responsible and accountable for managing your average days in recon (ADR)?”
“We went silent,” Sodikoff said. “We were always just chipping away at those recon performance numbers the best we could, but Dennis’ remark was our ‘aha’ moment. We ended up creating ADR incentives for both used car coordinators at the Nissan store and the Toyota-Kia store.
“Ever since, we’re meeting regularly to improve recon performance. Staff is receptive to these changes, because faster ADR drives time to line, and with that, they make more money by working together to get our ADR down,” Sodikoff said.
“Our goal is cars sale-ready in four to five days, and we’re working toward that.”