Remember our 2018 New Year Resolution on how make your dealership more profitable by increasing customer satisfaction and creating more profit retention while lowing the cost of doing business? Good! Well, that requires us to get in touch with what matters most to your business! I refer to it as “Management Alignment” and that defeats the many hidden activity-based costs associated to Management Malpractice!
As we all know margins are getting thinner in every profit center of the dealership. Margins will continue to get thinner as the industry evolves and gets more and more competitive. Regulated margins are sure to get even smaller. For your dealership to survive and thrive in the new normal, you need a serious success plan and strategy. This success process is something that can no longer be negotiated and ignored!
When it comes to service and management success: “Perfection Is The Goal and Excellence Will Be Tolerated!” That’s a quote from the great Paul Cummings! No matter how you look at every level of performance, there is certainly always room for improvement within parts and service -AKA- the fixed operations department.
Action Plan
In order to get the ball rolling and generating what I refer to as intentional results, a plan of action will be required! Keep in mind that while planning is good, actions are better. This is true and requires the entire management team to get involved such as dealer/principals and general managers. As a team, everyone should consider:
- Make the time necessary to roll up their sleeves and get more involved with their fixed operations department managers on a daily, weekly and monthly basis. Define what intended performance levels are and take the necessary actions required to achieve them.
- Gain a deeper understanding of your highest-margin producing department and the employees who generate those performances and results. I call it “Intentional Profitability!”
- Commit to understanding fixed operations as a profit center.
- Decide to run the business for value and profit.
- Know your customer’s expectations.
- Deliver on those expectations! (By doing the work)
- Know the value of your parts producing inventory.
- Know the value of your service departments time bank (Inventory Hours Available).
- Know the disruptors of Parts and Labor Hours Inventory
- Maximize facility utilization beyond normal business hours.
- Be Open More! (The Same Hours Sales Is Open) is the new normal!
- Answer the phones properly and timely! (The Importance of doing so)!
- Be more invitational, and make more appointments!
- Not keeping fixed-ops in the dark any longer.
- Properly and routinely market your dealership’s value added services.
- Restructure your team and facility for the new normal business model and unique value proposition.
- Stop settling for customer satisfaction and aim to build and provide real Customer Service Excellence.
- Create a value added service model to better serve your customer’s expectations wants and needs.
- Understand the pain points for your customers: location, pricing, convenience, lack of product/offerings, people willingness and ability to serve?
- Learn to adapt and adjust your business model and value added service offerings accordingly.
- Provide appropriate and ongoing service advisor training.
- Understand that the service manager has the most difficult inventory to manage (which is perishable by the way), with the least amount of training in managing time inventory turns!
- Establish the controls and next practices to help drive business forward in any economy!
Understand that sometimes less is more! - Never settling for average performance!
No Top-level Management involvement?
Without top-level management involvement, it is unfair to expect a typical service manager to further assess and influence:
- The profit points and centers of the dealership
- Next level Intelligent automation and technologies
- Originate marketing strategies
- Maximize DMS data and information
- Effectively manage techs
- Effectively manage service teams and processes with precision, or
- Further maximize the fixed operations business model.
Action Steps
Get the department manager the training they need in order to provide high levels of performance and profitability. Consider a quarterly fixed operations performance check-up and/or tune up!
As we dive deeper into transforming 2018 to be the best year ever in fixed operations, let’s not forget what matters most — the customer service experience in automotive retail!
Success in business today requires a defined sales to service and back to sales customer retention process that is constantly and properly managed! As we have previously mentioned and proven! “Business goes where it’s asked for and it stays where it’s appreciated!”
As vehicles become smarter and smarter Fixed Operations will and always will be the link in creating a virtuous cycle for customer retention. Driving business model change takes accountability and disciplines. For those who are up for the challenge, the rewards and payoffs of a management alignment initiatives are exponential!
