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Laura Madison

3 Ways Managers Can Drive Traffic

Customer buying a car at dealership

In today’s automotive industry, what a manager does when there are no customers in the showroom is every bit as important as when there’s a showroom full of customers. Most managers are great at desking and good closers, but the most critical role of a manager in today’s business environment is managing activity. By managing activity, I mean working with the salespeople on a daily basis to make sure they are doing the most productive thing they could be doing at any given time to drive traffic.

Here are three things management teams can do to manage activity and get more people touching tile at the dealership today:

Evaluate the service-to-sales opportunity

How many fresh ups are you going to get today? Now, how many customer-pay repair orders (ROs) will service write today? When I ask managers that question, the answer is always exponentially more on the drive. There are often more customer-pay ROs by a factor of 7 or 8! Clearly, there’s more activity coming in the back than coming in the front. If your salespeople are focused on the front door, they’re missing what’s happening in service. Back in service, there are customers rolling in all day long who, if you presented them the right opportunity the right way at the right time, would trade out of their vehicles. That’s where all the action is and that is a huge volume opportunity, not to mention some of the best grossing deals you’ll have all month since these customers haven’t shopped 20 of your closest competitors.

To give you an idea of how big an opportunity this is, take a look at a dealership we work with who kills it. They are one of the top 15 dealerships in the country for their make, selling an average of 500 total cars per month and 100-150 of those are out of their service department. Think about that for a minute.

Converting customers from service to sales isn’t hard, but there has to be a process in place for salespeople who are properly trained and have the right mentality.

Maximize referrals

What types of processes has your management team put in place for generating referrals? The old, “Hey, if you know anyone, send them my way,” as your salesperson hands a stack of business cards to a recently sold customer has never been effective.

The best dealerships have simple, trackable steps to generate referrals during the sales process, like at the time of delivery. Trained salespeople know how to ask for referrals in a compelling way that actually generates names and contact information; they command the tools to then call up referees and motivate them to come into the dealership. And since referrals tend to close at a higher percentage, ensuring you have the right processes in place to generate them can make a huge difference in sales.

Rethink the spiff plan

You need to create a spiff plan that gets your salespeople doing what you want, instead of what they were going to do anyway. Reward behavior like driving traffic out of sold customer bases or generating referrals, and you’ll see more customers on your showroom floor. In our Management by Fire events, we talk about different, trackable ways to spiff for behavior just like this and getting your salespeople to work the pay plan in a way that benefits you and the dealership.

Managers are the foundation of dealership productivity. Make sure you put your salespeople in the best position to succeed by equipping them with the knowledge and tools they need to be successful.

If you want to be a great manager, do what so many others have done and get to Management By Fire. It’s 2 ½ days of nothing but processes that are going to help you fill up your showroom with customers better, faster, and smarter. For more information, contact us directly at 480-659-4035 or visit ManagementByFire.com.

Permanent link to this article: http://blog.ncm20.com/2017/09/3-ways-managers-can-drive-traffic/

Brandiss Drummer

General Managers Are Neglecting Over 65% of Their Business!

Mechanic man holding clipboard and check the car

In August of last year, I was promoted to Director of Education at NCM. For the most part, I felt I was ready for the challenge. Over the previous six years, I had proven myself in almost every facet of the Institute, working in areas such as client services, sales and marketing, content development, and operations management. Because of these experiences, I felt confident to lead my team to success, as I had walked a mile (at least!) in their shoes and knew the opportunities and challenges of their respective areas of the business intimately. Despite this confidence, however, there was still something weighing on me. Regardless of my level of expertise in the business and administrative aspects of the Institute, there was still a fundamental group of people whose function I had minimal experience with – the instructors. While versed in educational principles, I have never actually stood up and taught a class a day in my life – how was I to effectively manage and lead a group of people on something that I had never done?

This is not uncommon in the business world. As people begin to climb the corporate ladder, there comes a point in which they will lead a team or area of which they have limited knowledge. Think about the COO of a company – he or she is ultimately responsible for all aspects of the business, including things like IT, marketing, accounting – and yet, we know that many of them do not have a background in these various departments. It is no different in the automotive world – many general managers have been promoted through the sales side of the business and must now learn to oversee all other departments in the dealership.

