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Rick Wegley

Wagging the Dog: Don’t let a 5% problem ruin everything

Over the last several years, I’ve visited hundreds of dealerships. And, while performing operational assessments, I discovered that the majority of the headaches plaguing the culture and profitability of my clients were self-inflicted.

The problem with too much regulation

Intending to control unique and infrequent variables—and keep them from disrupting their daily routine—I found managers who kept adding steps and reducing employee empowerment. They chose this approach in lieu of defining the structure of the fundamental process, then documenting and training employees on it.

You can map out only so many scenarios. No matter what, unpredictable and uncontrollable variables will appear in nearly every customer service or sales environment.

Ultimately, managers created hurdles that made their jobs easier. But these limitations severely curtailed their employees’ ability to meet objectives and take care of customers. Most importantly, they completely changed their overall process in an attempt to manage the 5% of unique variables we call exceptions within their business model—and, in doing so, negatively impacted the 95% majority of the customers. Worse, they even created culture problems within the store!

Variables are unavoidable

So many processes changed. And, yet, these managers still were unable to avoid the unpredictable and uncontrollable variables that come with doing business.

By trying to control everything, most created new problems along the way. Now, they spend an inordinate amount of time and resources trying to manage a department with ineffective processes for handling the majority of their day to day operations.

Employee morale is low. Customer satisfaction suffers. And the department isn’t meeting its objectives. There’s pressure from above to “right the ship,” and these managers are unable to identify the root cause of a growing problem.

Manage by the RIGHT numbers

You should definitely manage by the numbers, but make sure you’re using the right ones.

Take a good look at your current structure and re-evaluate your current processes— simplify wherever possible. Involve your employees. And solicit feedback from both them and your customers on what is working well and what they feel needs improvement.

Once you have simplified and streamlined your processes, put them in writing. Hold meetings with all of your employees and make sure they all understand the revised processes. Provide the necessary training and resources for employee success. Definitely let them know what the empowerment guidelines are and the accountability aspect for each individual role. And clearly explain the minimum acceptable standards for performance.

Don’t forget the “why” part of this equation when discussing any changes with your employees. Discuss some contingency plans you have considered for the exceptions, and then review the empowerment tools that you have provided for them to use. Give examples of how and when they should be used.

The 5% goal

Manage 95% of your business by process, and then manage the 5% of exceptions. Once a clearly structured business model is in place, a manager should need no more than 5% of their time managing unpredictable and infrequent variables. This ideal state requires simple, defined processes (in writing) to manage the majority of predictable and measurable daily activities that contribute to profitability and customer satisfaction.

Is the tail wagging the dog at your store? If so, take a good look at your current structure and re-evaluate your processes. Chances are 95% of your problems are self-inflicted.

Tell us how you manage exceptions in your business? Is it a 95/5 mix or something different? Comment below with details. 

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Steve Hall

Collision has Recovered: It’s Time to Get Serious

I’m not going to lie: Collision has a bad rep.

Collision Centers Infographic

Just look at the statistics. Collision centers have declined 57% since the Eighties, and a whopping 27% of that drop has happened since just 2007. Stricter environmental regulations have increased expenses, and direct repair programs have changed how clients are acquired. So, when business got tough during the 2009-2010 recession, many dealers saved costs by closing the doors on their collision center, and shifted focus to vehicles sales and the service department.

Collision centers are back, for some.

Happily, our industry has rebounded in recent years. So, I’m surprised that dealers are still unwilling to look at their collision center as a profit center. Meanwhile, our publicly-held competition is investing heavily in collision repair, and venture capitalists are actively involved with some of the largest multi-location collision companies, gobbling up locations and market share.

The surviving independents are making a killing. I think the independents’ success is part necessity. After all, if an independent collision shop can’t evolve fast enough, it will go out of business.

