By Jaimi Blakely, Chris Collins Inc.
It’s no secret that when you buy a dealership, you want to buy low. What can be mysterious is how to scale all of your “businesses” (aka departments) at the same time. That can ensure that your new place on the block is seen as an asset to the community, and that your clients refer you to their friends and family, co-workers, and neighbors.
There’s no other industry in the world that runs 5-6 businesses under one rooftop. The dealership world is exciting, it’s a challenge, and ultimately, some departments get left behind. Which means that your customers will unleash their “unhappy” and smear your reputation across social media, your new asset will suffer and your profits will invariably cap low. #NoDepartmentLeftBehind
If you ask most dealers, they’ll tell you that they have a Launch Plan: They’re going to come in with a bang! The sales team is going to be trained and primed to sell, sell, sell! Every customer within a 5-25 mile radius – depending upon whether you’re rural, urban or suburban – is going to know you’re the new kid on the block and oh yeah, you’re willing to make a deal – because you’re going to promote, promote, promote that fact!
Here’s what’s going to happen: Your ad buys will be high, your car sales will be high, your sales team will feel high! But, if you’re like most dealers, when it comes to Fixed Ops, other than employing a great service manager and the best team of advisors and techs, you’re going to hope (and maybe pray) that they do a good job – but that’s not a system!
From Idaho to Illinois I have had dealers and GM’s laugh in my face when I say to them Chris Collins Inc. can double the profitability in their service department within 90 days. That’s what a system does: It provides a reliable structure for success to occur without variable.
In order to ensure the profitability and long term success of your new dealership, you must have a system in your new fixed ops department that provides a World Class Customer Experience to your clients and establishes your service manager as the leader within a culture of constant improvement. Just imagine it for a moment: Your Fixed Ops Dept. is purring, humming, your Advisors are continually improving, the social media channels are filled with happy, happy reviews, your profits are soaring and predictable. It’s not a Unicorn. I see it happen every day.
As Einstein said, “Insanity is doing the same thing over and over again and expecting different results.”
For most of us, Fixed Absorption has been a struggle, a puzzle, and a wild card. Yet, with a system your fixed ops department becomes a reliable revenue generator, consistently turning out higher profits that you can count on month after month, year over year, whether you’re going through a recall or the U.S. undergoing a market crisis.
The key to profitability is your Effective Labor Rate. You want to nurture that like it’s your favorite son going to Harvard. ELR isn’t just about adjusting your rates, it is about a consistently reliable system that will reward your advisors for building an ever larger book of trusting clients, a system that gives your service manager the time to scale your operations with specific action steps and processes. This is no small feat, especially when we all admit the dirty truth: In our industry, we have done a terrible job of training service personnel. In fact, we expect them to perform without providing the tools for them to improve and succeed on a daily basis. Imagine your son trying to get into Harvard like that!
Here’s what we recommend: You need an effective ELR strategy that includes smart pricing, an effective presentation and a training system that provides support for both. Combine that with accountability and you have the beginning of a system.
When you provide your service team with a culture of constant improvement and give your clients a World Class Customer Experience, it follows that you’ll double your profitability and retention, and increase your CSI. You need a System for your drive. You need to protect your ELR. Your Number One son needs to get the best grades at Harvard to ensure he’s number one out there in the world.
Auto sales aren’t always going to be high. When interest rates increase even by 1%, your store could lose hundreds of dollars per vehicle. The turn will come. It always does. But this time, it doesn’t have to be painful. You and your team deserve to have the job security of knowing that every department is succeeding and profiting, and your clients deserve a World Class Customer Service Experience. Here’s the real car insurance: #NoDepartmentLeftBehind
Jaimi Blakely is VP of Strategic Solutions and Dealer Asset Management at Chris Collins, Inc. She can be reached at jaimi@chriscollinsinc.com.
Chris Collins Inc. provides a proven Service Success System that Doubles Profits and Retention and increases CSI. Jaimi has created hundreds of success stories and increased the bottom line for dealerships across the country and for the world’s most recognizable brands, including Apple, BMW of North America, The Grammys, and The Ford Motor Company. jaimi@ChrisCollinsInc.com or at 800-230-5165.
