BG Products Industry News

The primary purpose of a professional service advisor is to sell service, or as Scott Russeau puts it, “inspire your guest to invest!”

Earlier this year, I attended one of Russeau’s energy-packed workshops. (Okay, it wasn’t a workshop as much as it was a workout!) Russeau is passionate about giving dealership customers a positive, consistent, predictable service drive experience—one that focuses on educating customers and inspiring them to invest in themselves by investing in their cars.

Before we unpack the process, let me tell you a little bit about the man. Russeau, a high-performance fixed ops trainer and coach is as comfortable on the service drive as he is in the classroom. His credibility comes from experience: in the trenches as a technician, on the front lines as a service advisor, in leadership as a fixed ops director, and at the top as a general manager. He gets it, because he’s done it!

Here are five takeaways from the workshop that, if implemented, will have an immediate impact on your service sales success and hence, your bottom line:

Inspire Your Guest to Invest

Inspire – Not pressuring, not begging, not arm twisting, but clearly educating, communicating, offering, and asking. A guest who is inspired takes action; they purchase.

Guest – An honored, unique person that invested their time and energy to enter your service center. “Of all the places they could have taken their car, literally thousands of service centers across America, they chose you,” Russeau said.

Just like a guest in your home, folks on the service drive deserve your highest respect and your undivided attention. You’ve got to treat them like family. They are why you came to work; without them, you are out of business.

Invest – Informing your guests about their vehicle needs and selling tech-recommended service is not something you do to your guests, it’s something you do for them. When they invest in brake pads and a brake fluid exchange, they receive increased safety and stopping reliability in return.

Inspiring your guests to invest in their vehicle is done for the benefit of your guests. They get a greater blessing by having a safe, reliable, trouble-free vehicle that gives power, performance, and that is fun to drive. And don’t forget about saving money. Maintenance is always cheaper than repair, and fuel economy is best when a vehicle is well-maintained. What a great return on their investment!

As an automotive professional, you are in business to make money. So here’s the win-win: the more tech-recommended maintenance and repair that you sell, the more money you make—and the more money your guests save.

System Selling

Russeau warned against offering service a la carte when presenting an estimate. Don’t quote a left outer tie rod for $200 and an alignment for $100; rather quote the suspension “system” repair for $300. You wouldn’t do one without the other, so keep it simple and quote it that way.

“You’re not selling parts (the rods) and labor (time),” Russeau said, “You are selling safety, peace of mind, a smoother ride, reliable vehicle control, and driver confidence.”

Package Pricing Technique

This is similar to system selling, but it is a comprehensive price quote that includes the primary concern and related items, immediate safety needs, and recommended maintenance. The process is used when organizing and presenting the results of the multipoint inspection to the customer.

First, the advisor organizes the tech recommendations into three categories: primary and related concerns, immediate needs, and recommended maintenance. Next, he reviews each item with the customer. Lastly, he quotes one price for the entire package.

If the customer says yes, you communicate with the tech and he gets to work. If you get hit with a price objection, then “sell up” (read on).

The Sell-Up Process

The priorities are:

1. Primary and related concerns

2. Immediate safety needs

3. Recommended maintenance

Sell up (from bottom to top) means you might drop recommended maintenance from your price quote, but then you would move related maintenance items up to item #1. For example, if the primary concern was hot air blowing out of the A/C, you would move cabin air filter replacement from the recommended maintenance category up to the primary concern category because it is a related item.

Likewise, if the technician finds a weak, corroded battery, then battery replacement becomes an immediate safety concern. Therefore, you would move battery protection pads and terminal cleaning up from the recommended maintenance category to the immediate safety needs category because it is related to the safety concern.

To clarify, let’s say our original quote included a cabin air filter, a battery service, an alignment, and a transmission fluid exchange in the recommended maintenance category. By selling up, you still get the cabin air filter and the battery service, even though you drop the other maintenance items. The package price drops and yet you still retain two services you would not have had if you hadn’t sold up.

Related, Immediate, Maintenance (RIM)

The RIM process has been around for decades, but Russeau’s twist on the process brings a fresh approach to RIM…with amazing results. I’ll fully explain RIM in detail in a future article. For now, I want to leave you with a simple yet effective word track Russeau has crafted to “inspire your service guest to invest.”

“Related to your original concern(s) for your vehicle, your technician has found that your vehicle needs…”

“From the multi-point inspection we discussed earlier, we found a few items that require your immediate attention.”

“Last but certainly not least, your technician has asked me to talk to you about the following maintenance needs…”

“So to take care of everything related to the original concern, all the items that require immediate attention and your maintenance needs, your total investment is $____. May we please take care of that for you today?”

Every process in your dealership falls into one of two categories; it’s either administrative or revenue-generating. Granted, every job description of every service employee has a certain amount of administrative duties, but the majority of the processes they follow must be revenue-generating.

Rex Weaver says it like this (when talking about where to focus your training): “If your training revolves around processes that are administrative and not revenue-generating (like salesmanship), you need to re-shuffle your training schedules.” Weaver, service director of Mercedes Benz and Porsche of Lehigh Valley in Emmaus, Pennsylvania, goes on to say that ongoing, consistent training of your revenue-generating employees is one of the most profitable moves your dealership can make.