Dealerships, though, seem much more reluctant. This is partly because ownership often views the collision center as a loss-leader – to them, it’s a customer retention tool rather than a true profit center. Plus, I’ve seen many dealership collision centers continue to operate even when they are unprofitable.  They just struggle along while ownership focuses on vehicle sales; owners just hope the collision center doesn’t lose too much money! That’s not a philosophy that evokes much confidence.

Preparing for Collision Competition

So how do you – the individual dealer or small dealer group – compete against the mega-groups and the well-established independents? Like so many other dealership issues, I think the solution lies in three things: training, knowledge and support.

Technical excellence ≠ management skill

A common theme I encounter while working with collision managers is that many were promoted with very little management experience. Most start in the industry as a helper, moving their way in the ranks to become a body tech or painter and then an estimator. Once the prior manager quits or is released, they find themselves the manager.

Now that they’re expected to “make the department perform,” they have no clue how make that happen. Most are remarkable technicians or estimators – that’s why they were promoted – but few are prepared for their new responsibilities, such as managing a team, forecasting and expense control.  These great workers are left hanging: They don’t know how the numbers work, how to get people to produce or how to grow a business.

Sink or swim leads to drowning

All this adds up to a very frustrating experience. Lacking experience and knowledge, a motivated manager will work harder – very hard – but not necessarily smarter. They race faster and faster, trying to perform, and then – the next thing you know – that star employee is totally burned out.

And what does burn-out lead to? Quitting. I’m floored at the number of times dealers end up losing a quality long-term employee, often without gaining a thing along the way!

The craziest part is that much of this can be avoided! The sink or swim mentality accomplishes nothing. Stop putting people into positions with no training or support. Instead, equip your manager with the training and knowledge they need to lead a team and grow the business. Teach them how to obtain profitability and unlock the potential of their department.

Invest in people for a return on investment

With more vehicles on the road than ever before – and fewer shops to repair them – dealers’ now have an incredible opportunity.  It’s time to get serious about your collision center and make the collision department become what it should be … a profit center and valued part of your dealership.

Ready to take the next step for your collision center? Join NCM® Institute’s experts in learning the Principles of Collision Center Management. It’s the most effective way to turn your best tech or estimator into your best manager. Classes filling now. 

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Chris Kahrs

Don’t Lose Your Best: Employee Retention Starts Day One


I read something shocking the other day.

According to Forbes, the average annual raise an employee can expect is 3%. But our high inflation rate means that’s really about 1%.

But, if a top employee chooses to jump ship? They can expect anywhere from a 10 to 20% bump in salary. Sometimes as much as 50%.

FIFTY PERCENT? That’s a lot of money. No wonder employee turnover can be so bad!

Money is a motivator, but not the only one

What?! I know you’re thinking. I can’t afford to give a 20% raise each year, no matter how great an employee he is!

I get it. But the fact is that top talent is leaving every day and, unless you do something to stop it, you are likely to see your best people walk out the door.

Fortunately for us, people are motivated by more than money. The Pride Staff 2015 Employee Retention Survey reports that 17.5% of interview job seekers were looking for more money. But nearly as many – 16.2% – were looking to leave because they didn’t like the company culture or wanted more training! That’s means we have an opportunity to fix things.

Good retention starts Day One

When you have a great company culture, top talent will be willing to invest in you. I recommend that you establish your company culture early, starting with a solid onboarding process.

Here’s my 10-Step Onboarding Process:

  1. Before the first day, tell them who to ask for when they arrive. Ideally, have this be someone involved in the hiring process. A familiar face upon walking in the dealership is very welcoming!
  2. In that same conversation, tell them where to park so they aren’t embarrassed by being asked to move their vehicle on the first day.
  3. Email—or leave on their desk – their first month schedule. Include details about meetings and list a goal for each day.
  4. Prior to the new employee’s start date, tell the entire organization to expect them and encourage them to say hello.
  5. Clean and prep their work station before their arrival. Do they have all of the tools necessary? Does everything work? Make sure everything is in order.
  6. Have their paperwork packet ready when they arrive. Most, if not all, new hires know there is important paperwork to sign. This shows the new hire you’re prepared and value their time.
  7. Prepare all needed log-ins and passwords and set up their voicemail. (This helps you, too. Remember: This new employee has told several people where he is working and he/she may get calls on day #1. No voicemail = potential lost opportunities!)
  8. Give them a thorough tour of the facility when they arrive, and introduce them to the staff.
  9. Clarify the schedule for the first week and month. Review the expectations of the employee in their new role.
  10. Explain your organization’s goals and future outlook and how he or she fits into them.