Fixed operations departments often cause the most discomfort for the sales-experienced general manager. Conversely, fixed ops are some of the most critical areas of the dealership, generating over 65% of departmental profit for our Benchmark dealers. (In fact, many dealerships rely on fixed operations departments to generate enough gross profit to cover their fixed expenses, minimizing their dependency on selling cars to open their doors each day.) What’s more, according to NCM Benchmark data, while each salesperson will generate $32,000 in gross profit in an average month, your service advisor will generate closer to $42,000. Couple that with the fact that, on average, fixed ops departments will interact with five times the number of customers than your sales department, you’ve got yourself a solid case for a general manager’s involvement in a fixed operations strategy. Based on these numbers, wouldn’t you dedicate a substantial amount of time, training, and resources to these departments?

Despite the business case, it can be easier said than done to take charge of these areas of the business. It is human nature to avoid things we know little about, for fear of looking incompetent, being challenged by someone who has greater experience than we do, or not having the respect of the people we need to lead. However, this dilemma is no different in the automotive industry than it was for me in my new role or the many leaders in other industries who face similar challenges in leading new teams. Here are a few simple tips:

  • Focus on commonalities – Often, we get too caught up in focusing on the differences in departments. Instead, highlight the areas that are similar to where your experience lies. This will help ease the “fear of the unknown” department. For instance, my sales experience in working with the clients was very similar to what the instructors did every day: it’s all about selling ideas and establishing credibility and rapport. Similarly, the sales and fixed ops departments have many things in common:
    • Both departments are dependent upon measuring and managing the different opportunities to do business.
    • A disciplined “Road to the Sale” is a requirement in each department.
    • Employee productivity, total department gross, and total department net profit are key performance indicators.
    • Accountability management is paramount to success.
  • Ask questions – Being a good leader is not about knowing all the answers; it’s about asking the right questions. Your employees know that you may not be an expert in their department, but you will earn their respect if you take the time to better understand them and their roles. In my role, I set up one-on-ones with each NCMi instructor to ask them questions about their challenges. Here is a sample of some questions you may wish to ask your fixed operations department managers:
    • How are we managing productivity?
    • What are the total shop hours flagged for the week?
    • What is the shop proficiency? (flagged hours divided by available hours)
    • What is the unapplied labor time?
    • How are we managing assets?
    • What are the outstanding receivables?
    • What is the parts obsolescence?
    • What are the gross and true turns of our parts inventory?
    • What is our parts reconciliation variance?
    • How are we managing sales and margin?
    • What is our effective labor rate?
    • What is our gross and net profit against forecast?
    • How are we managing customer satisfaction? (CSI score)

Not sure what the numbers should be? Utilize the NCM Profit Trend Analysis or composite report.

  • Spend time in the department – Nothing can replace immersing yourself in a department. For me, this was spending more time in the classroom with the instructors so I could see their experience first-hand. For our general managers in the General Management Executive Program (GMEP), we recommend that they spend at least 30 minutes per day in their fixed operations departments. The more exposure you have, the more comfortable you will become, and the more comfortable your team will be to bring up ideas and/or critical concerns.
  • Rely on your leaders to bridge the gap – It is not your job to know the ins and outs of every department; that’s why you have a department manager or lead. However, if you hire and retain a strong person in this position, you can lean on them to bridge the gap between your business goals and the expertise of how the department operates. Develop a mutually beneficial relationship with this key person. He or she can educate you on things you need to know within the department, and you can educate him or her on the overall vision and goals for the dealership. Again, the better the relationship, the more comfortable you will both feel to ask questions and give feedback, and the better understanding you can gain of the department. This could be through daily, informal conversations with key personnel on the team, as it was for my situation.
  • Educate yourself – Take advantage of publications and seminars that help get you up to speed. In my case, this was utilizing the resources at the Association for Talent Development on best training techniques. For general managers, NCM has specifically developed a course to address this topic, “A General Manager’s Guide to Service and Parts.” There are also many other resources available to you, including AskNCM, NCM 20 Groups, NCM’s Up to Speed Blog, and various other industry blogs and newspapers.

Permanent link to this article: http://blog.ncm20.com/2017/09/general-managers-are-neglecting-over-65-of-their-business/

Kevin Cunningham

What You’re Missing Could be Right in Front of You …

Group of smiling business team standing together

After more than 20 years of working for NCM as a performance partner, one of the most compelling activities I’ve witnessed NCM 20 Group members is the onsite review. The benefits are vast and, as I write this, I am seeing the impact of one of our most comprehensive reviews right now. A 20 Group comprised of more than 30 general managers and key departmental managers descended upon Richmond Ford Lincoln in Richmond, Va., to perform an onsite review for member Mike Serpico, the dealership’s general manager. I think you’ll quickly see how beneficial this can be …

An NCM 20 Group onsite review provides an eye-opening opportunity for a dealer to find out how a management team perceives their roles within the dealership. The review also allows a dealer or general manager a chance to truly understand their management teams’ ideas for the future.

