Attention Dealership Service Departments
Ducking responsibility is widespread in dealership service departments, but ending this bad habit is critical to success. In my work, I constantly observe a “What can you do for me?” attitude, and it is not just generational. I encounter leaders who place the responsibility for success solely upon their staff s, with a “You owe me” attitude. I see employees who feel their leaders and business owners owe them; after all, “I show up on time every day and work my shift. Don’t you owe me a promotion, a better opportunity, a raise?”
This wrongheaded thinking and warped perspectives have contributed to a state of mediocrity, and in no other area is it more evident than in the service side of the automotive business. Closing ratios and up-sell penetration have been stagnating for more than a decade. Undeterred, we keep waiting for the other guy – the dealer, the managers or the other employees – to deliver.
We struggle with the “quick services” in which so many businesses have invested. They deliver losses that would drive dealership service departments out of business were they an independent repair shop or a chain like Jiffy Lube. But still, we wait.
We struggle with customer retention, but rather than generate fresh ideas we slap a fresh face on the same level of service, hoping for different results. We deceive ourselves with false justifications: “The dealer will figure it out; my manager will figure it out; if I pay my employees enough, then they can figure it out.” Simple solutions that take good old-fashioned elbow grease to execute are ignored in the meantime.
Enough is enough. It is time for dealerships to stop talking, hoping and blaming. It is time for everyone on his or her staff to step up and take responsibility not only to succeed but, more importantly, to exceed. Here are some ways I believe it can be done:
STEP 1: Stop waiting and blaming. Dealers and managers, pay close attention here. Every time I meet with service advisors and their support staff s, I try to drive home the following message: Your leaders did their job. They secured the land, built the building and stocked it with many millions of dollars of inventory. They then hired a sales staff, trained that staff to close deals and monitored their successes. They set up an F&I department and trained the staff to sell accessories and extended warranties that would tie the customer to the service department. They hired a service manager who developed a plan to get customers in the door, and the customers came. Your leaders did their job.
Where I see dealership leaders fail, and continue to fail, is by stopping a few thousand dollars short and not training their service staff s to succeed. They somehow believe the service groups either will figure things out for themselves or they take the easy road by picking the most popular training class in the marketplace.
In doing that, they fail their businesses, their staff s and themselves. They let a few thousand dollars and simple accountability deny success that is right in front of them. If they want staff s to succeed, the most important tool they can provide is training in how to handle customers.
STEP 2: Stop waiting and blaming. Service advisors and support staff, pay close attention here. Your dealer, managers and leaders may owe you the tools you need to be successful, but you owe them your loyalty and dedication to use those tools to the fullest. First, let’s look at the immediate areas you need to focus on: Survey scores, customer retention, effective labor rate, customer paid repair order averages and total dollars sold. Do you know what the national, regional and district averages are for the brand you represent? How do you stack up – above or below average, and how much? Do you know what metrics the top 10 percent are turning in, and what they do to reach and maintain that level?
You can go online and have answers to all of these questions within minutes. You then can create solutions to put you within the top 10 percent, again within minutes. It is up to you to seek out this information and create solutions. Your dealer, managers and leaders have put you in a position to make an income that will put you firmly in the top 25 percent to 30% of earners in the country, an income that will deliver a lifestyle that many will envy. To squander that opportunity is lazy, ungrateful and selfish. If you don’t want to work at being the best, then step aside and make room for those who do.
STEP 3: Stop doing things that don’t work. Three tendencies that hold back many service departments are: 1) They have no training program – initial, ongoing or other – that clearly defines expectations; 2) They look to the wrong people (factory training and product vendors) for advice; and 3) They let their managers run the shop as they see fit, with little or no guidance from above.
You must train, get advice from those who truly know, and lead your managers. They need your leadership and to be pushed and pointed in the right direction. Even if they push back, you need to assert your knowledge and get what you pay for.
STEP 4: Do not fear turnover. Embrace it. If you have employees that who cannot or will not produce, then cut them from the team. If you have employees who fight you at every turn when you try to implement change, then let them go. Let’s assume one of your service advisors is the problem. Which is worse – temporarily taking in fewer vehicles for a few weeks until you find the right person, or keeping the wrong person, letting him handle 15 customers a day in a sub-par manner, wrecking any chance you have to meet targeted numbers and, worst, costing you customers?
If you have four service advisors on your drive and one has a 2.5 customer paid repair order average, one has 2.3, one has 2.2 and one has 1.5, what do we know about your drive? It will do 2.5. We also know that whenever the advisor who carries the 1.5 average talks to a customer, it costs 1.0 – that is, 1.0 times 15 customers per day, times 5 days a week, times four weeks a month. That is 300 hours a month, 3m600 hours a year this advisor costs you, not to mention the hit to your survey scores and retention.
STEP 5: Embrace accountability. Failing at this step keeps more service departments from achieving peak performance than any other. Everything in service starts with the simple retail transaction of an oil change; everything above an oil change is an up-sell. Either you can get the up-sell or you cannot. Either you can wow the customer enough to get a great survey score, or you cannot.
Accountability will be part of the winning formula. In achieving the trifecta of high sales, retention and survey scores, you need a manager who clearly understands both the art of selling and customer service. You need to show this manager what you want to achieve and how you plan to achieve it, and hold him accountable to those processes and results. He in turn should hold each of his employees accountable.