Retention matters … every single day

You can’t forget about retention once that new employee is settled in. If anything, it’s more important than ever!

Show your staff that you’re willing to invest in them with training and career development. Not only will it improve their performance, but it will give them another reason to stay with your business.

My last recommendation is to keep your eye on the ever-changing market. Make sure you stay up-to-date with current employment and benefit trends, so you attract – and retain – the best staff for your business. Review your procedures, such as the onboarding process I outline above, with your management and make sure they are following it.

Remember: The better your company culture, the more likely you are to keep your best talent!

Have a great retention tool at your business? Comment below and share your expertise.

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Laura Madison

Using Social Media to Eliminate the Car Salesman Stereotype


Let’s face it; the public’s perception of a car salesperson is not pretty. Salespeople are regarded as sleazy, quick-talking, plaid-loving “professionals.” The negative stereotype was formed in a time when salespeople held all the cards—a time when information regarding pricing, the car-buying process, and the product was largely unavailable to consumers. Today, the consumer has the ability to research all aspects of car shopping and the industry is becoming increasingly transparent. The behavior that earned automotive salespeople this reputation has almost vanished, but this negative perception still plagues the automotive industry.

So let’s transform it.

Many dealerships today are staffed by millennials, veterans, automotive enthusiasts and people who are genuinely as interested in helping their buyer make a good decision as they are in making a paycheck. Car salespeople today are genuine, likable people. Our best way to communicate this to the public is by using social media to introduce the real people of our business. We can do this by allowing salespeople to contribute to dealership social media channels. Allowing salespeople to participate in the online movement is both empowering and innovative. You can encourage salespeople to do simple things that show they are helpful, caring resources rather than hungry, front-door vultures. For example, a salesperson could film a quick video off a smartphone of new features on a redesigned model or write up a quick social post that includes tips for the best test drive.

If salespeople can begin to brand themselves, provide guidance and context, and show that they are caring people, they have the opportunity to build themselves apart from the shadow of this terrible stereotype.

Beyond the Salesperson

Social media is a portal that allows us to revise negative perceptions even beyond those of salespeople’s. Customers are all online gathering information and doing research before they ever walk into a showroom; why can’t dealerships begin to be the ones to provide this valuable information to their local car buyers?

Dealerships could use Facebook pages to provide answers to frequently asked questions or highlight product comparisons, instead of using them (often unsuccessfully) as an advertising platform. Providing value and sharing information about the product allows people to make real connections to the dealership and the cool things they sell.

These are only a few examples of how dealers can use social media to make people more comfortable walking into the showroom. Social platforms provide an incredible avenue of communication that could transform the way the public perceives the automotive industry. The tools and the audience are online; it’s just a matter if the automotive world is finally going to make a move and take action.

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Jody DeVere

Three Quick Tips for Marketing to Women

In automobile center

One of the basics of marketing to women is that marketing (in the traditional sense), is just one step. You can create a fantastic advertisement or marketing promotion, even incorporate compelling features based on feedback and input from women, but if the experience at the dealership is uncomfortable or stressful, you won’t get the sale.

In their book, Waiting For Your Cat to Bark?, co-authors Brian & Jeffrey Eisenberg help marketers understand how to deal with the reality that the customer is in control. They suggest becoming your own customer and going through your own dealership buy process. Pretend that you’re a prospect just at the beginning of a purchase, searching for information. What search terms would you use? What stores would you visit? What questions would you ask the salesperson? Then, how does your business line up to this?