“You’ve told us this before; you’ve coached us on this before,” is what managers told Mike following their review in Richmond. When his department and key managers heard the same information from a peer, it was suddenly validated and “miraculously sunk in.”

How often do you walk past an area cluttered with dusty, dirty, damaged boxes filled with countless unnecessary items, walls scattered with gobs of posters from past events, stalls and corners littered with dirty rags, cracked pavement, chipped and peeling paint … all having been overlooked for a long time, am I right? We have all done it; we’ve become immune! Once a dealer knows that a team of peer dealers and managers are coming to scrutinize their dealership, their eyes are suddenly opened to these neglected issues. Thankfully, the dealer usually has one to two years to prepare for an onsite review, and it’s not uncommon, upon arriving at a dealership, to see recently completed construction projects and thorough clean ups. However, shouldn’t this construction and cleaning have occurred earlier?

Very different from participating in a comprehensive financial composite review, an onsite review begins by instructing the dealership team to complete a set of questions (in writing) for each department and functional area of the dealership. Once completed, the final document (nearly 100 pages) is chock full of the dealership’s current status, pre-review. This is known as the onsite review manual.

During a 20 Group meeting, or even before in some cases, attending members are selected or volunteer to be on a particular onsite departmental team. Each team member receives a copy of the completed dealership onsite review manual, the group’s financial composite, and a three-month Profit Trend Analysis (PTA) to work with while deciding what questions to ask, which places to review in the dealership, etc. After spending some quality time together to create their team plan of action, the 20 Group members travel to the dealership to meet their designated departmental managers for a quick tour before settling down for an in-depth conversation and a thorough review of the work environment. Depending on the 20 Group, this whole process can last from three to eight hours.

As the conversations and queries take place, participating members complete a document created specifically for these reviews called the OCR (Observation, Concern/Celebration, Recommendation). The 20 Group utilizes the OCR during a scheduled follow-up critique with the dealer and their management team. It is then left with the dealer as a tangible asset following the review. Knowing they will be receiving these documents, the dealer and their management team can listen more intently during their review as there is less need to take notes.

While the dealer and their management team benefit from a 60+ page document of observations and recommendations, every 20 Group member involved is also looking at and scrutinizing their departments. Typically, reviewing members walk away with more ideas to implement in their operations than they present to the dealer during his/her review!

Very often, following an onsite review, several dealers ask us to send them a blank review manual so they can perform an in-house review on their own time. We’ve received great feedback for this as the manual allows them to pull back the covers and see what they were missing. It was right in front of them all along …

Join Kevin Cunningham or any of NCM’s other moderators in a 20 Group and get your dealership on the schedule for a valuable onsite review.

Permanent link to this article: http://blog.ncm20.com/2017/08/what-youre-missing-could-be-right-in-front-of-you/

Chip Maher

The Dilemma with Your Data

Car mechanic with customer

Often dealers will refer to reports generated by their DMS, CRM, or another vendor tool to track the performance of their dealership. If they’re not careful, relying solely on these metrics can be misleading and harmful to a business. For example, if an internet lead response time metric boasts a 95% response rate within 10 minutes, are those quick responses of a quality value? Do they satisfy customer needs? Or, if a Multi-Point Inspection (MPI) completion rate metric hits 95% on all repair orders, are they, in fact, being presented to the customer?

Let me reassure you that these performance metrics are critical and should be monitored and tracked. Both will drive performance and results, but only if the processes they track are executed properly. The metrics do not rate the effectiveness of the entire process, just one task within it. We need to make sure we’re tracking more than just the metrics. Monitor the processes, improve them, edit them, and your dealership will profit.

Response time for internet leads is a crucial metric for a dealership’s e-commerce performance. The industry has established guidelines suggesting “the quicker the response time, the more likely a consumer will engage, resulting in a higher closing rate.” Unfortunately, what the response time metric does not show is the quality of the reply. Also, this metric can be manipulated to show a response was sent simply to “stop the clock.” For instance, a manager could choose to have the system send an auto-reply which has nothing to do with the inquiry from the consumer. The manager’s goal is to record a quick response time, so the report is accurate, but the quality of the reply is rendered irrelevant and is counterproductive to engaging the customer.

