Replies to This Discussion

Permalink Reply by Craig Lockerd on September 29, 2010 at 2:30pm

Man Tyler, that is an eye opner...guess that falls directly under the heading of "If we always do what we've always done,we'll always get what we always got!"

NANCY SIMMONS said:

All I can say to that, Tyler is "Wow"! You obviously know where I was going with that! As a Comtroller who really overlooks all the daily processes of the operations of the dealership, that has always drove me crazy. Boy are dealers missing out when they don't see the need for mirroring a sales -like structure to the service department both in managment tiers and sales steps and processes.

In the situation you described here in your post, by the time this poor service manager has handled all the mundane tasks at the end of a long 10 hour day, he looks at his appointment schedule with the attitude of "Oh, here comes another day.!".. rather than enthusiastically preparing for meeting those appointments as opportunities, by reviewing their individual histories, looking for past recommended services, checking for campaigns and recalls, and preparing a presentation for selling them maintenance... When is this illogical nonsense going to come to an end? This industry needs change...change from the daily rituals drilled into our mindsets stemming simply from the repetitive processes which lead us to believe that is the way it is supposed to be! Step away from the operation and take an omnicient view at your processes as if you were a consultant evaluating for the first time. If the current way you are doing things are not 100% effective, call an expert, revamp, and recapture those missed opportunities!

Thanks so much for the post Tyler! I am honored to have a expert like you comment on my discussion! Come back again real soon!

Tyler Robbins said:

Nancy,

You pose a fantastic question, I am extracing just a portion of it -

"Has the dynamics of the retail operation of the dealership shifted to Dealer Principals & GMs focusing more deserved attention to the Fixed Operations side of the business"

In adding some thoughts to that portion alone, in my travels I have found that in most dealerships,:

The ratio of Sales/Desk Managers to Salespeople is 1:5
The ratio of F&I Managers to Salespeople is also 1:5
There is a GSM over all of these Managers and Salespeople
There is at least one person in the Office dedicated exclusively to post all deals and calculate commissions for payroll
Many dealerships employ some kind of Delivery coordinator
Many have added an Internet Department (a Manager and a few coordinators) to handle the incoming leads and set appointments for the Sales Staff

In a store with 20 Salespeople, that adds up to approximately 12 Personnel dedicated exclusively to supporting vehicle sales from a Management perspective, or 3 Management Roles for every 5 Salespeople (Ratio 3:5)

A store of this size is likely to have approximately 7 Service Advisors, 25 Technicians, 2 Porters, a Cashier and a Warranty Clerk and one Service Manager/Director.

Thats a ratio of 1:36

This Manager/Director is not only responsible for "managing the sale" in Service, but also doing the payroll calculations for every service employee (no one in the office dedicated to this task like the showroom has), he/she is responsible for chasing warranty receivables (an office task for the showroom), chasing a bad check (also an office task for the showroom), test driving problem vehicles, speaking with every customer who has a "concern", including every Salesperson who has a "spot delivery" at 5pm on a Friday or customer that just took delivery and needs their touch-up paint kit mailed to them, and lastly, but certainly not least, is the person that everyone in the dealership comes to when something in the dealership needs "repair".

Toilet in accounting backed up? Call the Service Manager!
One of the lights on the lot is out? Call the Service Manager!
Someone lost their key to the building? Call the Service Manager, she/he will coordinate getting the locks changed and new keys for everyone.
The Dealers' wifes' demo has flat tire? Dont call roadside assistance, dont send the lot-boy, call the Service Manager!

30 Years ago most dealerships had a Shop Foreman, who relieved the Service Manager from some of the above responsibilities, but during the recession of the early 90s, that role was scrapped in favor of a working Team Leader - no more Managerial help. Service Advisors make their own appointments, close their own repair orders - no managerial support here either.

If the Service Manager/Director was to actually ask for some Managerial support in the form of a genuine Assistant Manager, history and the present has proven - thats not going to happen!

So with all of that information presented I will now pose to everyone AGAIN - "Has the dynamic of retail operations shifted?"
Showroom Ratio 3:5 | Service Ratio 1:36

Unfortunately - I think the answer is not even remotely!

Permalink Reply by Tyler Robbins on September 29, 2010 at 8:24pm

Craig - I'll also ask this question - WHY....... Again WHY........ does the showroom need MORE Management today selling fewer vehicles than it used to need when we were selling more?



Craig Lockerd said:

Man Tyler, that is an eye opner...guess that falls directly under the heading of "If we always do what we've always done,we'll always get what we always got!"

NANCY SIMMONS said:

All I can say to that, Tyler is "Wow"! You obviously know where I was going with that! As a Comtroller who really overlooks all the daily processes of the operations of the dealership, that has always drove me crazy. Boy are dealers missing out when they don't see the need for mirroring a sales -like structure to the service department both in managment tiers and sales steps and processes.

In the situation you described here in your post, by the time this poor service manager has handled all the mundane tasks at the end of a long 10 hour day, he looks at his appointment schedule with the attitude of "Oh, here comes another day.!".. rather than enthusiastically preparing for meeting those appointments as opportunities, by reviewing their individual histories, looking for past recommended services, checking for campaigns and recalls, and preparing a presentation for selling them maintenance... When is this illogical nonsense going to come to an end? This industry needs change...change from the daily rituals drilled into our mindsets stemming simply from the repetitive processes which lead us to believe that is the way it is supposed to be! Step away from the operation and take an omnicient view at your processes as if you were a consultant evaluating for the first time. If the current way you are doing things are not 100% effective, call an expert, revamp, and recapture those missed opportunities!