Dealerships that want to succeed must take every interaction into account and understand that for today’s consumers, it’s action not words that motivate. (Especially when it comes to women, who make 80% of the purchasing decisions.)

“The experience becomes the brand,” say the authors, “…it’s about experience… theirs”, and I couldn’t agree more.

According to the authors, like cats, today’s consumers are independent, unpredictable and finicky but many marketers are still approaching them as if, like Pavlov’s dog, all they have to do is create a compelling message. However delivering an outstanding experience for women is the best marketing of all.

Three Quick Tips:

1. Be Patient:

Women consider how a vehicle is going to fit into their long-term lifestyle before making a purchase. They’re a lot more cautious and careful than men are and usually take longer to make their decision. They’re going to buy a car they’re happy with for years. Refrain from high pressure closing tactics, be patient and don’t rush her process.

2. Listen:

Women buyers like to tell “their whole story” to sales people. Having outstanding listening skills help build a relationship, understand her lifestyle car buying needs and create a friendly, enjoyable experience.

3. Trust:

Women have become nearly every family’s chief purchasing officer. She looks for a salesperson who wants to be a part of her buying process, who shares her values regarding honesty, respect and trust.

According to a study called “Elevated Expectations: The New Female Value Equation,” 97 percent of women expect good customer service everywhere they shop. Eighty-three percent buy more when in a store with good customer service. The study also found that 89 percent of women choose one store over another, with similar merchandise and prices, if it offers better customer service.

When women have bad customer service experiences, 80 percent say they will not go back to that store, even if it was just one bad encounter. And 94 percent say they will tell other people about the bad experience. Women expect “Nordstrom-quality” service everywhere they shop, but they rarely find it.

There is great opportunity for dealerships to raise the bar by focusing on how to improve the experience of women customers and increase their dealership’s positive “brand image,” grow market-share and increase positive word-of-mouth, both on and offline.

Jody DeVere is the CEO of and a new guest contributor to the Up To Speed blog.  Through, Jody provides automotive education to women consumers and certification and training for automotive retailers on how to attract, sell, retain and market to women. She is also a featured subject matter expert on NCM OnDemand, NCM Associates’ new virtual training and communications platform.

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Robin Cunningham

What Does a General Sales Manager Do Really?


At the NCM Institute we conduct our Principles of General Sales Management I & II classes about every other month. They are often two of our most attended classes, so there’s lots of energy, and we are working with Variable Managers who have had some years of success in order to have claimed the title of General Sales Manager.

Often, even before introductions, I will ask the class something like: So exactly what is a General Sales Manager? Is it someone who has more experience than the other Sales Managers? Or someone who can cover for the Used Vehicle Manager or F&I Manager on their days off?

We get a lot of looks like: Is this a trick question? Or is there something else we are missing? It for sure depends on the size of the store. In some bigger stores the GSM might very well have had success at the New Vehicle, Used Vehicle, and F&I Management levels; and he or she is in a position to oversee the other Variable Managers. In smaller or medium sized stores the GSM may not have had that same breadth of experience. Or in the case of Used Vehicle Department, they may not have had much experience managing the used vehicle challenges in the Internet era, where everything has changed.

We find there is very little commonality in what a General Sales Manager is and exactly what they are responsible for. So we tell our students that the way the NCM Institute approaches this is that they are the “General Managers of Variable Operations.” That sure sounds like a cool title to have, but what exactly does that mean?

As with every class we teach we start with the discussion of Accountability Management & Leadership. This takes most of the first morning, especially since we are now talking about individuals who will be leading, coaching and managing every aspect of Variable Operations.

