The Difference Between 30% and 50% Net-to-Gross

The Difference Between 30% and 50% Net-to-Gross

When it comes down to it, there are tons of service advisors and managers out there, right? You might be one of the best or even the best at your dealership or service center, but how do you stack up across the market? The only way to find out is to line yourself and your numbers up against them and their numbers. In my coaching group, that’s exactly what we do. 

One of the ways the advisors and managers in this group level up is through gamification and competition. For example, I recently announced the new Service Manager Challenge on Service Drive Revolution. The prize is a tricked out 2020 Jeep Gladiator. I’m talking gun rack, humidor, the whole nine yards. Intrigued? You should be. There are two ways to join the challenge that you can learn more about here.  

On this episode of Service Drive Revolution, I also tell you which members of my coaching group won last month’s comp. Stacked up against other service advisors and managers, these guys came out on top. If you’re interested in joining us, you can learn more about that in the episode too. Maybe, if you’re good enough, I’ll be announcing your name as the Elite Top Dog soon…

At this year’s Top Dog event, an interesting question came up: What are the differences between the service departments that gross 30% and the ones that gross 50%? When comparing, the team that’s grossing 30% is often quick to make excuses. They assume that the difference is some sort of unfair advantage, like the markets are different or they have lower fixed costs for one reason or another. Next, they think it’s cuz the other team is working longer hours or more days every week. That might be true, but it’s not always it. 

To find out the answer, we compared net to gross for service advisors at Top Dog. The vast majority of them were at 30%. There were a couple of people who were at 40% or 50%, but most were right around the 30% range. It occurred to me pretty quickly that the likely reason for this is that 30% gross is what we tell service advisors they should hit when they join the group. Most of the time, they don’t believe us when we say they’ll get there and say things like “Oh, I don’t know about that. That seems impossible. We just want to get better.” No matter how hard they doubt or push back, we say “No. You can and will get to 30% net to gross. The goal is 30.” So our coaches start working with them with 30% net to gross as the goal. Every time, once they understand how to implement what we’re teaching them in the group, they reach that goal and end up at 30% net to gross. 

The problem is that once most people hit that 30% goal, they let themselves stay there. That was the big goal after all, right? It seemed unachievable before, so now that it’s been achieved, they go into maintenance mode without even knowing it. Instead of continuing to push for a higher net to gross, they stay at 30% and are happy about it. 

My question is…why can’t we set the goal to 50%? The answer is that it can be. So I’m on a mission right now to change the mindset around that goal. Sure, we can start at a goal of 30%, but that’s not where we stop and put our feet up. We can drive and convert traffic, keep expenses low, and run a healthy, strong business all while being at 40 or 50% net to gross. It’s just true. 

The only thing that’s stopping any of you from reaching beyond the 30% goal is your own mind. If you set yourself a goal, especially one that feels lofty to begin with, and then you hit it, do you stop reaching higher? Is 30% your full potential? I highly, highly doubt it. Cause if we’re really applying ourselves to get better all the time, 30% doesn’t mean we’ve arrived. It means we hit the first goal in reaching our untapped potential. 

So I challenge all of you to really think about what you think your own full potential looks like. Where could you and your team be in terms of results if you really pushed yourselves to be the best you could be? I’m talking about sustainable efforts here too…not a crazy push to hit a goal that you can’t keep up with once you get there. I’m talking about operating at your full capacity on a daily basis without pulling any stunts or insane hours. What does that look like?

I also received some questions from service advisors that I’d be willing to bet a lot of you also want to know the answer to, so I answered them on this episode. Here are a few of them:

“I’m about to start a new career as a service advisor. I’ve been watching your content on YouTube and trying to learn what I can before I start. I’m 51, and I know in your book that is a little too old to be great at the job or at least it doesn’t seem to be ideal from your perspective. I really do want to be successful and great at what I do. Any advice?” 

First of all, it’s important to note that I don’t necessarily think 51 is too old for a new service advisor to succeed. The issue isn’t age here, it’s capacity for learning new things and doing things in new ways. At 51, some (if not most) people have established how they do things and how they view the world. They see someone and have immediate judgments because they’ve been around for awhile and seen some things, so they take shortcuts in deciding who someone is and what they’re about. But when it comes to starting a new career as a service advisor, these shortcuts won’t help you and may even harm your ability, so it takes a lot of unlearning in order to succeed. 

if you take a service advisor or a service manager that is young and has no experience whatsoever, they’re a blank canvas without preconceived ideas. So you train them with the right tools and the best systems, more often than not they will outperform the advisor or manager thinks they know it all and is stuck in their ways. Their twenty years of experience can actually work against them. So I’d say that the first key to becoming a really good advisor at the age of 51 is to go into it with absolutely no prejudices or preconceived ideas of how things should be. 