“If you aren’t spending time every day in salesmanship training for your advisors, then you have no idea what your ultimate potential can be,” Weaver concludes.

Well said. And speaking of training, most new and used car departments rally the team for sales training every day, yet many service managers I talk to have never had a service sales meeting. Oh, sure, they may have a monthly service meeting, but they rarely discuss sales goals and the selling skills needed by techs and advisors to hit the numbers. That’s got to change.

Your new and used car sales department is, by definition, a sales organization with a sales culture. Your service department must also, first and foremost, be a sales organization with a sales culture. Additionally, revenue-generating employees (advisors and technicians) must have revenue-production-based pay plans. That means no earning cap…the more they sell, the more they make. (Outdoorsmen and hunters understand this concept; “you eat what you kill.” Otherwise, you go hungry.) When your personnel sell lots of maintenance services, they should make lots of money. Passive order-takers deserve to starve.

You don’t bat an eye about offering a spiff to your new and used car sales team to sell vehicles that have been on the lot too long. Oftentimes, you have fun with it and offer a $250 bonus for the first car sold before 10:00 a.m., or something along those lines. Therefore, don’t be reluctant to offer a spiff to advisors for selling preventive maintenance services. Have fun with it. Pay $5.00 for each service sold and start a Century Club for those advisors that sell over 100 services a month. Give them a $100 bonus each month that they earn Century Club status. How about an additional $100 for the first advisor to hit 100 maintenance services for the month?

Advisors are not administrative-process-driven-paper-pushing-clerks….no, no, no. They are revenue-generating, production-based professional sales people!

You wouldn’t tolerate a car salesman who wouldn’t sell cars, right? Then why on earth would you tolerate a service advisor that won’t sell service?

There are only two things in life: knowing and doing. That said, let’s unpack this further. Training precedes knowing. Accountability precedes doing.

Forgive me for stating the obvious, but don’t expect your advisors to sell maintenance if they haven’t been trained in the art of selling. Selling skills, overcoming objections, and closing the deal are learned behaviors. You can’t send someone to training once and call them trained; sales training must be ongoing. Your service sales team must routinely practice, drill, and rehearse.

Countless business studies have shown that people do more and perform at a higher level when there is an accountability structure in place. Everyone’s production increases when they know you are watching. (Obviously, I don’t mean that you should stare a hole through them every minute of the day, but direct observation for a few minutes every day is good.) When an employee knows the boss is looking at their numbers, guess what? Their numbers go up.

The opposite is also true. According to Dave Anderson, some people complain about the money they don’t have from the work that they don’t do! They do just enough to get by. They could do more, but they just don’t want to. Heaven forbid that the employees learned this attitude from the boss! Basically, they have learned that no one above them cares, so why should they?

In closing, here are some characteristics of a healthy sales culture:

Clear Goals and Expectations. If nothing is your goal, you’re sure to get it—nothing. Training, Mentoring, and Coaching (not screaming, ranting, and cursing). Management by fear and intimidation is not leadership.

• Practicing, Drilling, and Rehearsing. The greatest sports heroes and teams never stop training or improving. The world’s greatest musicians never stop practicing.
• Marketing and Merchandising Tools. Equipping your service sales team with menus, multi-point inspection forms, tablets, videos, processes, and point-of-sale materials to help them close the sale.
• Accountability Structure. Don’t overthink this. Decide your top three or four revenue-producing key performance indicators and monitor every tech and advisor every day.
• Celebrate Milestones Publicly. Celebrate and reward your parts and service team when they knock it out of the park one month. Publicly award top achievers who meet their numbers.

Fixed ops is first and foremost a sales organization. Make it a priority in 2019. You can do this.

“You don’t build a business, you build people—then your people will build your business!” –Zig Ziglar

Wow! That’s powerful, isn’t it? Zig Ziglar was my hero for over 40 years. Even after his passing, his words still inspire me.

Business men and women always say people are their most valuable resource; yet all too often they don’t provide the resources and training necessary to grow their people.

To clarify, I’m talking about consistent, intentional, planned training. Practice, drill, and rehearse. Follow-up and accountability. It is so easy to get caught up in the daily grind of taking care of business that training gets pushed to the back burner.

When training does occur, it is often used as punishment. I’ve actually heard service managers tell their advisors, “Whoever doesn’t hit their numbers this month will have to go to training!” Oh brother! Don’t be the moron that says that.

Service departments can never stop training. The “knowledge retention” curve declines quickly, meaning people only remember 10% of what they learn. Therefore, constant reinforcement is necessary to turn knowledge into action, and to turn action into revenue.

Training is never ‘one and done.’ No one is ever completely trained—rather, it is an ongoing career-long process.

Some managers say building their people is a waste of time—they’ll just quit and move on. I have heard it said that it is far better to train your people and have them leave than it is to not train your people and have them stay!

Max Zanan wrote a wonderful little book called “Perfect Dealership” (perfectdealership.com). It is a quick read that’s packed with nuggets of practical advice on running a dealership.

Zanan wraps up the book with the Ten Commandments of Success. Three of them focus on personnel development:

• „Remember, automotive retail is a career, not a temporary gig.