Within Accountability Management we refer to the Six Primary Elements of Accountability, and they are:

  1. Planning your work and working your plan
  2. Clearly defining and communicating your expectations
  3. Inspecting what you expect
  4. Measuring what you intend to manage
  5. Rewarding positive results and responding to negative results
  6. Developing and implementing a systemic structure

By this point in time, most of these managers realize they are in for a very different experience than they had anticipated. We then dive into their numbers using the NCM 20 Group Composite and Profit Trend Analysis tools. We start looking at New and Used Vehicle retail unit sales, year over year; per vehicle retail gross, year over year; total New and Used gross, year over year; net F&I income, year over year.  Then we look at several expense categories like: Advertising, Selling Expenses, and Employment Expenses, year over year. How are we trending? Do we know? What are our strategies, based on the knowledge we do have?

After the Financial Management discussion (which we often call “A Punch in the Nose”), we circle back to a full discussion of the second Element of Accountability Management: Clearly Defining and Communicating Your Expectations.

We start this discussion by asking if any of the students’ dealerships has a current organizational chart in use; written job descriptions and objectives; and are any of the processes they use, like the Road to a Sale, in writing? We get them to reflect on just what tools they really have in place to lead, coach, train and manage with. By this point they realize we have huge upside opportunity for improvement and we still haven’t actually begun to talk about what they thought they came to us to learn.

Then we move into the discussion of Opportunity Management and Prospecting. We begin breaking down the sources of all of the Opportunities to do Business. We agree there are four sources:

  1. The walk-in customer
  2. The in-bound phone call
  3. The in-bound internet lead
  4. The salesperson self-generated lead (be-backs, repeat/referral, circle of influence, etc.)

We show them how each category has its own closing ratio and per vehicle income opportunity. We spend a couple of hours showing them how they can help their people focus more on the self-generated leads, which close at 50%, so they can start weaning them off the dealership-generated leads that most salespeople (and sale managers) count on for most of their sales.

Then we get into the discussion of Recruiting and Orientation which elicits some really great conversation. Then we spend a lot of time discussing Training Disciplines and Techniques. Because most of the managers in our GSM class have had quite a bit of experience, the level of interactive discussion amongst themselves, is the most we have in any of our NCM Institute classes. And we know from the evaluations from our students that they value the content of these in-class discussions as much as everything we bring to their attention.

We then wrap up the class with the (much-needed by this point) discussion of Time Management. They are wondering how in the world they are going to be able to fit all of these new, critically important ideas and processes into their daily, weekly and monthly schedules. They come away knowing it’s all very doable, if they make the commitment to begin mastering Accountability Management. They have written a number of Guarantee of Action Plans that will be sent back to their GM or Dealer to begin the buy-in and then implementation process. They can clearly see how they and all the other Variable Operations team mates they lead, can become increasingly more productive and profitable.


Click here for information on all NCM Institute classes.

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Rebecca Chernek

Is Your Menu Working You or Are You Working The Menu?

Car key, credit card on a signed sales contract

AutoNation USA, the #1 publicly-owned automotive retailer, opened its doors as a mega “one pricing” pre-owned operation in 1997. It built elaborate showrooms; county records show one was 218,000 square feet. The showrooms included a café, a playroom and an aftermarket display platform.

Kiosks with computers were placed throughout the store enabling consumers to efficiently check out in-stock inventory or to submit a loan application. Customers were greeted at these kiosks by F&I personnel, which meant that all deliveries were made out on the floor. The finance office was used strictly for printing documents.

Most importantly, AutoNation was the principal leader of full disclosure selling in finance—a transparent, upfront sales philosophy. Using this philosophy as its key initiative has served them well. In a recent 2013 article posted by Bernie Woodall in Reuters, AutoNation’s earnings beat Wall Street estimates. Michael Jackson reported that he expects “U.S. industry new vehicles sales to reach the mid-15 million range in 2013, which would mark a rise of about 7 percent from last year and the highest sales total since 2007.” Its F&I profits also reached an all-time record, up 31 percent from the fourth quarter of 2011. F&I Showroom’s February 21, 2013, issue reported that AutoNation’s total revenue reached $4.2 billion, up 13% since last year.