The second key to success is true for any service advisor–young, old, new to the game or really experienced: Collect customers. This means that you need to really connect with them, pet the dog, make friends and be your customers’ go-to person in the car business. That’s the secret. You need to understand that the car is a commodity that anyone can service, but set up your game so that your customers feel like you’re the only one for the job. Make sure your customers feel valued, cared for, and safe in that they can trust that you’ll be ethical in working with them. You and your personality are what’ll set you apart from other advisors, so use it. In Millionaire Service Advisor, I give the example of my rich uncle…the guy I want to stay in good graces with. Your “rich uncle” is your customer base that chooses to spend their money with you. Nurture it and you’ll be golden. 

“What are your thoughts on advertising maintenance prices online? These items are meant to be impulse purchases that will boost our effective labor rate. We just signed up with X time, and now, we have the option of posting an online service menu. Should we include our prices?”

The short answer here is: No, don’t include your prices. The point of posting online is to drive traffic, and putting all of your maintenance items and their cost online is not going to accomplish that. The things that customers perceive as competitive labor that will actually bring them into the service drive are oil changes, tires, batteries, sometimes brakes, but that’s about it. You need to have two or three things that you’re competitive on and those are the things that I would put up on the website. I walk through a bunch of other things you can do to boost traffic in this online Service Manager University training if you’re interested–I can’t give out all the tips for free–but I can tell you right here and now that it won’t be by posting all of your maintenance prices online. 

If you decide that you do want to post prices, choose the ones that you know will drive traffic for your business and think of those things as loss leaders–services that aren’t necessarily big money makers but that will bring people in the door to spend more. If you can do that, go for it. If not, I wouldn’t do it. 

“After listening to Service Drive Revolution, I realized the dealership I’m currently at is leaving lots of money on the table and is not willing to make changes to allow service advisors to reach their earning potential. Should I leave for a dealership that makes customer service a priority? If I apply elsewhere, what questions should I ask to ensure the environment is going to be good?”

To answer this question, I have an exercise for you. Sit down with a piece of paper and draw a line right down the middle. At the top, label the column on the left “Things I Can Control” and on the right, “Things I Can’t Control”. Then, think about your situation at your current dealership and list things off that you can and cannot control right now. For example, as a service advisor, you can control how you approach customers. You can control your enthusiasm, you can control how you do walk around, how you pet the dog, how you follow up. There are a lot of things you can control, more often than not. Fill out the second column with things about the situation that are out of your control–how your manager views customer service, for example. Listing these out will make sure that you’re not making excuses for your lack of commitment to the role or issues with the dealership or service center. 

For the second part of the question, how to know if a dealership cares about their customers when interviewing, there are a few ways you can go about it. One is to secret shop them. Go in with your car or a borrowed car for an oil change and see how it goes. It’ll tell you almost everything you need to know. Second, when you’re interviewing with the manager at the shop, ask if you can talk to some of the advisors and then ask the advisors what their opinion is about company culture and how they take care of customers. Third would be to read online reviews. Sure, every shop will have a few people who are mad about their experience for unfounded reasons, but for a shop that’s solid on customer service, those will be few and far between. 

I answered a few more questions on the show, so check it out here to hear the answers. If you have questions of your own, ask them in the comments below or send them to me at [email protected] 

And don’t forget to enter the Service Manager Challenge Jeep Gladiator Giveaway. 

Want Better Results? Drew Tarvin Says Have More Fun

Want Better Results? Drew Tarvin Says Have More Fun

Leaders in every industry are always looking for ways to be better. They want to increase productivity, boost sales, grow, scale, keep leveling up. One place where even the best leaders fall short is in developing a solid company culture that actually supports all of that growth and productivity. I recently sat down with best-selling author and Humor That Works CEO Drew Tarvin on Service Drive Revolution to talk about just that. 

Drew spends his time teaching people how to get better results while having more fun. He’s the world’s first and foremost “humor engineer”, teaching people how to get better results while having more fun. He has worked with 35,000 people at 250 organizations, including Microsoft, the FBI, and the International Association of Canine Professionals. Combining his background as a project manager at Procter & Gamble with his experience as an international comedian, Drew reverse engineers the skill of humor in a way that is practical, actionable and gets results in the workplace.

Given his career and how successful he’s been, you might be surprised to learn that Drew identifies as an introvert, meaning that he feels recharged when he’s able to spend time away from people and likes to process internally rather than aloud. To him, being an introvert doesn’t say anything about whether or not he’s able to socialize. Drew looks at socializing, networking, humor, and the ability to engage in good conversation as skills that anyone can build rather than inherent capabilities. Because personality assessments are just that…assessments. They don’t dictate or limit our behavior or the skills we’re able to build. Personality assessments aren’t what define us. Our actions are what define us. And when you look at it that way, it’s really 100% up to you which skills you want to build and capitalize on, regardless of your “personality type”. 