The MPI is another process that drives great results if executed correctly. Of course, we want to track the performance of the MPI and accurately complete an MPI on all repair orders in the service department. However, the most critical portion of the MPI process is the presentation to the client of any additional services recommended after inspection.

If your dealership completes an MPI on 100% of its repair orders but doesn’t present the results to customers, you will not achieve the desired result. I have seen many stores that refer to their MPI completion as being in the 90-95% range, but upon closer evaluation of their processes, and observing their customer/employee interactions, the entire process is only being used effectively 20% of the time! This has become a larger issue as many stores have moved to digital versions of MPIs. Of course, you get 100% completion when you send the consumer an email or text of the MPI results; however, the presentation to the client, either in the service lane or during delivery with a paper copy, is the most impactful step to generate results. Some dealerships have reinstated the use of handwritten paper reports to encourage employees to present the MPI recommendations and make the additional sale.

MPI best practices to execute today:

  • Periodically audit your MPI process. Verify all steps are completed each time.
  • Check the cashier’s office randomly to see if copies of the MPI are attached to the repair order.
  • Staple the completed MPI to the top of the Consumer Repair Order at the cashier’s office. This ensures the customer sees it before leaving your store.
  • Keep laminated samples of the MPI at the write-up station so the consumer can see what it looks like and can anticipate a completed inspection summary upon departure.

Reports are great tools and certainly have their place in the dealership, but more importantly, audit your processes to ensure your dealership is achieving the results you need to succeed.

Learn more about analyzing your dealership’s business practices by enrolling in the NCM Institute’s General Management Executive Program. You’ll dive your existing processes and procedures, create new ones, and learn how to make the numbers work for you. Or, join an NCM 20 Group to review your metrics monthly and share best practices with fellow non-competing peers to gain great industry-specific ideas!

Permanent link to this article: http://blog.ncm20.com/2017/08/the-dilemma-with-your-data/

NCM Institute

#AskNCM: What is the Key to New Vehicle Success?

Used vehicle sales, service, and customer retention suffered in the wake of increased sales in the new vehicle department. As the economy ebbs and flows, we see the tides shifting; now the new vehicle department is beginning to suffer. How do we keep every part of the business profiting?

NCM Institute instructor Robin Cunningham gauges the situation and pinpoints what it’s going to take to keep your new vehicle department afloat in our ever-changing market.

Have another question for Robin or the other #AskNCM experts? Leave a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/08/askncm-what-is-the-key-to-new-vehicle-success/

Lycia Jedlicki

WHO Thinks We’re Overpriced?

Torso of a businessman standing with folded arms

I recently held a luxury brand parts and service manager 20 Group meeting, and one of the parts managers was proud of the fact that his counter gross retail percentage had increased by 3% that quarter. When the group asked how he achieved this, he told them something that stunned the room. He had reduced his pricing so his employees would stop discounting and overriding parts prices for their customers.

In the past, when his employees saw the cost of the part, for example, $1.25 for a fuse, they thought it was entirely inappropriate that the dealership marked it up and charged the customer $8.00. However, before you yell, “Fire that parts team,” realize that this is happening all over YOUR dealership and you may not even be aware. Many times, employees take it upon themselves to “right the wrongs” or “cheat” in business, so they can make the sale, reach the goal, gain the customer, or earn the SPIFF. Fostering an environment of open and honest communication, appropriate encouragement to meet goals, and a little room to make decisions to sink a sale can make all the difference.

The 20 Group proceeded to ask the parts manager if he thought the customer was going to leave their dealership without purchasing the fuse because it was $8.00. I’m willing to bet the answer is “No.” This scenario led me to remember an article I had just seen that says, “We are not going to be the least expensive, we are going to be the BEST and deliver the BEST experience possible.” Instead of the parts counter person discounting the part to $4.50, or another “acceptable” amount, he/she could say to the customer, “Let’s take this fuse out to your car and try it, just to make sure it works before you buy it.” I guarantee the customer would be pleasantly surprised and wouldn’t think twice about paying $8.00 for the fuse. Your employee ensured it worked correctly and solved their problem before they left our parking lot, so why would they question it? Taking the extra time to qualify the sale and genuinely help the customer has been linked to increased customer retention. As a consumer, don’t you enjoy shopping at and returning to businesses who care about you and your reasons for buying?