I believe techs get it, and they’ve made a huge investment in their tools to further their careers. I think the biggest challenge dealers have with techs is keeping them at your dealership. Working conditions, work load (read that as not enough work to do), production-based pay plans, and continuing training are all potential deal breakers. Lube techs and service advisors often view their jobs as less of a long-term career path. These folks are way too transient and often bounce from dealership to dealership. I am truly amazed at the turnover of advisors. If a guy is an order-taker at the Toyota store, then he’ll be an order-taker if he gets hired at the Ford dealership across town.

• „ Focus on employee development that provides a path for career growth.

Remember what Zig says: build your people and they will build your business. Don’t get cynical because of a handful of jerks that don’t want to grow and get better. Most of your people are good people that want to do better; they aspire to more—more money, more responsibility, more productivity, more respect.

• „Attract a better workforce by having better pay plans, schedules, and training.

I get the part about pay plans and training, but schedules? I’m motivated by money and I thrive on a production-based pay plan, but not everyone does. There is a growing segment of the workforce that values time off and flexible schedules. They aren’t lazy, they don’t want something for nothing, they just want it on their schedule. A three-day weekend and two Saturdays off per month might be a game-changer for these folks. As a manager, don’t have an attitude that says, “hey, I’m in charge and my people will work when I tell them to work.” At least look into what motivates your people and see if you can accommodate them. Maybe you could tie sales production to flex-time off. Going back to pay plans, I’ve seen dozens of advisors that believe the only way to get a raise is to move to a different dealership. Tragically, all too often, they’re right. Just when they start making good money, the pay plan changes and out the door they go.

Action Points:

„ You must be intentional with your training. Schedule a service sales meeting with all fixed ops personnel once a month. Make it a big deal where you feed everyone, celebrate victories, and reward production.

„ Train your service advisors on how to sell. I’d suggest 15-30 minutes per week. Consistently reinforce the message. Spend half the time reviewing last week’s training and the remainder on new material.

„ If you’re hung up on exactly what to do, then subscribe to a blog, podcast, or video series from Dave Anderson. Show one clip at each weekly training session. Give your team access to Dave’s library of free resources (learntolead.com)

„ You might also want to check out all the service advisor sales training resources provided by Jeff Cowan (automotiveservicetraining.com). Jeff has an amazing ability to simplify word tracks that advisors can use to close the sale.

„ Lastly, I work with a team of over 700 fixed ops trainers spread out across North America. Let me know if you’d like to connect with one of them for live in-dealership training.

If you build your people in 2019, if you invest in their development and growth, then they will build your fixed ops department into a vibrant revenue stream for your dealership.

Happy sales to you and Happy New Year!

Ask any dealer, general manager, or sales manager how many cars they need to sell this month and they’ll immediately know the answer. No matter what day of the month it is, they’ll know where they are and what they need to do to hit the goal.

So, how many labor hours do you need to sell this month? How many hours do you have month to date? How many hours do you need per tech, per day to hit the goal? What would happen to gross if you were to sell just one more hour per tech per day?

Oh, and how’d you come up with the goal? One last question: What is the exact plan you have implemented to sell the needed hours?

If you are struggling with answering these questions, you are in good company. Earlier this year I had the privilege of attending a meeting of automotive professionals in Wichita, Kansas to learn from one of the smartest guys in the industry, Jim Phillips. It was two days of hard-hitting, no-nonsense training. Phillips, a consultant and trainer with Cox Automotive, presented Fixed Ops Essentials to the group and graciously gave me permission to write about his powerful takeaways.

The workshop attendees were some of the best and brightest in the industry and most of them had trouble pinning down exactly how many hours per month they needed to be profitable.

The reason service managers, general managers, and dealers struggle to know how many labor hours they need this month is because they may fail to see fixed ops as a business—specifically, a sales business.

Phillips cited statistics that showed used-car gross profits have dropped from 13.7% in 2011 to 11.7% in 2017. New-car gross has dropped from 4.5% in 2011 to 2.5% in 2017. This trend of increasingly compressed margins will continue for the foreseeable future. So, how do dealerships make up the loss? By looking to that faithful cash cow called fixed ops. Labor gross remains at a whopping 73%—and it’s not going down. Labor (read that as “time”) is your most profitable commodity, but it is also the most perishable. Whatever cars you don’t sell today will still be there tomorrow, whatever parts you don’t sell today will still be on the shelf tomorrow, but whatever time you don’t sell today will be lost forever.

That’s why Phillips says we have to help our techs be more productive and efficient—because time is too valuable (and profitable) to waste.

Phillips challenged the attendees to share their best practices to increase shop efficiency. Here are the takeaways:

Move cars waiting to be serviced closer to the building. If the tech is having to walk to the back of the lot to find a car, he’s wasting a lot of time.

Deliver parts to the techs instead of making them walk to and then wait at the back parts counter.

Sell maintenance services! Most maintenance services are 200% – 300% efficient. (The service flags an hour, but only takes 20 minutes to do).

Upgrade your equipment—make sure technicians have the latest electronics, computers, fluid exchange machines, and diagnostic tools.

Reward efficiency. Tie efficiency and productivity to the technicians’ pay plan.

Move fluids and oils to a centralized location.

Enhance digital communication to speed up the multi-point inspection information transfer between techs and advisors.

