If you’ve ever worked in automotive retail, you know that there are constant internal struggles going on between employees and their departments. The structure of most dealerships actually encourage this – similar to how a salesperson’s pay plan incents them to sell cars.
The most obvious friction oftentimes occurs between sales and service. While in theory, everyone is on the same page, how many times have you heard a sales or used car manager complain about what they feel are excessive reconditioning costs on a newly acquired unit, decreasing potential front end profit? I’d guess that’s nothing new to you. Used car managers are paid based on the profits they bring in on sales. Service managers are paid based on service revenue. So each has their own motivation for maximizing one or the other.
Well, does it have to be like this, or is there a better way?
Automotive News recently ran a story reporting a Mercedes-Benz USA initiative that will immerse corporate executives within retail dealerships so they can better understand how the decisions they make on a corporate level impact operations at the dealership level. Similar to the butterfly effect whereby a butterfly flaps its wings on one side of the world, eventually causing a hurricane on the other, decisions made that impact others can have consequences that the decision maker can’t predict or would never see.
This initiative also aims to help corporate executives identify and fix problems with customer experience, processes and financial considerations, including co-op money and incentives.
By putting their executives in dealerships, Mercedes-Benz isn’t doing anything new – at least in business. Most businesses – especially those in the hospitality industry – require cross training as part of their management curriculum. Restaurant managers will, throughout their training, work in each and every department in the restaurant – from cashier, to greeter, bartender, server, cook, etc. By having the knowledge of what it takes to do the job, as well as how difficult it is, the manager is better able to prioritize tasks in times of need and also identify traits that would make for good employees in certain positions. In addition, the manager can be sympathetic and more objective when making decisions, whether they be departmental, or more specifically position or staff-based.
How many times have you hired a General Manager and made them work as a porter for a few days? Probably not too many. Well, think about this for a second – one thing that’s consistent across every new or CPO manufacturer survey is the cleanliness of the vehicle upon delivery. Don’t you think it would be valuable for a GM to know if there is friction in that process that is extending the time it takes for porters to clean the vehicles properly; or if the dealership is staffed adequately to handle volume; or if the porters have the supplies they need to do an excellent job? Absolutely it would.
Now let’s revisit our first example. What if you had the service manager work with the used car manager for a week – visiting auctions, inspecting potential trade-ins – and then had the used car manager work with the service manager? Do you think they’d both have a better understanding of the challenges they both face? I bet they would.
The same logic applies to every position in your dealership. Do you want salespeople to understand why the F&I process sometimes takes so long? Let them shadow an F&I manager for a couple days. Perhaps they won’t complain about why it’s taking so long for their customers to go into sign paperwork anymore. Or, even better, maybe they’ll figure out ways to speed up the process on their end, thus making the entire experience smoother and more enjoyable for the customer.
Regardless of how many years of experience your managers have, unless that experience is at your specific store, your processes, staff, resources and facility vary by individual and by department.
Consider adopting a training process embraced by almost every other retail sector in existence. You may well find that you create a closer and more efficient team and a better working environment which, in the end, will translate into a better customer experience. And the end result of that is more money in your pocket.
Author: Michael Gorun
Michael Gorun is founder of Performance Loyalty Group, a technology-based owner retention and loyalty company. He has more than 25 years in operational service management positions for Ford, Nissan and General Motors. He can be reached at: firstname.lastname@example.org.