We also need to remind our employees how many complimentary things we do for our customers. Coffee and food in the waiting rooms, topping off vehicle fluids, safety inspections, car washes, battery checks, rental cars, shuttle services … the list is endless. Remind your employees of the value your dealership offers so they can project this value onto customers during the sales process. Instruct them to point out the complimentary amenities and casually offer them whenever possible. Emphasizing the value of a product or service, and the value your business brings, is another helpful retention strategy and continues to build the business/customer relationship.

Let me leave you with one last scenario: you hire a rookie salesperson and do a great job training him or her, and what do they do? They do exactly what you taught them to do. They sell the oldest vehicle for the most amount of money and retain a happy customer. 2017 is the year to train our employees to be the best, demand it even, to ensure both our businesses and team members thrive, and our customers leave happy and keep coming back. Which dealership do you want to be? The least expensive? Or the best?

Help your team become the best with training from the NCM Institute and membership in a manager 20 Group like Lycia’s.

Permanent link to this article: http://blog.ncm20.com/2017/08/who-thinks-were-overpriced/

Mark Shackelford

From the 20 Group: Scripts to Improve Service Advisor Sales

Cars in the automotive service

Service advisors see more customers in a week than many salespeople see in a month—without question, they are the public face of your dealership. And, when properly trained, your service advisors can bring in a steady stream of used vehicles to sell, customers to purchase units, and happy clients who frequent your service department.

These scripts and sales techniques, which I recommend to all my NCM 20 Group members, are a great start to transform you service advisors into sales professionals. Another way is to invest in training from the NCM Institute or arrange for an NCM consultant to present on-site training at your dealership.

1.   Friendly meet and greet script

“Welcome to ______ (dealership name).”

Offer the customer a hand shake, and then offer a business card.

“My name is ______, and you are …? (let them answer) Thank you for coming in today. Are you here for an appointment?”

Ideally, you should promptly greet the customer, but if you can’t, at least nonverbally or verbally acknowledge the customer. If the customer has an appointment with another advisor, then go get that advisor. If the advisor is not immediately available, start the write-up process with the customer. Do not leave the customer hanging unattended and unacknowledged.

Once the customer has been properly greeted, verify the following information—or gather it for the first time—and add it to his/her contact file in your system:

  1. Customer Name
  2. Customer Cell Phone Number
  3. E-Mail Address
  4. Vehicle Identification Number
  5. Preferred Method of Communication (Phone, Text, Email)

2.   Identify the customer’s primary needs

Next, a service advisor should determine the customer’s needs, using the LADDER technique:

L: Look at the person speaking to you

A: Ask questions

D: Don’t interrupt

D: Don’t change the subject

E: Empathize

R: Respond verbally and nonverbally

Keep the LADDER technique in mind while you use reporter-style questions to dig into the customer’s problem. Here are some sample questions using the “Six Ws”:

  1. What are the symptoms?
  2. Where do you notice the symptoms?
  3. When do you see the symptoms?
  4. How often do the symptoms occur?
  5. Who typically drives the vehicle?
  6. Why is the vehicle used? What for?

3.   Restate concerns

Be mindful of the customer’s comments and show that they can trust you by restating their concerns. Be sure to confirm your understanding of the concerns. Assure the customer that all their worries and concerns will be addressed.

4.   Perform a full circle vehicle walk-around

The walk-around does more than just identify problems; it helps build rapport and trust between the advisor and the customer. Here’s how to do a great walk-around:

  • Find common ground with your customer. Engage in conversation about their children, bumper stickers, aftermarket wheels, etc.
  • Discuss the condition of their vehicle.
  • Inspect the vehicle—tire tread depth, wipers, vehicle damage, windshield condition, etc.

5. Build value in your dealer recommended maintenance program

  • Get a maintenance guide into your customer’s hands.
  • Explain that your maintenance program is set up based on the driving conditions in your area.
  • Explain the benefits of your preferred customer maintenance guide.
  • Point out recommended maintenance items due at different mileage intervals.
  • Educate your customer about maintenance.

6.   Offer a courtesy multi-point inspection

Make sure that the customer knows that the multipoint inspection is free. Then, explain what happens during the inspection and why it’s important.

