By far the most popular article I’ve written for Dealer magazine over the past five years was the one published in April 2016. I got more feedback (all positive) and more requests for my accountability spreadsheet than almost all of my other articles combined. So I’m guessing it struck a chord…or more precisely, hit a nerve!
For those of you who read it, I have a question for you: How much money has that article made you? I should actually ask a more pointed question: Did you implement the simple process outlined in the article? Because if you did, you made money.
All of my articles are archived by Dealer magazine, so if you missed it or want to re-read it, simply go to http://www.digitaldealer.com/magazine/.
The automotive industry is blessed with an abundance of trade publications, both in print and online. Even though the consultants, experts, and contributors come from wide and varied backgrounds, there is amazing continuity in the advice offered. Each month, there are scores of “best practices” available to you and your fixed ops team. Solid, meaty, profitable ideas that will enhance your gross profit and your customer retention. It’s good stuff.
“The automotive industry doesn’t reward knowledge, longevity, creativity, or a positive attitude; it rewards results!”
All that to say this: knowledge won’t make you any money. Only application and implementation, read that as “action,” will translate into increased revenue. The automotive industry doesn’t reward knowledge, longevity, creativity, or a positive attitude; it rewards results! There is no substitute for getting the job done. Don’t be one of those managers that is always learning but never coming to the knowledge of the truth. In Oklahoma, we call that “all hat and no cattle.” All talk and no action.
To avoid this trap, I want to encourage you to latch onto one good idea each month, or each quarter, and make it happen at your dealership. Stay with it. Get your people to buy into it and hold them accountable to do it. Reinforce the message each month, reward accomplishment, and coach those who are struggling. If you make it a priority, they’ll make it a priority.
Back to that April 2016 article. Let me tell you a true story: Doug is general manager of a large, metro import dealership in Canada. I met him at the NADA convention a couple of years ago and did several days of consulting and training with his dealer group last year.
Doug embraced the accountability spreadsheet that I described in the article. Doug required that his advisors fill out the spreadsheet and email it to him at the end of each week. Service sales accountability has become a priority for Doug and his service sales team. Every week he monitors the customer-pay maintenance penetration rate and sends an email with the numbers to all of his advisors on Monday morning.
As a reminder, maintenance penetration rate (MPR) is determined by taking maintenance services sold and dividing by the total number of customer-pay repair orders. So if an advisor saw 100 CPROs and sold 45 maintenance services, the MPR would be 45%. MPR is a measure of the effectiveness of your service sales staff. It’s like “ups” versus cars sold.
Here’s the email Doug sent his team the last week of July 2016:
Here are the week 4 preventive maintenance penetration numbers. William continued his trend coming in at 110%; congratulations for being #1 for the past three weeks in a row. You have earned another $50 for your performance! It is nice to see that Patrick was very close, coming in at 105%, kudos to him.
Here are the rest of the numbers for the month:
In the month of July, William’s SALES performance generated 159 maintenance services on 128 customer pay work orders. Congrats! Let’s continue this trend in August. The team average of 84% Is awesome! Nice work everyone!
Doug, General Manager”
Now that’s positive reinforcement! I’ve seen several additional emails Doug has written where he refers to his top advisor as “The King.” He uses words like “woohoo,” “impressive,” “great effort” and “kudos.”
And look at that team average; 84% penetration means that for every 100 customer-pay cars seen on the drive, they are selling 84 maintenance services. No wonder he uses those power words- his service sales team is doing their job—they are selling service!
I guarantee you, Doug is spending less than 30 minutes a week compiling these numbers and writing the email. His advisors earn a nice monthly bonus for each maintenance service they sell, an additional $50 weekly bonus for the top producer, and high praise from the man running the dealership—it doesn’t get any better than that! At 70% gross profit for the service department, this is a win for everybody. The biggest winners, of course, are the vehicle owners who are receiving needed preventive maintenance services to keep their cars trouble-free and fun to drive.
Let me quickly contrast Doug’s success with another general manager that also loved the accountability spreadsheet and said it was one of the best tools he’d ever seen. He also runs a large metro import dealership. The MPR in his service department is 6%. Wow, you talk about a program being a total failure! His advisors remained unmotivated and the dealership didn’t make a dime. Oh, by the way, he never implemented it. You get the point.
Email me at email@example.com and I’ll send you the spreadsheet. In the subject line, write “Send the spreadsheet, I promise I’ll use it!”
Happy service sales to you!
Author: Charlie Polston
Charlie Polston is an Automotive Customer Retention and Profitability Consultant with BG Products, Inc. Charlie has been with BG’s Fixed Operations Division for over 34 years.