Those are impressive numbers.

You’re thinking that managing $1,300 per car isn’t always achievable, but it might be, if you shared their zero tolerance for deceptive practices. If your customers walk away with any hint of dishonesty, you can almost assure yourself of a chargeback. Your “best practices” application begins with the menu presentation. Where do you stand? Do you disclose every single buying term before presentation of products? Do you try to work the system – and fail to realize that full disclosure selling is the means to significant sales achievement?

Since implementing menu selling for the AutoNation mega dealer in 1997, our division has presented thousands of menus on the showroom floor. The F&I PVR increased significantly year after year. We used paper menus. Unfortunately, F&I managers today are using a variety of online menu versions that inspire “rush” service—service that might not present every part of the menu or full disclosure 100% of the time. The menus are super-streamlined and programmed from one software provider to another; they make a list of claims about your potential to significantly increase your F&I profits, if you use their software. You might. For a time. Especially if you don’t fully understand the reason behind full disclosure selling and why, if the terms are removed from the menu verbiage in the software menu version, the dealer is open to potential law suits.

Inspect the menu version you’re currently using. Does it itemize buying numbers, APR, terms or base payment of the vehicle purchase? Is every product listed with full discloser? Does your state (like California) require the discloser of the base payment prior to presentation of products? Do you take whatever time is necessary with every customer to clearly disclose what they’re paying for the vehicle and all terms?

Tom Hudson, in F&I Magazine, said, “So, even if federal law and the law of your state do not require the disclosure of an optional products menu, would I advise a dealer to use one and to disclose a ‘base payment’ as part of the menu presentation? Without a second thought.”

Menu selling isn’t a time-wasting chore.
Think KISS—Keep it Simple Silly.

To be successful with menu selling, be consistent. Establish a well-rehearsed system that is interactive with your customer. Know the terms; define them with clarity. Don’t pack an endless number of products on the menu. Stick to basics. A menu is not a scroll. Itemize all products and offer two payment options. Be upfront and customer friendly. Offer all the products 100% of the time, but stick to the point. Don’t ramble. Throw out the sales jargon, pitches and props, Get rid of the aftermarket sales kits on the walls or your desk. Act like the professional you are, but treat your customer with the same courtesy you would your neighbor. Don’t think of your menu presentation as a gimmick.

If your online menu or next best menu presentation takes longer than five minutes, consider utilizing a printed menu that keeps you on track. Remember, less is more! A delivery should take no more than 30 minutes. Most customers would rather work with an F&I manager who presents a paper menu effectively than an automated menu that promises a quick fix! Automated online presentation technology might represent the paperless, so-called “green” future, but it won’t take the place of hands-on customer service that comes with the presentation of menu products on paper that can be held.

Follow AutoNation’s lead. It has demonstrated convincingly that full disclosure selling is the driver behind their success. They have mastered the F&I office, and their ethical standard of business practices prevails. If you aren’t achieving over $1,000 PVR, ask yourself: Is your menu working you or are you working the menu?

Becky Chernek is a regular contributor to the Up To Speed blog on F&I best practices. To learn more about Chernek Consulting or to find out if your desking process supports full disclosure menu selling, visit, email, or call 404-276-4026.


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Richard Head

Is Story Time Causing Your Dealership Turnover? FIRO and MBWA Can Stop It

open boo

One of the biggest expenses dealerships face each year is turnover. Not only does finding a new employee take a lot of time and money, but you then have to reinvest in proper training to get that new person up to speed.

I’ve found that dealerships – like many other complex work environments – are negatively impacted by assumptions, something I like to call “story time.” Before I go into the details of how story time ruins your employer-employee relationships and leads to turnover, let’s take a second to review what motivates people in the first place.

Motivation in action: FIRO

Developed by observing well-oiled, capable teams working in high-stress situations, the Fundamental Interpersonal Relationship Orientation (FIRO) approach boils people’s fundamental behavior comes down to three desires:

Inclusion.  Everyone expresses or wants contact with others—to be around others and work with others.