7.   Confirm final commitments

  • Explain to the customer what you will be doing to the vehicle.
  • Outline how much it is going to cost.
  • Determine if the customer plans to wait for the vehicle or if you need to arrange a shuttle ride or rental car for them.
  • Tell the customer when you plan to first contact them with an update. Verify their preferred contact method.
  • Have the customer sign the write-up sheet for an estimated dollar amount and any damage on the vehicle; note that any “diagnostic charges” will be applied to the bill.

8.   Follow up with the customer

  • Using the “10 AM / 2 PM / 4 PM” method, set up a deadline by which to contact the customer and give the customer a copy of the write-up sheet. Then, direct them to the lounge or rental office.
  • Present the multipoint inspection results.
  • Contact the customer two times per day with any updates: the first when the inspection is complete, the second when the job is done.
  • Set up a delivery appointment.
  • Instruct the customer to see you to review their paperwork.
  • Go over the repair order with the customer on the phone (tell them you would like to email them a copy).

9.   Customer active delivery

  • Review the customer’s completed paperwork including the multi-point inspection sheet.
  • Review the customer satisfaction survey process.

Script: “You may be receiving a survey from          (dealership name). It is my report card for how I did during your service visit today; it is vital to me. My goal is to provide all my customers with excellent service, so I would really appreciate it if you would take a few minutes and fill it out and send it in.”

  • Set future appointments in “lead results” (dates and times).
  • Next appointment card (offer the customer another business card with their next appointment noted on the back).
  • Escort or direct the customer to their vehicle.

10. 24/48 follow up with the inspection lead results

  • Inquire about the customer’s most recent service experience.
  • Ask how their vehicle is doing since service.
  • Thank them for doing business with you.
  • Remind them to send in the customer satisfaction survey.

Learn more from Mark and the other NCM moderators by joining an NCM 20 Group. NCM also offers manager 20 Groups where your team can gather industry best practices from peers and have a forum to voice new ideas and implement strategies to better your business.

Permanent link to this article: http://blog.ncm20.com/2017/08/from-the-20-group-scripts-to-improve-service-advisor-sales/

NCM Institute

#AskNCM: How Long Should It Take to Recondition a Vehicle?

Reconditioning used vehicles is a major priority for any pre-owned dealer. If the car isn’t on the lot, it can’t be sold. Therefore, every minute the vehicle is in the shop is possible lost revenue.

Steve Hall, an instructor at the NCM Institute, shares his top tips for reconditioning vehicles faster and more efficiently. See what Steve’s years of industry experience can teach us on this segment of #AskNCM.

Have another question for Steve or the other #AskNCM experts? Leave a comment below!

Permanent link to this article: http://blog.ncm20.com/2017/07/askncm-how-long-should-it-take-to-recondition-a-vehicle/

George Gowen

Give the Big Dogs a Run for Their Money

NCM-CD-708

Advance, NAPA, O’Reilly, Auto Zone, and Carquest all have something in common—they are in the parts business. More than that, though, they sell 100 times more parts and make 100 times more money than franchise car dealerships that sell parts. These parts businesses do not have OEM support. They do not have a service department at their store out of which they sell parts. And, they do not have a continuously growing customer base to prospect to. So how are they growing and building new stores across the country?

As car dealers, you support their businesses with millions of dollars of purchases. How many OEM parts did they buy from you? Are you content to let them be in the parts business without competition? What do they offer that you can’t? How many dealers have opened a stand-alone parts store? Take a moment to brainstorm what you can do to be competitive and, more importantly, make money …

Think of anything? Here are some ways to stay competitive with your existing parts department.

What’s your turn strategy?

At 20 Group meetings, the least interesting subject to dealers and general managers is always “the parts discussion.” Yet, it is the number one or two cash investment in any dealership (used vehicles may be an exception in certain cases). If we think of the parts department in terms of cash, we need to ask ourselves: Why don’t we focus on it more? I’m sure you have a turn policy on your used cars; do you know what your turn policy is for your parts inventory? Do you have a used car on your lot 9-12 months before you start to figure out an exit strategy? But that’s what we do with parts. Why?

Stock what you need, when you need it.

Having the part you need on the shelf when requested is more important than having the used car your customer firsts asks for. You can always switch the used car buyer to a different car, but not so with parts. If the part is not on the shelf when requested, it’s a lost sale. Most parts managers don’t count these as lost sales if they can get the needed part within 24 hours via a factory order or an outside purchase from a competitor. The fact is, having the part in stock when you need it will not only increase your margins but dramatically increase your service departments’ efficiency. What is the amount of monthly lost productivity in your shop because you don’t have the right parts on the shelf? If this metric was measured and multiplied by your labor rate, it would astound you.

