O.K. Dealership Break’s Over, Back to Work

I’m blessed to have worked with many dealership service department managers over the years. Our business has no limits. The only perceived limits are the edges of our imagination. I’m not trying to get too philosophical.

But let me frame the current state of affairs at many dealerships. We have more demands on our businesses than we have production capacity to handle them. Many managers are sitting back complaining about how hard it is. Well, guess what?  That’s why they call it work.

It requires effort. Let’s do a quick backtrack to 2008 and 2009. This was the worst time in our industry I have ever witnessed.  I don’t care to relive this period and will do everything in my power to prevent it. 

Dealerships closed because they couldn’t pay the bills. Now, some of us are sitting back. It’s time to get back to the basics. Here are two examples.

Expenses:

I review a lot of dealership financial statements. My observation is service department expenses have increased 5% to 10% in the last year. Why? Because we have taken our eye off the basics. 

Expenses should be managed daily. All vendor invoices should be reviewed and approved by the department managers. Have safeguards in place to prevent the “price creep” that occurs when vendors try to high-gross you. Why allow a vendor to do that? Review your expenses.

Production:  

Car and truck sales are good, and the demand for service has grown. But we’ve had major challenges in increasing production output.

Case in point: I was working with a manager who was crowing about how his sales were up 20%. But he was actually going backward, because his traffic was up 28%.

Increasing the production of quality flat rate hours is a target-rich environment. Opportunities are everywhere, but sitting back and letting them come to you is not a viable solution. 

Set expectations of performance that increase continually. Expect manager to know every day how many flat hours are produced. Not about, close to or in the area of, but the exact number.

New and innovative ideas are required for hiring qualified auto technicians. A lot of managers are convinced they can’t find quality technicians, and guess what? They don’t. It becomes self-fulfilling. 

They complain because the OEM is not doing enough to increase the availability of technicians. Again, I say go to work!  It’s not easy to find them, but we must. Waiting for the OEM to do something is not a valid excuse. Many managers have developed brilliant ideas and have found success in hiring skilled technicians. Where there is frustration, there is the potential for growth. 

The customer has many options in finding a repair facility. We can buy all the technology available, but it still comes down to people interacting with people.  Focus your advisory staff on selling the relationship, not the business.

Our business is needs-based. Customers need an oil change. No one has to sell them on the service. You need to sell them on the idea that they are smart for selecting your dealership as the service provider. 

Your customers buy from people they like and trust.  Forget about trying to dazzle them with your superior sales ability. Sell the relationship. It’s easy, and most people are good at it. They have had a lot of real-life experience in selling themselves. It comes natural. 

Success doesn’t breed success, only hard work does.  Let’s go to work.

Fixed-operations consultant Lee Harkins heads M5 Management Services based in Pelham, AL. He can be reached at 205-358-8717 and at [email protected].