Control. Everyone expresses or wants influence over things and people.

Openness. Everyone expresses or wants to be known, seen, appreciated—a curiosity about others and a willingness to be seen ourselves.

This chart show how each area relates to the others:

Blog graphic

For managers who typically can’t create a team from scratch based on compatibility, we have to focus on the thing we can change. Will Schutz – the psychologist who invented the FIRO method – says that creating an environment that encourages openness is the best method. And openness is what story time is all about.

It’s story time

First, let’s address openness. I’m not talking about some touchy-feely “new-age” thing. Instead, “openness” means a willingness to consider other interpretations of behavior.

Whenever something happens to us, we almost always make up a story about it. Unfortunately, most of the time we don’t make the effort to check out our made-up story. We simply create this fantasy world about what’s going on. As time goes on, those stories get hairier and stranger.

Just think about the last time you were baffled by something your boss said. You probably found yourself thinking, “I bet they’re irritated with me,” or “They probably think that ….” In reality, you just don’t know what’s happening with your boss. But your brain doesn’t like uncertainty, so it’s compelled to make up a story that gives you some understanding. And our people do the same about us!

Story time has a huge impact on businesses. Dealerships (and all businesses) are composed of multiple, competing stories about what’s going on and why—stories that are rarely discussed openly and almost never examined in a way that could prove or disprove the stories. Left to run unchecked, story time can give your best performers misinformation, and lead them to walk out the door.

Putting story time to bed.

In work relationships, we have two choices:

  • Let people make up stories about what is going on with us
  • Tell people what’s actually going on, so that they stop making up their own stories

As a leader, you set the tone.

When you stay holed up in your office, I can guarantee that your staff is making up stories trying to understand your decisions.

“Management By Wandering Around” (MBWA) is a great way to stop story time in its tracks. And, what better way to interact with the dealership?!

When I get out into the departments, I share with my staff what’s going on in the department, what’s keeping me up at night … and, critically important, what my hopes and dreams are for the dealership and the department. As an added bonus, the employees relax a bit and tell me things they might not in more formal situations. Everybody wins! And everyone stops inventing stories.

Give it a try in your dealerships. Manage by “wandering around” and find out what’s really going on. Stop the stories and deal with facts! What do you have to lose?

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Steve Hall

Three Hours Lost: Your Top 10 Service Time Wasters


When we ask service managers how important technician efficiency is to profitability, they most often say that “it goes hand-in-hand” or “if they aren’t efficient, you won’t make money.” While I agree with this, let’s look at it another way: time.

Here are the top 10 time wasters I’ve seen in service departments.

  1. Talking (non-productive talk)
  2. Waiting for the first job of the day
  3. Getting authorizations from customers
  4. Waiting on advisors
  5. Waiting in line in Parts
  6. Looking for or waiting on special tools
  7. Walking to Parts and back
  8. Phone calls, texts, e-mails and using tablets or laptops
  9. Smoking
  10. Arriving late or leaving early

How many hours lost?

I ask managers to make this list during each of my training sessions at the NCM Institute, and then I have them to assign time lost by activity. Sure, there are minor variations each class. But what doesn’t change is that we routinely come up with 2½ to 3 hours spent each day, not working on vehicles!

I know it is unreasonable to think that every minute can be spent on productive work, but how many of these lost minutes can we pick up?

Getting time—and money—back.

Let’s look at an example: We will figure an average shop of 12 technicians and gain just 15 minutes a day in actual production. We will use an $85.00 an hour effective labor rate and a gross profit percentage of 75%.

The numbers would look like this:

12 technicians x 15 minutes a day = 180 minutes of production gained a day (3 hours a day gained)

3 hours gained x $85.00 ELR = $255.00 in labor sales gained per day

$255.00 x 75% gross profit (labor) = $191.25 labor gross gained per day

$191.25 x 300 business days per year = $57,375 additional labor gross profit per year!