In short, minimize or eliminate any activity that takes the tech out of his service bay, away from the car. (When their hands aren’t on the car, they’re not making money and neither is the shop.)

Some of you may be thinking, “Hey, my techs aren’t that busy; they have the time.” If that’s true, then you have a different problem: the advisors aren’t selling enough time. Phillips explained that some shops are masters of processes, but lousy at selling. Therefore, it’s important to add a sales element and a sales incentive to the process.

Another best practice centers around creating a pay plan for advisors that encourages collaboration and teamwork, while still having a little friendly competition. How about this:

Pay advisors $5.00 for each hour they sell and $1.00 for each hour the shop does. Therefore, they make $6.00 for every hour they sell and $1.00 for every hour the other advisors sell.

 Additionally, pay a $5.00 spiff bonus for each maintenance service sold and a monthly bonus when CSI goals are met.

Nothing kills momentum and moral faster than techs running out of work by 3:00 p.m. because the advisors aren’t selling enough—or advisors that stop selling because they fear that the techs can’t get the work out fast enough. There’s often lots of finger pointing, grumbling, and complaining at the monthly service meeting, but the solution is simple; sell the service and efficiently get it done!

Years ago, Phillips used to hear dealers say, “My service department is losing money, but hey, F&I is profitable…so we’re okay!” That’s stinking thinking, because today every department must be profitable!

Phillips offered three tips for increasing fixed ops profitability:

• Increase your margin (make more gross)
• Decrease expenses
• Sell more maintenance services

Therefore, if your margin is good and if your expenses are under control, then your advisors need to sell more maintenance services. If your margins are low, raise them…and sell more maintenance services. If your expenses are high, lower them…and sell more maintenance services. No matter what other steps you take, it is critical that your advisors sell maintenance services. You can’t save your way to prosperity; you must sell your way to success.

Despite the complexities of the automotive business and the constant pressure from customers and OEMs, if you are selling maintenance services, your revenue will increase.

Happy Thanksgiving! I hope you have time to relax, reflect, count your blessings, and enjoy your family and friends!

Every year the number of higher mileage older vehicles increases. And every year dealership service departments lose more market share.

Vehicle owners almost always defect to the aftermarket as their vehicles get older and accumulate more miles. What’s worse is that many service managers, advisors, and technicians just shrug their shoulders and let them go. They accept this defection as a fact of life; “it’s always been this way and it always will be,” they think.

This negative thinking is so pervasive that it becomes a self-fulfilling prophecy. They expect the customers to take their service business elsewhere, and they do!

This has got to stop.

Unless you are crazy-busy all the time, you need to hold on to aging vehicles and reach out to those who have already forsaken you. It’s not like you’re being greedy…you just want it all!

The Opportunity

Look at this graphic: the opportunity is huge—and increasing every year.

Older Vehicles

The average vehicle on the road is 12.2 years old. That’s 20% older than a decade ago. Think about that; it means half of the cars on the road are over 12.2 years old. Older vehicles need more maintenance and repair.

„Higher Mileage

The average vehicle on the road has accumulated mileage of 120,500 miles—roughly 10,000 miles annually. That’s up slightly from 2013 when accumulated mileage was 115,000 miles. Higher-mileage vehicles need more maintenance and repair.

„ Vehicles in Operation

There are 24 million more cars on the road than there were 10 years ago—273 million vehicles. I’ve been tracking this number for almost four decades and it goes up every year. Lots and lots of older vehicles with higher mileage need lots and lots of maintenance and repair.

„ Domestic vs Import

In 2007, domestic vehicles made up 66.7% of all the vehicles on the road…today it has dropped to 54.4%. Conversely, import vehicles on the road have risen from 33.3% in 2007 to 45.6% today. In a few years, imports will have the largest share of the American fleet.

Okay, so what? There are a lot more domestic dealers than import dealers, so domestic service departments need to be ready. If you are a RAM dealership, realize that you might have a BMW sports car in the service bay next to a Cummins diesel pickup. The core maintenance services on these two vehicles are remarkably similar and don’t require special tools, fluids, or parts.

Action Points

Why not create a business within a business? I’m talking about a “garage” in your service department. This is really not a radical concept, because you probably installed a “jiffy lube” in your shop years ago.

Now it’s time to install a garage that works on all makes, all models, all years, all mileages…the higher the better. Just start with one or two techs. They don’t have to be OEM factory certified A-level techs (which are getting harder and harder to find). There is a bigger pool of competent, hard-working, B- and C-level techs that might jump at the chance to work in your shop.

You might want to consider a simplified maintenance menu and create a marketing piece inviting customers to bring their “other car” to your shop.

Ask the parts department to provide estimates that give vehicle owners an aftermarket option on replacement parts. They’ll likely retail for 30%-50% less and the profit margin might be greater. (I’m sure this idea will cause some of you heartburn; but remember I’m talking about older, higher-mileage cars). If they defect to an aftermarket shop, they won’t be using OEM parts. Obviously, your profit drops to zero when customers defect.

You can do this…at least give it a try. You sold them the car, it ought to be yours to service…for life!

Breaking News: You take more money to the bank grossing $0.70 per dollar than you do grossing $0.02½ per dollar!