The Math: $300,000 in outside parts purchases equals $300,000 in labor sales, divided by $100 per hour labor rate, comes to 3,000 labor hours. Assuming 1.5 hours per RO, we can say you had 2,000 ROs that had been delayed 30 minutes each waiting on parts. That comes to 1,000 hours of lost productivity, times your $100 per hour rate, equals $100,000!

Doesn’t it seem worthwhile to have the part on the shelf?

Training is a must.

How much training did your parts manager participate in last year, or ever? How can you get best practices in your parts department? TRAIN them. The NCM Institute offers outstanding parts manager training and NCM has two parts management 20 Groups whose numbers are constantly improving due to their openness to share ideas and best practices. Either or both will yield a huge ROI.

It’s time to get into the parts business and beat the competition.

Permanent link to this article: http://blog.ncm20.com/2017/07/give-the-big-dogs-a-run-for-their-money/

Alan Ram

The Importance of Call Monitoring

Smiling salesman having a phone call

Do your managers listen to every sales call on call monitoring? I speak at a lot of Dealer 20 Group meetings, and this is a question I consistently ask the dealers. The overwhelming majority of the time the answer I hear is a resounding, “No.” I have even had general managers tell me that they canceled their call monitoring because they couldn’t get their managers to listen to it. Are you kidding me?

Call Monitoring Is Not Optional

When it comes to selling cars today, there is no activity for your managers to be engaged in that is more productive, or more relevant, than listening to sales calls and quickly resolving missed opportunities to do business. It’s as easy as your managers having call monitoring open on their desk throughout the day, and listening only to sales calls.

I often hear the excuse that managers just don’t have the time to listen to every sales call. Let’s face it, how many sales calls do you honestly get each day? You probably get 10, 20, or maybe even 30 sales calls throughout the day. Compare that number to how many managers you have on staff throughout the day. Don’t tell me your managers don’t have time to listen to sales calls. As long as your phone numbers are tied to the right departments, it’s not a problem.

A “Save The Deal” Tool

Why is it important for managers to listen to each sales call throughout the day? Because call monitoring is more than just a tool used to judge how well your salespeople are handling inbound calls. Call monitoring should not be thought of primarily as an accountability tool. More than anything, it should be thought of as a “save the deal” tool. If something goes wrong on a sales call, your managers should be able to immediately intervene and resolve the issue. However, this cannot happen if your managers aren’t listening to the sales calls. If the customer calls your dealership at 10 a.m., that means they will be out buying a car at 4 p.m. If your managers are waiting until 8 o’clock at night to listen to that call, it’s too late, and the opportunity is gone.

Another benefit to listening to your sales calls on call monitoring is the accountability factor. In other words, when salespeople know that you are listening and that they are being held accountable for their performance, their effort level naturally rises. It goes hand in hand with training. If you hold your people accountable without training them, all you’re going to hear is weak salespeople and missed opportunities. It’s simple. Train your people and then hold your sales staff and managers accountable.

Call monitoring gives you the opportunity to save deals and make sure that each opportunity is maximized, as well as provides you with a tool to hold your salespeople accountable and find areas for improvement. It is an invaluable tool and it is critical that managers use it every single day.

What About Outsourcing?

In today’s automotive industry, outsourcing call monitoring has, unfortunately, become an option for dealerships. Outsourcing your dealership’s call monitoring is a bad idea. Someone who is monitoring your calls three time zones away and working out of a basement is not nearly as qualified as your managers to make a determination on when a call was maximized versus when it wasn’t. Your managers can tell whether or not a woman who just made an appointment on the phone is really coming in, or whether she simply set an appointment so that she could end the call quicker. They can gauge whether the appointment is real or whether it is smoke, and can make the determination on whether they need to call the customer back and tighten things up.

Don’t waste the opportunities that call into your dealership every single day. Call monitoring needs to be a priority at your dealership. You need to make sure that your managers are listening to your sales calls every day and throughout the day. If you want to see your dealership succeed, this is not optional.

Check out in-person training options through NCM Associates, and discover our online platform, NCM OnDemandAlan Ram’s Management by Fire course offers additional tools for your dealership training needs.

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