Sample material:
In today’s economy in the automotive sector, dealers and managers must work smarter and have the desire to take business to the next level and beyond. Not tomorrow or the next day, TODAY.
Which of the statements below describes your service and parts departments?
1. Is the aftermarket sector of the automotive repair industry biting into your profits?
2. Are your clients frequenting another competitor?
3. Are your expenses starting to outweigh or significantly bite into your profits?
4. Have you seen a decline in your service appointments?
5. Have your margins declined on your parts sales?
6. Is your service CSI suffering?
If you answered yes to any of these questions then this book is for you. Today’s market is the worst in decades with managers and owners facing challenges that have not been seen since the nineteen-thirties, and don’t compare in this sector of business. To understand where you are going in business it is fundamentally imperative to understand where you have been over the last twenty four months.
Were you making a significant profit before the market downturn? Were you holding your own? Were you are losing money on a regular basis? Have you always reported profits but want to do better? Have you lost, maintained or increased your client base? Have your parts sales declined, increased or maintained the same? Has your CSI declined, increased or is it about the same? Have you lost any valuable employees due to a wage freeze? Do you want to conduct business better and make more profits? Are you struggling to keep what business you have?
Before you begin my process you must first envision your completed end result in your mind. Imagine taking a two month holiday – the holiday of your lifetime – without first giving thought to where you would like to go, where you would like to stay, where you would like to eat and what attractions you would like to visit? While it might be fun and exciting at first to jet off into the sunset without a plan or care in the world, it would begin to wear you and your patience down, especially when you get lost and don’t enjoy the towns, cities or attractions you are visiting. This is why it is so important to plan first!
The first item of business is to track your customer base and see if you have lost customers. The second step of this process is to find out why you lost them? Are you priced to high? Do you regularly shop your competitors? What do your competitors do with customer facilitation that you don’t?
What do your competitors do better than you do? Do you have the right employees and managers to get back to the business of making profits? Do your management and employees have the right training to competently perform their jobs? Do you have the right equipment, software and support staff to make inroads on progress starting today? Does the FSM, (Field Service Manager) from your brand share knowledge with you whereby you can compare yourself to other dealers in your market area instead of only having the knowledge of what is taking place within your own four walls. Are you marketing your business properly, always keeping your name in front of the customers you already have?
Consider the answers you uncover in my book as the backbone to piece together your business plan for your service department. The items you uncover will form the basis of your service profitability plan or roadmap, and allow you to objectively analyze each key core component of your business plan, namely: your target market, your competitors, your operational requirements, and your employees and how each employee impacts your ability to build and sustain growth and profitability.
There are so many items to address within a dealership service department that could possibly need to be addressed, it would have taken a lifetime to complete the book, and therefore the items contained within the pages are the most necessary and basic items. Unfortunately when looking at most dealership service departments the key core elements or the fundamentals have gone to the way side. It is critical to ensure that all key components are in place and functioning at 100%. Getting back to the basics and providing your customers a quality servicing experience. Excellent service keeps them coming back and drives your growth. Most dealerships need to get back to servicing 101!
Throughout my book there are statements with answers, check off the box with the answer that pertains to your dealership in each category. At the end of each chapter there are questionnaires with specific questions to make you think about certain aspects of your facility, such as operational procedures. All of the questionnaires and spreadsheets contained in this book are available on our website and we can tailor spreadsheets to meet the needs of your individual department. As you read through my book always envision your facility fixed, what is the end result? You will be required to write your thoughts and ideas out as you move along through each chapter.
A car dealership hitting 100% service absorption is like your favorite football team winning every game during the season. That scenario hardly ever happens, but it would be fantastic if and when it ever did! Since the decline of the markets caused the reduced traffic in most showrooms, now is the time to think about service absorption rates to offset the lean sales figures in your dealership.
To sum up what I am referring to, service absorption is the percentage of a dealership's total operating costs that the service and parts departments offset through their gross profits. If running your dealership for example, costs you $225,000 a month, and the service and parts departments combined gross profits makes $225,000 a month, the service absorption rate is 100%.
The only way to achieve 100% absorption rate is to systematically train your employees in every aspect of their individual jobs and provide your customers with the best possible service. Training your employees and having the right processes, policies and procedures will raise your dealership to new levels and this also increases your credibility with your customers.
Once you have created the exceptional customer service dealership, your retention levels will be revved up and your absorption rate will climb. You need to pay constant attention to your service department because that's where the business is and that's where you future sales are made. Customers who are satisfied with your dealership's service department are more likely to buy their future vehicles at your facility. In today's tough economy, it's not the new or used car sales department profits that drive the business. It is your fixed operations that consistently drive the business forward and sell you more vehicles.
Did you know that in the year 2008, the average dealership employed 55 people and had an annual payroll of just over 2.5 million dollars? This number represents almost fifteen percent of the United States total retail trade payroll at a whopping 54 billion dollars inclusive of all new and used car dealerships within the country. During the year 2008 the total number of dealership employees nationwide was just over 1.1 million. These are astounding numbers! This is the reason to train your employees to be the best as there are over twenty-thousand new and used car dealerships nationwide. That is a lot of competition and huge market opportunity for those that drive their service departments to the next level and beyond.
Remember the definition of insanity is performing the same thing over-and-over again the same old way and expecting different results each time!
I have created this blog with the intention of helping Dealerships and Aftermarket service facilities increase the level of servicing to thier customers and that of the bottom line. I believe that we in the automotive industry MUST get back to the basics of servicing our customers the way WE would want to be serviced. This will in itself increase gross profits, customer retention and improve the industry in the eyes of our biggest source or revenue - OUR current and future customers.
If you have questions regarding profitability, CSI issues, Procudural issues, Policy issues, accountability issues or profitability, please post your questions. Should you have stories about items you have addressed in your service facility that made a difference in the servicing, moral, productivity or the environment please share your experiences.
Remember when instilling changes in the business, your employees wont buy into your proposed changes until you show them the benefits of change .