According to the NADA DATA report released earlier this year, the average new car gross is 2 ½% and it’s been dropping every year for almost a decade. Service labor gross, on the other hand, has consistently been at 70% gross for as long as I can remember.

So, why do dealers and general managers work so hard chasing 2 ½% gross while largely ignoring 70% gross? I genuinely don’t understand. I’m serious; if you know the answer, please email me at This email address is being protected from spambots. You need JavaScript enabled to view it. and I’ll include it in a future article.

I want to be clear: I am not suggesting dealers diminish their efforts to sell new and used cars, nor am I downplaying the importance of variable ops. I’m just saying that, as an owner or general manager, if you would devote some of your time, talent, business savvy, sales experience, and leadership to fixed ops, the financial impact to your bank account would be remarkable.

Let’s look at the numbers to back this up:

NADA says the average car sells for $34,670, so at 2 ½%, that’s $867 gross profit. According to yourmechanic.com, Lang Marketing, and many other sources, consumers spend $9,000 during the first 10 years of ownership to maintain a car. If you figure a parts-to-labor ratio of 1:1, a labor gross of 70%, and parts gross of 35%, then that is $4,750 gross profit. That’s $475 gross per year. Granted, in the early years, a vehicle needs less maintenance than it does later in life. (Yourmechanic.com estimates the first year of maintenance to be $150 with each year increasing $150…hence the second year is $300, the third year $450, etc.)

The cynic would say, “Hold on, Charlie, by the time the vehicle owner starts spending serious money on maintenance, they have long ago defected to the aftermarket.”

This is unfortunately true in many dealerships, but that’s why retention is so important—even the OEMs see the long-term value of retention and include it as a key performance indicator in evaluating a dealership’s overall health (more on this topic in a future article).

Recapping the main point, the average new car sale produces a one-time gross profit of $867…once. The average service customer produces a recurring annual gross profit of $475…every year. (Note: The average age of vehicles is 12.1 years. Wow!)

The only way to capture that recurring service gross is to sell preventive maintenance. Here are some items for your next service sales meeting. (It will have even more impact if the dealer or general manager attends the meeting.) Consider the following sales training topics:

„ Eric Twiggs, a training coach at ATI, says one of the most important things in sales is attitude…not the attitude of the customer, rather the attitude of the advisor. For example, if the service advisor perceives that his customers all live hand-to-mouth and can barely afford basic necessities, then his attitude causes him to never offer tech-recommended services.

Twiggs says an advisor must realize that his perceptions are not always the customer’s reality.

In other words, teach advisors to set their perceptions aside and lay out all the technician-recommended service and repair. Don’t over-think this; just review the multi-point inspection form and the estimate with the customer and ask them to buy.

„ Twiggs goes on to warn about confirmation bias. This was a new term to me, but it means using a singular event to confirm what you already believe—even though the evidence doesn’t support your conclusion.

For example, if the advisor believes your services are over-priced and thinks, “Oh, brother, I’d never come here for service work,” then the first time a customer questions the price, it confirms his wrongly-held belief.

I have seen this happen to many advisors and they just shut down. Their thinking goes something like this: “Yep, I knew our prices were outrageous…nobody in their right mind would pay this kind of money.” The result is they become spineless order takers.

„ Don’t sell your own wallet. This happens daily on the service drive. An advisor knows his wallet is getting pretty thin, and it’s still four days until payday. Since he can’t afford $750 for an AC compressor, he assumes the customer can’t either. His perception is not the customer’s reality, but his attitude kills the deal and the sale is lost.

„ Zig Ziglar said it best, “Your attitude more than your aptitude determines your altitude!” Amen. Savvy managers help their advisors maintain the right attitude toward the dealership and toward the customers. Management must continually remind fixed ops personnel that selling preventive maintenance is a high calling and a noble mission.

These concepts are profound because of their simplicity. Fifteen-minute service sales meetings once a week will help your advisors maintain the right sales attitude. I know dealers spend a lot more time training their new and used car sales team—chasing a 2 ½% one-time gross. Surely 15 minutes a week is time well spent—chasing recurring 70% gross.

This got me to thinking about my wardrobe; who’s making the most money on my clothes, the menswear department at Macy’s or my local dry cleaners? My shirts are very traditional—long sleeve with button-down collars. I can usually catch the brand I like on sale for $50 per shirt. My dry cleaners charge $2.65 per shirt and I take them in about 20 times per year—that’s $53 annually.

To recap, the retailer makes $50 one time, but the dry cleaners make $53 recurring annually. Frankly, I don’t know how long I keep my shirts, but I bet it’s somewhere around three years.

Conclusion: There’s a lot more money to be made servicing cars (and dry cleaning shirts) than there is selling cars (and selling shirts)! Car dealerships do both. (When I say both, I’m referring to sales and service—however, if you want to add dry cleaning, I’ll take medium starch in my shirts!)

Earlier this year I ran across a book by Max Zanan called “Perfect Dealership.” It is a must-read for all of your dealership management and leadership team leaders. Seldom do I quote so extensively from another writer, but Zanan’s observations are so spot-on that I felt I had to let you hear directly from him.

