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Dealership Newsmaker Q&A: Robert Atwood
Source From: Aftermarket Business
Posted Date: 2010-11-19
Robert Atwood is an NADA Academy Instructor.
The National Automobile Dealers Association (NADA) operates NADA University, an education and training resource that conducts both live and online seminars for dealership staff. Robert Atwood, an instructor at NADA University, conducts many of the fixed-operations seminars. For more information on NADA University, including details on all the education and training programs it offers dealers, go to www.NADAuniversity.com .
You lead the “Advanced Service Management” class. Can you tell me a little about what goes in that particular program?
We bring in service managers from all over the country, and they generally come in twice a year. We target the down-and-dirty basics as far as what you need to operate a successful service department. Most service managers know the basics, but unfortunately they forget about them because they are too busy putting out fires all day long.
What I do first thing Monday morning is introduce myself, and then I go around the room and have the managers tell me how long they've been in the store, what they do there, and what their hours of operation are, and then compare that to the hours of operation in the sales department. That's usually when I start to get a bit concerned. I'm a firm believer that the sales team sells the first car, but service sells the second or third car. If you don't have the opportunity to introduce the customer to the service department at time of delivery, then you are missing the boat.
Based on what you hear from participants, what are some of the biggest challenges service managers are facing right now?
Just this past week we went around room, and one of everybody's main concerns is that repair order count is dropping. Well, no kidding! Is the dealership selling fewer cars than last year? That is easily correctible if we look at labor sales and labor gross. If you look at the breakdown, there are three types of labor: customer pay, warranty and internal. A successful dealer should be at 60 percent customer pay, 40 percent warranty and internal.
Warranty dollars are dropping dramatically. We want to increase customer-pay labor. I always ask them one question: Is your customer right now happy with the level of service they are receiving on their new car? The answer is always yes. Well, does the customer know where to take their other cars for service? Why can't they bring them to you? I want every advisor to ask every customer if they have any other vehicles at home that we can service and maintain. I want that customer to think of your dealership as the only dealership for all of their service and maintenance needs, regardless of what they're driving.
The independents have been servicing all makes and models for years. I'm just asking the dealers to expand what they're doing with used cars so that then can take better care of their customers. If we don't do that now, the customer will go somewhere else.
Hours of operation have also got to be convenient for the customer. You can't expect customers to take a day off of work to have their car serviced. Service hours have to mirror sales hours. Be open for convenience of the customer, not the convenience of the employees.
Moving forward, what are some other strategies that seem to be working for parts/service in this new economic reality?
All service advisors have business cards. Lets say I've just asked my customer, Mr. Johnson, "Do you have other vehicles we can maintain?" Before he leaves, I'll ask him to write his name on the back of one of my business cards, and then ask him if he has other family members or co-workers that might need their car serviced, because my dealership services all makes and models.
One of the most important questions you can ask your customer is, "Would you refer me to someone else?" If they hesitate or say no, what have I done wrong?
What sorts of parts issues are managers facing?
Unfortunately, I believe the parts department is the number-one stumbling block to technician proficiency. Proficiency is defined as hours produced divided by hours available. Hours produced is what the flag sheet says; hours available is what is on the time clock. If I turn six hours during an eight-hour day, I'm 75% proficient. If you're not at 100% proficiency, then you're not selling all the hours you have available.
Why is the parts counter the stumbling block? A technician walks up and asks for a part, the counter person says they don't have it, but they can go down the street and pick it up. Now it becomes an emergency purchase, but more importantly it results in lost technician productive time.
I go as far to tell students that they should put pad of paper on back parts counter. Every time you don't have a requested part, you want to note three things down on the paper: the repair order number, the part number, and a description of the part. At the end of the day, the two department heads should sit down and look at that paper. Let's say there are 15 items on that paper. Ten of them are non-stock, and that's okay. But as a service manger, I should say to the parts manager, "Did you track them as a lost sale?" Because if you don't give the computer system that demand, it won't suggest you bring it into inventory.
What about the five stock that we didn't have. You should look at stocking quantity. If the quantity was set at one, and you sold another one before you could replenish, maybe we need to bump that quantity up to two. By doing that daily, you can see what's going on in the parts department.
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