Maximize Your Service Growth With 5 Simple Rules

Don Reed | DealerPro Training | CEO | [email protected]

Maximize Your Service Growth With

5 Simple Rules

Presented by: Don Reed, CEO, DealerPro Training


Question?

Is it possible to increase traffic and improve owner retention with an average CSI rating, while lowering sales and reducing Net Profits?

In other words, can a successful marketing campaign result in your dealership losing money?


Consider the Following Average monthly customer pay RO’s = 1,000 @ 1.5 HPRO

Marketing Campaign Produces 10% increase in RO’s 100 Additional Incoming Service Calls 100 Additional Service Appointments 100 Additional Maintenance Menu Presentations 100 Additional RO’s to Dispatch 100 Additional Vehicles to Inspect 150 Additional Technician Hours 100 Additional Vehicles Requiring Parts 100 Additional Vehicles to Park 100 Additional Outgoing Phone Calls for Advisors 100 Additional Customers to Cashier 100 Additional Active Deliveries 100 Additional Next Appointments to Schedule


Marketing Case StudyStart Up of New Quick Lube Center

Midwest Dealer -2012

LaborSales Gross Margin

PartsSales Gross Margin

Sales RO

# CPRO's ELR HPRO

Total Gross

7 Months-11 $924,640 $707,888 77% $763,474 $307,215 40% $235 7,265 82.05 1.6 $1,015,103

7 Months-12 $802,587 $578,481 72% $733,768 $270,791 37% $193 8,001 80.34 1.3 $849,272

Variance -$122,053 -$129,407 -4 -$29,706 -$36,424 -3 -$42 736 -1.71 -0.3 -$165,831

Percentage -13% -18% -5% -4% -12% -8% -18% 10% -2% -19% -16%

4

736 New Customers Produced a Net Loss of $165,831

How Can You Prevent This From Happening

in Your Dealership?


Follow These 5 Simple Rules

Rule #1 – Define Your Marketing Plan Goals

Rule #2 – Evaluate Your Capacity for Growth

Rule #3 – Train Your Service Team

Rule #4 – Measure Performance Daily

Rule #5 – Prepare a Profit Improvement Plan


Rule #1: Define Your Marketing Goals

Increase Customer Pay Traffic

Improve Customer Retention

Raise CSI

Increase Sales

Build Net Profits


Rule #2- Evaluate Your Capacity for Growth

Shop Productivity (Total Hours Billed Divided by Total Hours Worked - Benchmark @ 120%) Current Shop Productivity % ____ Goal for Shop Productivity % ____

Number of Technicians Current Number _____ Need to Hire _____ Skill Level _____

Number of Service Bays _____ Number of Lifts _____ Need to Add _____


Rule #2- Evaluate Your Capacity for Growth

Customer Driven Processes Parking Spaces Service Reception

• Number of Service Advisors (12–15 customers per day) • 15 Minutes Per Customer• Service Greeters

Cashier Process• Back-up Plan• Service Advisor?

Waiting Room Capacity


Rule #3-Train Your Service Team

3 Customer Touch Points

1.Phone Calls

2.Walk-ins

3.Website


Shocking Facts About Service Writers

81% of all Customer Pay Labor Comes From the Phones

86% Try to Diagnose the Customer’s Concern on the Phone

81% Quote Mechanical Repair Prices Before They Know What’s Really Wrong

95% Quote Higher Prices Than Independent Shops, Allowing the Customer to Shop other Places

57% Do Not Offer the Customer an Appointment

The Aftermarket Does Just the Opposite


Rule #3 – Train Your Staff for Growth

1. Phone Calls – Incoming

• Appointment Coordinators/Call Center NOT Advisors = More Appointments!

• Do NOT Quote Prices for Mechanical Repairs over the phone

• Avoid Diagnosing Over the Phone

• Sell Appointments at 15 Minute Intervals



2. Walk-ins – Drop offs & Waiters

• Never Say NO

• Can Do Versus Can’t Do

• Allow 20% of Schedule for Walk-ins & Up-Sells

• Must Have Capacity to Sell



3. Website

• Interactive Online Maintenance Menus

• Current Service Specials

• Build Value in Your Dealership Services

• Online Appointment Scheduling


You Can’tYou Can’t

ManageManage

What you Don’t What you Don’t MeasureMeasure


Rule #4 – Measure Performance Daily # Of Incoming Calls

# Of Appointments

Service Advisor Daily Performance Tracking

Performance Board for Advisors

Technician Daily Performance Tracking

Performance Board for Technicians

Track Sales Results by VIN #

Marketing ROI Profit Pro Forma


Rule #4 – Measure Performance Daily

# Of Incoming Calls Going Up – Going Down – Stagnant Record Phone Shops for Accountability

# of Appointments Schedule 15 Minutes Apart by Advisor Sell 80% of Capacity Per Day Follow-up on All No Shows to Reschedule


Rule #4 – Measure Performance DailyService Advisor Performance

Average # RO’s per day, per Advisor Customer Pay & Warranty Customers @ 12 – 15 Internal RO’s – What’s Your Policy?