The book takes an in-depth look at all departments in the dealership, yet Zanan reminds us the wisdom of becoming masters of the basics. What follows are selected insights from the chapter on parts and service, used by permission:

Sales-to-Service Introduction

All departments in the dealership must work toward a common goal. A lot of times I see that there is a total disconnect between the service and sales departments. There should be regular meetings between the general sales manager and the service manager to coordinate the transition of customers from sales to service and back to sales. In other words, never let go of the customer. It is in everybody’s interest to ensure customer retention.

The sales department absolutely must introduce every customer to the service department — and I am not talking about a nominal 30-second walk-around. This must be an active introduction to make the customer feel comfortable and know where to go when the first oil change is due. It is a good idea to introduce service advisors and the service manager.

New-Car Clinics

Dealerships must schedule new-car clinics on a regular basis (monthly or quarterly). These new-car clinics need to be promoted in the showroom and on the dealer’s website. They should take place at night, so customers can visit after work. Snacks and soft drinks should be provided. Technicians should teach customers how to use basic controls and answer questions. Again, these clinics serve a dual purpose: helping customers learn how to use their new car and also gain familiarity and feel comfortable with the service department.

Brag on Techs and OEM Parts

It is a good idea to display your technicians’ certificates and relevant information in the customer waiting area, so customers know that factory-trained technicians using OEM parts are working on their cars. Factory training and OEM parts are the reasons to use the service department instead of an independent mechanic. Furthermore, OEM parts and OEM-trained mechanics are the only reason to charge higher prices compared to independents.

The Service Sales Department

Every time I visit a service department, I have a feeling that service advisors are the opposite of the salespeople. You cannot assume you will make a sale, but it seems to be the mindset with many service writers that cars inevitably break—so they have a passive strategy.

Another problem that contributes to the lack of sales in service departments is understaffing. I am a big believer that an effective service advisor needs to spend time with each customer in order to get to know him or her and the car so he or she can upsell the necessary work. In order to do that, the service advisor needs to see no more than 12 to 15 customers per day. If your service advisors are seeing more than 15 customers per day, what you have is order-takers. And order-takers do not make money!

Service managers must have regular sales meetings to outline their goals and methods for accomplishing them.

Service Advisor Walk-Around

It is critical to make a positive first impression and build a long-lasting relationship with every customer. One specific way to do so is to conduct a walk-around when the customer comes in for scheduled maintenance or repairs. During an active walk-around, a service writer inspects the car with the owner, which can dramatically increase the chances of up-selling additional maintenance or repair work. An active walk-around is essential when you consider that parts and service is an extremely profitable business for dealerships. The profit margin on labor is about 75%, and on parts it is between 40 and 50%. A Perfect Dealership trains its service advisors to perform an active walk-around at all times, so it becomes a natural part of their daily routine.

Multipoint Vehicle Inspection

Multipoint vehicle inspection (MVPI) must be utilized on every single car, and maintenance and repair recommendations must be made on this MPVI.

Menu selling should be utilized with every customer, similar to what we do in the F&I department. This approach ensures 100% presentation of proposed maintenance and repairs to 100% of customers, 100% of the time.

Wear a Uniform

The Perfect Dealership transmits professionalism at every level. We need to make sure that service advisors, porters, and even cashiers wear a uniform. First, a uniform identifies employees and showcases professionalism that many dealerships lack. It goes without saying that uniforms must be clean, and name tags should be worn by all employees.

Training

The Perfect Dealership trains its staff on a regular basis. Service technicians must be up-to-date with factory training. Service writers need sales training and phone-skills training. And every employee in the service department needs customer-service training. 

Quick Lube Operations

Perfect Dealerships offer quick lube service without an appointment in order to compete with independents. Unfortunately, many dealers are not maximizing sales opportunities in their quick lube and express service operations. A lot of dealers are caught up with an idea that if they change the oil in 15 minutes or less, they are doing a great job. The point is not to rush through the process but to maximize the revenue by up-selling items such as air filters, wiper blades, light bulbs, belts, and cabin filters. To ensure maximum up-sell opportunity, an A-skilled tech should oversee the work of lube technicians.

Good stuff, isn’t it? I know what you’re thinking, “Hey, I already know all this stuff—I’ve heard it before!” Okay, you know it. The question is, are you doing it?

If you follow Zanan’s recommendations, not only will you have a perfect dealership, but a profitable one, too!

This article is for leaders—dealers, general managers, and service managers—the men and women who have been given a sacred trust to shepherd their employees and the dealership to success.

Once you, as a leader, have embraced the message, then I think it would be a good idea to pass this article on to your employees.

Shakespeare wrote in “Hamlet” Act III Scene I “To be or not to be.” A motivational speaker and personal trainer that I know says, “What you be, they are becoming.” One of my favorite authors says it like this, “Your employees pay more attention to what you do than what you say.” Behavior is caught, not taught.

The Draconian parenting philosophy of “Do what I say not what I do” has never worked and it never will. Yet I see this happening every day in the business world; managers have one set of standards for their employees and a different set of standards for themselves. (Good heavens, I’m starting to sound like Dave Anderson!)

So, are you a student, a disciple, or a disciple-maker? Let’s start by defining each:

Student: A learner (a person who is trained but never produces)

Disciple: A learner and a doer (a person who applies what they have learned; result: increased revenue via addition.)

