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.

‘Tis the season to be of good cheer, and fixed ops departments have much to celebrate. The future for dealership parts and service departments is very bright. In fact, there has never been a better time in history to be in fixed ops than right now—and I’ll prove it to you.

Vehicles in Operation Increasing

There are more vehicles on the road today in the U.S. (over 273.7 million) than ever before in history. Compare that to 202 million vehicles in 2001; that’s growth of 71 million vehicles. Every year we manufacture more cars than we scrap, so the vehicle population continues to rise with no end in sight.

Service Centers Declining 

Today there are 225,000 service centers in the U.S. compared with 245,000 in 2001. That’s 20,000 fewer places to have cars and trucks serviced, repaired, and maintained. Sadly, about 4,000 of those shuttered service centers were dealerships. (From 21,900 in 2001 to 17,800 today.) So let’s put these two statistics together: 71 million more cars and 20,000 fewer places to have them serviced. Wow, what an opportunity. The “supply” of service centers is dropping and the “demand” of cars on the road is increasing; therefore, your service department has greater value today than it has ever had.

More Money Spent

Last year U.S. consumers spent $252 billion on customer-pay maintenance and repair. That’s up from $199 billion in 2006—a $53 billion increase in 12 years. We are in a growth industry. Okay, let this sink in; $53 million more is being spent at 20,000 fewer service centers. Wow. Did I mention the future is bright?

Dealership Getting Bigger Share

Of the $252 billion spent on vehicle maintenance, only $37.4 million was spent at dealerships. The sobering news is that number represents only 15% of the total. (100% of all cars were purchased at dealerships, yet only 15% of service dollars were spent at dealerships.) The good news is that dealers gained market share (from 14% to 15%) in the past year, which represented several billion dollars in growth.

As a sidebar, the $37.4 billion dealers collected from customer-pay maintenance and repair represented $20 billion in labor and $17.4 billion in parts. That means the parts-to-labor ratio was .87:1, which is a very, very good number and shows dealerships are starting to grasp the importance of performing preventive maintenance service.

Unperformed Maintenance Dropping 

Speaking of preventive maintenance, here is the most promising statistic from last year: unperformed maintenance dropped from $73 billion to $55 billion; that’s the lowest it’s been in over a decade. Obviously, the less unperformed maintenance, the less service money that was left on the table. The only way to recapture unperformed maintenance dollars is to perform more preventive maintenance services—and the only way to do that is by asking the customer to purchase needed, tech-recommended maintenance.

Seeing unperformed maintenance services on the decline indicates that service managers and advisors are starting to get it and it is paying off.

Time out. I’ve given you five indicators of great growth opportunities in the automotive industry. So, how is your service department doing? Are you experiencing the prosperity and growth in your shop? Is your personal income going up? Are you crazy busy all the time?

Or are your techs running out of work at 3:00 p.m.? Is your shop efficiency under 100%? Are your hours per CPRO under 2.0 hours? Are you saying, “what prosperity?”

If so, help is on the way. In 2019 I’ll be writing a series of articles centered around creating a sales culture in the service department. You can’t save your way to prosperity, you must sell your way to prosperity. The only way to grab your share of the $252 billion preventive maintenance pie is to ask for it. In 2019, I’ll show you how.

Statistics Sources:
AASA Status Report, NADA DATA, Lang Marketing Annual Report, and Auto Care Association Fact Book

The greatest challenge in the automotive industry today is finding leaders who will lead, managers who will manage, and directors who will provide direction. The centerpiece of effective leadership, management, and direction is accountability:

1. Personal Accountability—holding yourself accountable for the desired outcome
2. Top Down Accountability—holding others accountable to perform implemented processes

Service departments are famous for implementing processes and not holding employees accountable to consistently perform the task. For example:

• Advisors must do a walk-around on every vehicle that enters the service drive…with the owner present. They don’t, and there are no consequences.
• Every technician must do a comprehensive inspection on each vehicle. They don’t, and no one follows up to see why not.
• Advisors are required to follow up on declined work by calling the customers within 48 hours. They don’t, and management seems to have forgotten all about it.

Accountability isn’t a four-letter word. Dave Anderson says accountability is not something you do to somebody, it’s something you do for somebody. It’s management saying, “I care enough about you to hold you accountable. I care more about your future than your feelings. I’m hard on you because I know you can do it…and I believe in you.”

There is a common belief among service managers that techs and advisors don’t want to be held accountable. They have bought into a lie that says accountability is punitive—punishment, big brother, micro-managing—or something distasteful to employees. In fact, the opposite is true.

A few years ago I was consulting with a group of seven dealerships, and to say they were a dysfunctional family would be an understatement. There was drama and strife everywhere, and their business was in decline. I brought the techs and advisors together (without any managers) and simply asked them what was up. They listed a few minor issues and personality conflicts, but their main issue was lack of accountability. I was floored. This group of educated, professional adults wanted management to “inspect what they expected.”

Their frustration was centered around the fact that management demanded processes be followed, then didn’t correct, coach, mentor, and lead when employees didn’t follow the process. The message from management was “do it or else;” yet nothing happened to those who didn’t perform. The techs and advisors quickly learned that management didn’t really care and, therefore, they didn’t, either.

Quoting Dave Anderson again, “you will lose the respect of the best if you don’t deal with the worst!” Anderson goes on to say that leaders shouldn’t desire “to be liked” –their goal should center around “being respected.”

If you are respected, people will follow you—and ultimately like you. The leaders of the above dealer group lost all credibility because they failed to hold their team accountable. The net result was not just internal drama; it affected hours per RO, maintenance service sales, CSI, retention, and fixed ops profitability. All that could have been avoided by simply holding team members accountable. Surely, it can’t be that simple. Yes, it’s that simple.

The dealer saw what was happening and hired a new fixed ops director. Within 90 days things started to change, and six months later several of the service departments had record months. He didn’t come in and fire everyone, although some managers couldn’t be salvaged. He just laid out the expectation, provided clarity on how to meet his expectations, and did weekly follow-up (accountability) to make sure his processes were being followed.

His monthly service sales meetings are exciting, attitudes have improved, and everyone’s income has gone up! It’s a beautiful thing.

The primary reason the new fixed ops director made such a difference and turned seven dealerships around is because he practiced personal accountability. That means when he accepted the responsibility of being fixed ops director, he became accountable for the outcome.

Accepting responsibility for a task is meaningless and won’t produce any results if you don’t hold yourself personally accountable for the outcome.

Jeff Peevy, President of Automotive Management Institute, has written extensively about this topic. Peevy says:

• Personal accountability doesn’t require heavy supervision
• Personal accountability creates a thirst for knowledge
• Personal accountability pursues quality

It starts at the top. If the leader doesn’t accept personal accountability, then respect will be lost and the leader’s authority will evaporate…and you can forget about your team members ever practicing personal accountability.

Top down accountability—accountability to the manager—is important, but when your team members accept personal accountability, then you, as a leader, have hit the sweet spot. Your personal accountability has now replicated itself and now your team members have it in the fiber of their DNA.

So, what’s at stake?

The National Automobile Dealers Association put out a fascinating statistic that I had never seen before. According to NADA, 49% of total dealer gross came from fixed ops in 2017. That’s up from 45% in 2015. Of course, I’m sure you already know that most of the dealership’s net income comes from fixed ops gross.

The point is simply this: accountability increases revenue sales, gross profit, and net profit. There is a high price to pay for ignoring the impact of accountability throughout your dealership…and a huge reward for training your team to master the art of accountability!