HOW SOLID BUSINESS PRACTICES OFTEN GET SHELVED FOR TRIVIAL REASONS
We once listened to a mass merchandiser who had a very interesting theory. It was that most successful businesses eventually fail because they stopped doing the things that made them successful in the first place. So with that in mind, what about about your own business?
Occasionally, when consulting in dealerships we suggest an idea for improving the business only to be told that “we used to do that!” The next natural question is did it work? The answer often, is yes!
Ok, question number two, why then did you stop doing it? The excuses often range from “Joe refused to do it,” to “ Mary was sick,” or “the Service Manager left,” or and this is a good one, “we don’t honestly know.”
Here are some real life in-store experiences on processes that were implemented, made significant improvements to the business and for no good reason, simply stopped.
WORTH MORE
We designed a pay plan for an aggressive and way above average service manager — this was based strictly on both CSI and bottom line improvements. The numbers went through the roof, but three months later the dealer terminated the plan. The reason given, was that he was “making more money than my sales manager!” Well maybe he was worth more!
The end result of course, was that the manager quit and the numbers went back down. There are other ways dealers control service managers’ bonuses, but that is a hot topic best left alone, at least for now.
Being great believers in “you can’t manage what you do not measure,” we could never understand why only the sales staff have numbers and goals posted in the boardroom.
The fixed operations side also relies on sales, for example the service department sells hours. So, with that in mind, we had a dealership post service sales by technician and service advisor.
This created some real interest amongst the staff and the numbers started to improve. However, around three months later they stopped doing it and could not come up with a reason why. As a result, the following month the numbers started sliding back down.
JUST ONE CUSTOMER
Having service advisors doing a proper walk around and inspection of the vehicle during the write up phase is good for both the dealership and also the customer, so we designed a very user friendly worksheet.
We also gave staff process training on how and why this system is so important. And, over a two month period they got measurable results but then stopped! Apparently one customer complained, while others really liked it. Just one customer complaint shelved the process!
Air filter sales in most stores are pathetic, if you don’t believe us just look up your fastest moving air filter to see how many you sell per month. The problem is that technicians would rather blow them out with an air gun than waste time trying to sell one that they will not get paid for.
The solution is easy. Get the service advisors to ask the customer at write up time, “If your vehicle requires an air filter can we go ahead and put one in?” We did this in a store and they showed us a mountain of old air filters on our next visit. It’s sad to say a few weeks later they stopped asking the question.
Many dealerships are now into tire sales, which is great to see, but here is the challenge:
While independent stores have a penetration of 70 per cent tire sales to alignments or higher, dealerships often have only 8 per cent. Another easy fix, or it should be!
In one dealership we trained the service advisors to make this following statement! “We recommend a wheel alignment when installing new tires, to protect your investment.” If the customer declines, note it on the work order, “customer was recommended a wheel alignment and declined.”
This protects you if the customer comes back in three months and complains of premature tire wear. We tracked a significant increase in wheel alignments, but as in other instances after a short time the service advisors stopped making the recommendation, but had no reason why.
THE SEVEN TIMES RULE
There is an interesting theory called the seven times rule, which is based on the fact you have to tell people seven times before it becomes an entrenched way of doing business. The problem is we give up around the fifth time, so even some of the best ideas that were working come to a grinding halt as the staff slowly stop following a process.
There is an old but true saying that you have to inspect what you expect. So where does the main problem lie? Could it be lack of training?
When we ask the question “what is your training budget for the fixed operation?” we often get a blank expression. Is the pay plan right and geared to running an efficient leading edge operation, or is it the same old plan that has not been changed in decades?
We read an interesting statistic that a dealer will spend on average one hour per day in a meeting with the sales manager, but less than one hour per month with their service manager.
Once we suggested to a dealer that they should spend more time working with the service department and were told this. “I know the time I spend with the sales department creates more vehicle sales, I just don’t know enough about the fixed operation to be able to make a difference!”
Could this be where the main challenge lies?