Disciple-Maker: A learner, a doer, a believer, and a teacher (a person who is held accountable by their superiors to continue applying what they have learned; result: increased revenue and exponential growth via multiplication.

Rather obviously, the goal of every owner and manager ought to be to become a disciple-maker—and to have teammates that share the passion. What you be, they are becoming. It starts at the top. Let’s look at some examples that better explain each category:

Student example: Management sends a service advisor to a sales training seminar. However, the manager does not attend. When the service advisor returns from the training, he immediately goes back to doing what he has always done. He never applies anything he has learned. The manager doesn’t know what the advisor learned, therefore he does not have the ability to hold the advisor accountable. Nothing changes. It was a total waste of time and money. Unfortunately, this is the pattern that happens most often in the automotive business. Management is under the mistaken belief that the key to success is having trained service advisors. It’s not. The key to success is having trained service advisors who are held accountable to sell maintenance service—who are held accountable to apply what they have learned.

Disciple example: In this scenario, again, the manager does not attend the training. However, the service advisor has enough drive, energy, and desire that he does apply what he has learned. However, after a few days or weeks, because there was no accountability and the manager doesn’t really know or understand what he’s doing or why it doesn’t take long for him to return to his old ways.  And even though he applied it for a short time, it didn’t become part of his DNA.

This is so tragic because the advisor is all fired up—ready, willing, and able to produce—yet due to a lack of support from the manager, everything fades away. This is one reason there is such a high turnover in the automotive industry. Weak managers who don’t believe in training now have a self-fulfilling prophecy: “See, I told you so. All this training gets us nowhere; it’s a waste of time and money.”

Disciple-Maker example: The manager and the advisor attend the training together. The general manager and the dealer go, also! It sends a message that training is important; that training matters. There’s going to be accountability to a standard. It’s a new day. Things are going to change. There’s a new sheriff in town. Now when the advisor returns from the training, management all the way up to ownership knows what is required of the advisor to succeed. Therefore, everyone is held accountable up and down the management chain. What’s the net result?

The sales training works because the advisors are held accountable. They now have become disciple-makers who teach and train customers, who themselves become disciple-makers with their friends and family. In other words, the service advisor’s sales presentation is so clear that not only do the customers buy the maintenance services, they “buy-in” to the concept that preventive maintenance saves them money. This is true success. This is what you’re looking for, isn’t it?

So managers, ask yourself, “Am I a student?” (Which doesn’t make me or the dealership any money), “Am I a Disciple?” (Which will add a little bit to the bottom line, but not much), or “Am I a disciple-maker?” (A game-changer, a guy who is out there getting it done and holding my people accountable to get it done.)

Excuses: These are some of the most common excuses for not becoming a disciple-maker:

1. Can’t afford the time “I’m too busy. We’re short-handed.”

Let’s take a reality check for just a minute. I understand the fact that a dealer can’t attend every training event for every department every time. And I understand that a service manager can’t attend every OEM technical training class that he sends his technicians to or every sales training class his advisors attend. But the more engaged you, as a leader, are in understanding what your people are learning, the more effective you’ll be at holding them accountable to do it.

At the very least attend one training event a month with them. Additionally, you could commit to being present at the beginning of most meetings held at your dealership, simply to welcome everyone, thank them for being on your team, and to let them know you support the processes and techniques they are learning.

2. Can’t afford the money “I hate to invest in people that I don’t think will be around very long. We have a high turn-over rate with our advisors and managers and we just don’t want to invest in them.”

It has been said that it is far better to train people and have them leave than it is to not train them and have them stay! If you invest in the training and hold them accountable to implement what they’ve learned, then your team will increase their production and give you a great return on investment.

3. Too lazy to do it; unmotivated “Quite frankly, I just don’t care.”

(Obviously, nobody is going to say this out loud but this is the attitude that many in management have.) Their thinking goes something like this: “I’m just not that passionate about it. I’m making an average salary, I have average personnel, we have an average dealership, things are going along pretty good. I just don’t want to put out the effort to get to that next level.” In other words, what you’re doing is “good enough” and you don’t want to invest the time, money, energy and effort to be great. By the way, you know the old saying, “the enemy of great is good.”

It’s easy to get worn out in the automotive service business. Long hours, customer expectations and demands, computer issues, technicians—it can suck the life out of the most optimistic among us.

That’s why we all need to be energized with fresh ideas. Just a reminder that I’m writing to managers and leaders—you are the folks that need refreshing the most. Attending training seminars with your service team will refresh you. If nothing else, do it for yourself.

In summary, if you’re looking for maximum return on the time and money you invest in having your people trained, this is the way to get it. Disciple-makers make disciples that go on to make disciples. This is contagious multiplication. What you be, they are becoming! “Go ye therefore and make disciples.”

Happy New Year! I hope you enjoyed a relaxing time with family and friends over Christmas and had a few days to recharge your batteries. Service directors will need to be at the top of their game in 2018 because dealers will be depending on fixed ops more than ever to keep the dealership profitable.

The prognosticators are saying there will be one million fewer cars sold in 2018, so parts and service will be called on to pick up the slack. (Savvy dealers already know that fixed ops is the backbone of profitability, but there’s nothing like declining new car sales projections to cause everyone to get religion about the cash cow we call the service department.)