Add in corresponding parts gross generated from the labor sales, and you could earn more than $95,000 in additional fixed gross profit per year (and that is figured at 100% efficient). If they are 125%, the numbers are even larger! All of this from just gaining 15 productive minutes per day from each of your technicians.

Take the time to evaluate all of your technicians’ daily time wasters. Find ways to reduce the wasted time. Ask them for ideas and creative solutions. (And, once they know you are paying attention, some of the time wasters may just disappear.)

Go ahead, do the math your own numbers and find your potential: you’ll be amazed!


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Steve Hall

Service Managers: How Well Do You Communicate With Sales?


Processes…even the best processes don’t work if employees don’t understand them. It’s Monday morning in the service department. The day is off and running and a flurry of customer activity abounds.  Things are busy, but running smoothly. Just the way you (the service manager) designed it.

Now it’s about 8:45 and the sales department is just leaving their Monday morning sales meeting. A fairly new salesperson comes into service, walks up to you (the service manager) and says, “I sold a car Saturday, stock number Z1576A. We spot delivered it, but we need to have a spoiler installed that’s not in stock. Can you take care of it for me?”

You look at him, as if he’s a nobody and snipe back, “Where’s the ‘We-Owe?’ Did you already order it, or not? When is the customer scheduled to come back? Do you even know the color code for the spoiler or do you want me to just guess?” The new salesman looks puzzled and slightly embarrassed.

He thought his job was to sell cars, which he did. He thought the service department was supposed to help him when he needed it. Maybe he misunderstood the relationship. He thinks, “They just seem so nice to customers and so grumpy to the sales department. Why?”

What the new salesperson was not privy to was the sordid history, and possibly the proper and much-improved process. The service department knows they can’t order or install the spoiler without proper documentation and basic information from the sales department. That happened before recently, and they got the speech, “Don’t EVER do anything on a vehicle without receiving a sales manager-signed We-Owe.” They also know the salesperson doesn’t get a CSI survey to submit on the service department, so I (the service manager) can “teach him a lesson” on how to interact with service without the repercussions of a negative CSI survey.

Unfortunately, this type of scenario happens way too often. With turnover in the sales department, often times the sales managers are stretched just to train the salespeople on product knowledge and the vehicle sales process…and they never get to train the other necessary dealership processes.

This is where the service managers need to take charge.

We need to realize that if we want the sales department to be a “bell cow” to our customers on how great we are, we need to start treating them great. One way that I have found that improves this relationship quickly, along with strengthening processes, is to attend sales meetings on a regular basis.

When you (the service manager) attend a sales meeting, several positive things happen. Here are a few:

  • You get to know the people, and they get to know you. You are on the same team and this relationship helps everyone. You get to learn who people are. Now they have a name, not just the new salesperson who “knows nothing and wants everything.”
  • You get to answer their questions. Open communication between sales and service…now that’s REALLY a good thing!
  • You can train on a process or two – departmental or inter-departmental – every time you attend. Short, precise instructions to make the processes flow better. Yes, as you have turnover, you will have to re-train the process, but if you don’t, who will? Also, refresher topics can even help long-term people.
  • You will get a better understanding of what they have to deal with and you may become slightly more open to training someone…not just “barking” at them.
  • You may even learn a few sales training tips to help make your advisors more effective.

Whether you attend the whole meeting or just do your part and exit, it will be time well spent with one of your most important clients. The goodwill from this effort pays large dividends. Become a leader, a mentor, and have success the old fashion way: one person at a time.

At the NCM Institute, we believe every department should better understand the dealership as a whole. With that in mind, some of our clients purchase an annual training subscription and cross-train managers in different departments. Sales managers learn about service; service managers learn about used vehicles; parts managers learn about service; and so on. This greatly helps them understand the daily struggles each department has and helps them learn the importance of working together as one unit. Check into a more affordable way to help make your team stronger and ask about our annual NCMi training subscription and bundling options.


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