Earlier this year, I was invited by a client to speak at his 20 Group meeting in Denver. This group wasn’t any different than the others I’ve spoken for recently. A little over half of them were not profitable in service and 13 out of 20 were in the red even after the parts transfer.
Now, anyone who knows me understands that I believe very strongly that being profitable in fixed ops is the No. 1 priority for a dealership that wants to be successful. That’s because, at the end of the day, it’s mindless to work that hard without making a profit.
When I see a service department losing money or an unhealthy dealership with low fixed absorption, I see a business with managers who are conditioned to lose, are severely unfulfilled, dragging around all day, just to be left with a feeling that they lost more than they won. Those days stack up and become months, months become years. It’s a terrible existence.
You can’t escape this reality. I see people who need someone to help them realize their full potential, and escape the negative cycle. That’s what I see.
So, back to that 20 Group. At a break, one of the members, Jason, approached me. Good-looking kid, maybe 35 years old from Seattle, where I grew up. A Seahawks season ticket holder.
He told me what a big fan of mine he was. He was proud to tell me he had read all of my books and had bought my fixed ops program. Loved it, learned a ton. It made a lot of sense to him.
He goes back to his seat, meeting starts back up and I look him up in the composite.
He was No. 6.
Now, after talking with him, I would assume that he would be one of the handful on the left side of the page making money. Ends up though, he’s losing money. Fourth from the right side of the page or fourth least profitable out of 20 dealers.
My heart kind of sank.
I don’t believe anyone sets out to run an unprofitable department. No one wakes up every day and says, “Hey, let’s go see how much money we can lose today.”
What does happen is that over time, we accept failure as being OK. It’s easier to keep doing the same thing we have always done, than it is to change. “My market’s different,” and “what if it doesn’t work” becomes the narrative. Then failure becomes accepted as normal.
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I often sit in these 20 Group meetings looking around the room and wonder how it’s OK for more than half the room to be losing money. No one raises their hand and says, “Enough is enough. Let’s stop talking about the factory, car washes, loaner cars, etc. and start talking about the basic reason for business. Profit! We aren’t victims here. The economy is good.”
At the lunch break, I pulled Jason aside and asked him why he hadn’t implemented any of what he learned in my fixed ops program. His face told the story before the words escaped his lips. He just hadn’t.
You have to wake up to get up. You have to put on your shoes to work out. Open the door to go inside.
In other words, you have to take the first step. He just hadn’t taken the first step. He hadn’t felt what it’s like to see the positive outcome of a new strategy or system. It’s scary, but not as scary as doing nothing.
On the flight home, I was staring out the window into the horizon, thinking about what I had just experienced and doing an inventory of it all in my head. The sky was bright blue and clear as far as I could see. It never ended, just rounded off into a light blue that slowly disappeared over the horizon.
A couple hours into the flight it hit me. What they need is a challenge, something big enough, exciting enough to get them to take the first step.
Since I had been eyeing the new Jeep Gladiator truck, I decided to buy one and drive it for a year. Trick it out with a lift kit, wheels and the obligatory gun rack. Then, at the end of the challenge, I’ll give it to the manager who steps forward and shows the biggest improvement. The manager who reaches their full potential. It’s You vs. You, competing against your own results!
No one has ever done anything like this before, but I can’t sit by and do nothing.
That’s why I am giving away my brand-new pickup truck.