Service Advisor Performance Metrics Margins - Labor @ 75% & Parts at 42 – 45% Sales Per RO Hours Per RO Month to Date Sales and Travel Rate CSI Trends Closing Ratio – Upsells vs CPRO’s


Rule #4 – Measure Performance DailyTechnician Performance

Productivity

# of Hours Produced vs # of Hours Worked

# of Multi-Point Inspections Completed

# of Additional Service Requests

Total Gross Profit Produced MTD

# of RO’s – Customer Pay, Warranty & Internal


Marketing ROI Without Training

NOTES: Assume CRM process produces a 10% increase in RO count for $2500 per month

Plan A: RO count increases 10% to 550---HPRO declines by .2 produces ROI of -270%

Current

# CPRO's 500HPRO 1.3Increase/DecreaseELR $85 CP Labor Sales $55,250 Margin 75%CP Labor Gross $41,438 P/L Ratio 90%CP Parts Sales $49,725 Margin 40%CP Parts Gross $19,890 Total CP Gross $61,328Cost of Marketing Per MonthVariable Gross Profit $61,327Increase/Decrease n/aAnnualized 12 months

Plan A

5501.1-0.2$85

$51,425 75%

$38,569 90%

$46,283 40%

$18,513 $57,082$2,500 $54,582-$6,745

-$80,943


Marketing ROI With Training

NOTES: Assume CRM process produces a 10% increase in RO count for $2500 per month

Plan A: RO count increases 10% to 550---HPRO declines by .2 produces ROI of -270%

Plan B: RO count increases 10% to 550---HPRO remains the same produces ROI of + 145%

Current

# CPRO's 500HPRO 1.3Increase/DecreaseELR $85 CP Labor Sales $55,250 Margin 75%CP Labor Gross $41,438 P/L Ratio 90%CP Parts Sales $49,725 Margin 40%CP Parts Gross $19,890 Total CP Gross $61,328Cost of Marketing Per MonthVariable Gross Profit $61,327Increase/Decrease n/aAnnualized 12 months

Plan A

5501.1-0.2$85

$51,425 75%

$38,569 90%

$46,283 40%

$18,513 $57,082$2,500 $54,582-$6,745

-$80,943

Plan B

5501.3

$85

$60,775 75%

$45,581 90%

$54,698 40%

$21,879 $67,460 $2,500 $64,960$3,633

$43,599


Marketing ROI With Training & Profit Improvement Plan

NOTES: Assume CRM process produces a 10% increase in RO count for $2500 per monthPlan A: RO count increases 10% to 550---HPRO declines by .2 produces ROI of -270%

Plan B: RO count increases 10% to 550---HPRO remains the same produces ROI of + 145%Plan C: RO count increases by 10% to 550--HPRO increases by .3 w/training, produces ROI of + 768%

Current

# CPRO's 500HPRO 1.3Increase/DecreaseELR $85 CP Labor Sales $55,250 Margin 75%CP Labor Gross $41,438 P/L Ratio 90%CP Parts Sales $49,725 Margin 40%CP Parts Gross $19,890 Total CP Gross $61,328Cost of Marketing Per MonthVariable Gross Profit Per Month $61,327Increase/Decrease Per Month n/aAnnualized Profit Improvement

Plan A

5501.1-0.2$85

$51,425 75%

$38,569 90%

$46,283 40%

$18,513 $57,082$2,500 $54,582-$6,745

-$80,943

Plan B

5501.3

$85

$60,775 75%

$45,581 90%

$54,698 40%

$21,879 $67,460 $2,500 $64,960$3,633

$43,599

Plan C

5501.60.3

$85 $74,800

75%$56,100

90%$67,320

40%$26,928 $83,028 $2,500 $80,528$19,201

$230,412


Rule # 5 Profit Improvement Plan

DefineDefine Your GoalsYour Goals

EvaluateEvaluate Your Capacity Your Capacity

TrainTrain Your Personnel Your Personnel

MeasureMeasure Performance Daily Performance Daily

TrackTrack Marketing ROI Marketing ROI

Contact Info

Full Name:

Company:

Job Title :

Email:

Don Reed

DealerPro Training

CEO

[email protected]

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Maximize Your Service Growth With 5 Simple Rules