MONEY-MAKING MINUTES

Don't eat shipping's extra costs

Your manufacturer charges about 13% for overnight and emergency parts orders. Do you?

Add an additional line to your doc sheet (new account number) to track the credits received when charging your customers for these special shipments. This will give you a clear picture of how much you're spending vs. how much you're receiving from your customers.

Take the necessary steps with your parts personnel to implement this program and watch the savings.

Such a crazy idea - but it works

Do you find yourself fighting the never-ending battle of turn-around time for internal units through the service department? Do you ever say, “I'm your best customer, I should come first”?

This situation plays out in service departments across the country on a daily, if not hourly, basis. But it doesn't have to be that way.

Try paying your service department $10 more per hour than your customer labor rate. If your posted customer labor rate is $62.50, offer to pay $72.50 for all internal labor.

Crazy you say? Not really.

This strategy works at several dealerships.

You now are the best customer of the service department. You will find the service manager will give your units top priority when it comes to service. Yes, the cost may be an extra $30 on a three-hour repair ticket. So what? You can sell the unit faster. And you will be surprised that your gross profit won't drop.

You will have the service manager looking for work because he or she realizes that you are a better source of labor revenue than the retail customer. The bottom line is your inventory units move through the service department much faster and everyone is happy.

Make it clear who reports to whom

Does your dealership have a clearly communicated and well-understood organizational structure? Does each manager and employee really know to whom, specifically, he or she is accountable?

Everyone reports to somebody, but everyone has the right to report to one somebody. An organization works if all of the somebodies know which of the everyones are to report to them and vice versa.

A dealership without proper organizational alignment is like a car with a faulty steering mechanism. You can drive it, but it doesn't maneuver well. Organizational misalignment results in instability, misdirection, employee unrest and, ultimately, loss in bottom-line profitability.

Develop, update as necessary and communicate the organizational structure to the management staff, including each manager and employee who reports to him or her.

Money-making minutes is provided by NCM Associates in conjunction with the Automotive Satellite Television Network (ASTN).