Thanks so much for the post Tyler! I am honored to have a expert like you comment on my discussion! Come back again real soon!

Tyler Robbins said:

Nancy,

You pose a fantastic question, I am extracing just a portion of it -

"Has the dynamics of the retail operation of the dealership shifted to Dealer Principals & GMs focusing more deserved attention to the Fixed Operations side of the business"

In adding some thoughts to that portion alone, in my travels I have found that in most dealerships,:

The ratio of Sales/Desk Managers to Salespeople is 1:5
The ratio of F&I Managers to Salespeople is also 1:5
There is a GSM over all of these Managers and Salespeople
There is at least one person in the Office dedicated exclusively to post all deals and calculate commissions for payroll
Many dealerships employ some kind of Delivery coordinator
Many have added an Internet Department (a Manager and a few coordinators) to handle the incoming leads and set appointments for the Sales Staff

In a store with 20 Salespeople, that adds up to approximately 12 Personnel dedicated exclusively to supporting vehicle sales from a Management perspective, or 3 Management Roles for every 5 Salespeople (Ratio 3:5)

A store of this size is likely to have approximately 7 Service Advisors, 25 Technicians, 2 Porters, a Cashier and a Warranty Clerk and one Service Manager/Director.

Thats a ratio of 1:36

This Manager/Director is not only responsible for "managing the sale" in Service, but also doing the payroll calculations for every service employee (no one in the office dedicated to this task like the showroom has), he/she is responsible for chasing warranty receivables (an office task for the showroom), chasing a bad check (also an office task for the showroom), test driving problem vehicles, speaking with every customer who has a "concern", including every Salesperson who has a "spot delivery" at 5pm on a Friday or customer that just took delivery and needs their touch-up paint kit mailed to them, and lastly, but certainly not least, is the person that everyone in the dealership comes to when something in the dealership needs "repair".

Toilet in accounting backed up? Call the Service Manager!
One of the lights on the lot is out? Call the Service Manager!
Someone lost their key to the building? Call the Service Manager, she/he will coordinate getting the locks changed and new keys for everyone.
The Dealers' wifes' demo has flat tire? Dont call roadside assistance, dont send the lot-boy, call the Service Manager!

30 Years ago most dealerships had a Shop Foreman, who relieved the Service Manager from some of the above responsibilities, but during the recession of the early 90s, that role was scrapped in favor of a working Team Leader - no more Managerial help. Service Advisors make their own appointments, close their own repair orders - no managerial support here either.

If the Service Manager/Director was to actually ask for some Managerial support in the form of a genuine Assistant Manager, history and the present has proven - thats not going to happen!

So with all of that information presented I will now pose to everyone AGAIN - "Has the dynamic of retail operations shifted?"
Showroom Ratio 3:5 | Service Ratio 1:36

Unfortunately - I think the answer is not even remotely!

Permalink Reply by Tod Collins on July 21, 2011 at 10:20am

A recent study was done that showed that 96% of all owners come from the sales side, typically sales people that have moved from the floor to a GSM and eventually owner. Of the remaining 4%, half of those come from outside our industry. That leaves the remaining 2% that comes from fixed operations. Is it any wonder there is a bias toward the sale side?

Look at what we ask our advisors to do today because we have asked fixed operations run on some anemic level established by a 20 something group of statisticians that no retail organization would come close to surviving on. In most stores, advisor are responsible for greeting, phone clerk, booker, flagger, dispatcher, warranty specialist, file clerk and phsycologist. AND the 15-20 customers you see each day will require a walk around, explanation of all services and needs, a full active re-delivery and by the way, you will need to contact those customers at least twice per day or face reprimand and possible termination. And if, something goes wrong or if one of those customers gets a survey and they don't feel it's possible that anyone could possibly be 100% perfect, you will probably be threatened again with your job. Sarcastic? Yes, (I appologize) intentionally but how far from the truth am I? I bet several of the experts on this site could add 6 more things I have overlooked.

 

Compare that to a sales person working the floor. Rarely do we allow them anywhere near that level of responsibility. Do they evaluate the trade? Probably not. Do they approve the deal? Never. In fact, they run back and forth like a carrier pigeon to some mysterious place where the customer isn't sure what's being discussed. Only after the customer has said "no" and threatened to walk out do we find out who this magical person is at the "desk" and the dreaded "TO" designed to lengthen the customer stay at the dealership until they succumb. How about finance? Nope, separate department with its own set of rules and expectations. How about delivery of the vehicle? Maybe. Even that might be left to a delivery specialist who can talk inteligently about all the new fangled technology that everyone in service must know. How long did this whole transaction take? If it took service that long to do a complete overhaul of the drivetrain on a vehicle the customer would be in the service managers face in a heartbeat screaming BBB. Is it any wonder that most dealers have more customers on the property after the store is closed than during, fantasizing about the new car but more apprehensive about the process than a root canal? It's easier to buy a half a million dollar house than a 30k vehicle. More sarcasm.....I appologize again.

My point is that the variable side of our business IS going to change. It will be forced to by the public as they continue to be better armed walking into the dealership, squeeze profits to record low numbers,  and demand a better processes. It has too, but it is certainly going to go kicking and screaming.  

 

 

 

 

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