Tom Restino gets it! Restino is general manager and vice president of operations for DePaula Chevrolet in Albany, New York.
I had the privilege of meeting Restino a couple of months ago when I was in New York training a group of automotive professionals. I was so impressed with his fixed operations set-up, that I wanted you to know about it too.
First, we’ll take a look at their numbers, then we’ll look at the steps they have taken and the processes they have installed to get them where they are today.
DePaula Chevrolet has six advisors (one wears the title of “production manager”) and 23 technicians. They have three super groups: one group for trucks and two groups for cars and SUVs.
In 2010, they had a total of 28,500 ROs: 13,200 customer-pay (46%), 9,400 internal (33%), and 5,900 warranty (21%). Shop efficiency is rocking along at a steady pace, and they are averaging 2.3 hours per RO. Last year, their advisors sold 6,700 fuel services, premium lube services, and fluid exchanges. That’s a maintenance service penetration rate of 51% (6,700 upsells divided by 13,200 CP ROs equals 51%). These maintenance service sales represented revenue of almost $1 million!
Like so many dealerships that have been caught in the economic reality of the last several years, DePaula has seen a decline in new vehicle sales. Even though they sold more new cars in 2010 than in 2009, their sales are down by 35% when compared with 2004 numbers.
Declining car sales means fewer units in operation, which usually translates into less traffic on the drive and lower fixed ops revenue. But not at DePaula Chevrolet: their customer-pay has remained steady and their fixed ops revenue was up 25% over the previous year.
Let me restate that just for clarity: despite a decline in vehicle sales, traffic on the drive has remained steady and service revenues are up substantially. Somebody say, “Wow!”
Okay, now for the good stuff. Here’s how they did it and how you can experience the same kind of growth, also:
- Move your office
Restino’s office is right in the middle of the service department. He sits between the service drive and the shop with a clear line of sight to both. His desk faces the drive, in fact, you have to drive around his office to get into the main shop.
- Get in the game
Restino knows what’s going on in his shop and on his drive all the time. “I walk it,” he says, “every day I’m out there. I’ve got to see it, touch it, and experience it in order to lead it.”
Restino continues, “Somebody has to be the driving force in fixed operations, and that somebody is me! There are just some things you can’t delegate, and leadership is one of them.” Amen, you preach it, Tom!
- Keep the techs busy
One of the service advisors is called the production manager. His job is to “keep the pipeline full” by constantly evaluating technician output and maximizing shop efficiency. Restino created the position to keep everyone on their toes and to cause the techs and advisors to keep their focus on urgency.
- Sell maintenance services
Of course, before the work can be performed it has to be sold. “That’s why the advisors have to be the best salesmen in the dealership,” Restino says. “I give them their numbers every day. I hold them accountable to sell service. Their pay plan is based on their ability to sell!”
Restino is also the service sales manager. He is constantly on the drive mentoring and coaching the advisors. He says he’s always trying to “pull the best out of everyone.”
- Retain the customer
“You’ve got to condition your service advisors to ask for the multipoint inspection every time,” Restino stresses. “You’ve got to maximize every car, it’s the key to building retention.”
“Our primary mission is to capture the customer: answering the phone quickly, setting appointments, selling needed services, giving the customer a positive drive experience and washing every car. We are always pursuing the ‘wow’ factor.”
- Hire good people
No man is an island. Over the past 11 years that Restino has been at DePaula Chevrolet, he has built a solid team of automotive professionals. “I always keep my eyes open for new people, the best people, to add to our staff,” he commented. “These guys support me and I support them. We have fun.”
- Have the support of your dealer
“My dealer, Anthony DePaula, understands the value of parts and service to the overall profitability of the dealership,” Restino concludes, “and he knows that fixed operations is the single biggest factor in customer retention. Your next new car buyer is your current service department customer.”
Let’s fast forward to 2011; Restino tells me it was a rough winter. Albany typically gets about 50 inches of snow a year, they got that much in January, alone! The snow got so bad at one point that they had to shut the dealership down for a few days. So how did the service sales team respond? By increasing parts and service revenue by 13.5% over January 2010! Amazing!
So, hats off to Anthony DePaula, Tom Restino, Mark VanDenburgh (the service manager), the service sales team, and the technicians. You guys are an inspiration to all of us. Congratulations to DePaula Chevrolet on a job well done, may you have many years of continued success!