There are two critical opportunities you must introduce new and used car buyers to your service department: The first, of course, happens at the time of vehicle delivery when the salesman brings the buyer out on the service lane to meet the service advisor. The second occurs at the new and used car buyers’ clinic.

The following is a true story that happened last summer. Dewey and I have been friends for over 30 years, so he knows what I do for a living and he sent me a lengthy email explaining his experience. Everything in italics is in Dewey’s own words.

My wife and I were looking for a good, used, larger vehicle to better meet the needs of our family. However, due to some incredible incentives, we decided to purchase a new vehicle instead. The overall buying experience was very good and very pleasant! Our salesman was just super and the whole experience from his greeting to the test drive to meeting the new car manager to the finance presentation was well done.

A few days later, we got a letter congratulating us on our purchase followed by an email and call inviting us to their customer appreciation event for new car buyers. My wife and I accepted the invitation.

There were about 50 people there, some with families, but at least 35 of us were “new car buyers.” They had barbecue set out and lots of tables set up on the show room floor. After checking in, the first person I met from the dealership was a man that was very busy setting up and serving drinks and very hastily moving around. I said, “Hi, is Vinny, my salesman, going to be here tonight?” I got a very quick and disconnected response of, “I don’t know anybody by that name, nor do I know any of the salesmen.” Wow, that was not a good first impression at all and actually, it was rude. He had an employee shirt on, but there was not a greeting of “Hello, I’m glad you’re here!” And then to not know any of the salesmen! I seriously thought he was a low-level employee that got the job of setting this all up.

When the meeting started, to my surprise, the rude guy turned out to be the SERVICE DIRECTOR! He ran the entire meeting. I was not impressed and already thinking, “this is not the way to retain new customers.”

He handed out an agenda for the meeting…one he said would only last about 30 minutes. What a joke! He basically just read the agenda. My impression was that he did not want to be there or doing the meeting. The agenda said we would meet several employees, but as it turned out, just one service advisor showed up at the end and there were no parts people, not a single salesman, no techs, and no upper management. He did mention that the general sales manager was there, but he was way too busy to come out and say hi. The service director pointed at him in his office and he didn’t even look up, he just waved. Are you kidding me?

The service director went on to brag about how great they were: number one in sales and service, service experience award winner, fixed right first award winner, how large they are (average 100 cars a day) …yet no other employee, other than the one late-arriving service advisor, was present to say thank you or be up front.

The service director also bragged about their waiting area and the fact that they had 96 different flavors of coffee in their machine for their guests. Yep, that’s why I bought my van there and would want to have it serviced there! (Sarcasm).

The service director briefly discussed oil changes, and I was really surprised when he downplayed the importance of the “oil change due” reminder. The only maintenance he discussed was an oil change and his attitude was like it was no big deal.

Thankfully the meeting ended and it was time to hand out the door prizes! One person had a question about their home link garage system not working and that led to another 30 minutes of questions and now the service director was getting impatient. Clearly, he did not want to be there and finally said, “I will take more questions individually, let’s do the door prizes and get you all out of here!” By this time, I knew I would NEVER be bringing my van here for service! If I have warranty issues I’ll go somewhere else for service and probably to a very good independent shop to have oil changes and routine maintenance performed.

I left without saying anything. I love my new van, but I will never bring it to him for service. I’m confident that I will find a much more appreciative and thankful shop or dealership who truly wants to have me as their customer for life.

Wow! What an ugly story. Talk about a textbook example of how to chase customers away!

Let’s unpack this just a little bit. The attendees at the meeting had purchased 35 new cars, so that means they had spent almost $1 million. At 5% the dealership grossed roughly $50,000 on these 35 cars.

The average vehicle owner spends about $600 annually for maintenance, so for 35 vehicles over a 10-year period, that’s over $200,000 revenue and $120,000 gross for fixed ops. That’s how much these customers will spend somewhere…but, if they respond like Dewey, it likely won’t be at this dealership! No wonder dealerships only get about 14% of the annual customer-pay maintenance and repair revenue. AND just think how many future new and used car sales will be lost due to a lack of loyalty to the dealership.

So, if other attendees felt like Dewey, then here’s 35 precious people that were royally turned off by an unfriendly, impatient service director and a team of managers that couldn’t be bothered to show up and say thank you.

The leadership of this dealership needs to remember that you sell cars to make customers so you can sell maintenance services to make money! They apparently believe that once they’ve sold someone a car that they’re done. What a costly mistake.

Here are some action points: 

• Teach your sales, service, and management team how to do a new car clinic that keeps the customers loyal to the dealership!
• Teach them to make the customer feel welcome and appreciated. The employees who host the customer appreciation clinic need to be the epitome of graciousness, warmth, and hospitality.
• Teach your management team that they must be present, engaged, and have their game face on. (No waving from the office without looking up. Wow, how unprofessional and utterly clueless.)

In closing, you might want to consider creating an incentive for the sales person who has the highest sales-to-attendance percentage. This will encourage them to phone, text, and send email reminders encouraging their customers to attend. Double the incentive if the sales person shows up also.

The new car buyers’ clinic matters. It’s a big deal. It will get your customers started out on the right path to many years of driving pleasure. It keeps them loyal to the dealership and it makes you lots of money.

Happy sales to you.