Social skills, like almost anything else, can be practiced and improved. Generally, introverts end up having fewer conversations when they reach adulthood because their nature is to seek solitude to recharge. This means that they often have less practice–or less “reps”, as Drew puts it–in engaging in dialogue. Drew realized this and decided that in order to build his skills in that area, he’d go into improv. Maybe it didn’t “come naturally” to him, but that didn’t matter. He’s a smart guy who was able to develop a strategy for delivering content that he knew would land with his audience. 

He did the same thing to develop his networking skills. Networking wasn’t his strong suit, per se, so he developed a three-step process that would allow him to engage with others comfortably. It took some practice to get there, but now that he has the process down, he’s solid enough to train others on how to do it successfully too. If it had always come “naturally” to him, he wouldn’t have this process and structure in place and likely wouldn’t be nearly as successful as he is. He put in the work and he’s clear on the process, which are two of the most critical elements in getting results. 

These same principles apply to the auto industry. Service advisors and salespeople who claim to be naturally good at selling and talking to customers end up being inconsistent in their delivery and outcomes, and inconsistency just isn’t scalable. Without a process in place and a toolbox for making the process happen, it’s almost impossible to evaluate what works and what doesn’t and adjust your strategy accordingly. And when you someone doesn’t have to create that process, they won’t. They’ll rely on their “innate ability” to sell or speak, which can only take you so far most of the time. 

The fact of the matter is, even when someone makes their work look easy, the people who are at the top of their game have put in the work–the “unseen hours”–on the back end to get to that level of “ease”. From LeBron James to Jerry Seinfeld to Dave Chappelle, just to name a few, these people are putting in tons of work to make small tweaks to their game over time so it’s as good as it can be. It’s methodical, not “natural”. The service advisors and salespeople who are killing it are often the ones who had to put some effort into their game. 

So to boil it down, our main points are:

If you’re an introvert, embrace it and recognize the strengths that come with it. Focus on your powers of observation, skillful planning, and ability to help others understand how to do things, rather than pretending you’re an extrovert or trying to change yourself. 

Whether you’re an introvert or an extrovert, you have to do the work to get results. Introverts may be more naturally inclined to observe, plan, execute, evaluate and tweak, but extroverts need to do it too. 

Another principle that guides Drew’s work is that humor and fun in the workplace are absolutely critical to a company’s success and it’s really centered around one key question:

Would people rather do something that is fun or not fun?

It seems simple, maybe even too simple, but the impact of this question is important. That small question drives a lot of behavior because more often than not the response is that people would rather do something that’s fun, right? So in order to sell more products or services and engage more customers, we need to make the process more fun for them. 

Let’s take a client I worked with recently for example. It was a gym and like many gyms, they were doing the Groupon thing, inviting people to come in for personal training at a discount with the goal of getting them to sign on for a monthly membership once they try it out. If people just take the Groupon training session and never come back, they’re operating at a loss. So, what can a gym do to get people to come back? The answer comes from the same place as it does in the auto industry–curiosity. What can you do to make sure that your customer really wants to come back? More often than not, as Drew says, it’s fun that brings people back. You have to look beyond the tired and annoying tactics that have “worked” in the past and find ways to engage people that they will truly enjoy. This is another place where introverts thrive because most introverts are curious. 

I asked Drew what happens in a company when they’re not having fun and how he can tell when a company has changed after he’s taught them how to change the game so they are having fun. What are the characteristics that demonstrate that the company has changed? Productivity increases, turnover decreases and retention increases, and profits increase. Isn’t this pretty much exactly what every company is trying to accomplish?

From a behavioral perspective, Drew says that he sees workplaces that have made an effort to infuse fun into their culture start to show up on time more because they’re looking forward to go to work. At work, they’re laughing more and they’re less stressed, and that impacts literally everything. Again, it seems simple, but the truth is, as Drew puts it:

“We live in a society in which more people believe in ghosts than actually like what they do for a living.”

So it might be a simple concept, but not many companies are actually looking at their culture and making an effort to develop a workplace that values fun and humor. 

If you’re skeptical, there are numbers behind the theory that fun in the workplace leads to the positive outcomes outlined above, which Drew outlines in his book. According to the American Psychological Association, for example, the average cost of a stressed out employee is $7,500, in terms of healthcare costs, lost productivity, absenteeism, and presenteeism (when someone is physically at work but not fully present). This might not seem like a big deal until you learn that approximately 83% of Americans are stressed at work. That’s a whole lot of cash being lost because people aren’t happy in their jobs.

When your employees are disengaged, it doesn’t matter how well you train them or how efficiently you calibrate their workload. As Drew puts it, “The problem with time management is that, it doesn’t matter how much time you have, if you don’t have the energy to do anything with that time.” The impact on the world outside of your business is huge, too. Disengaged employees can easily become disengaged humans. If someone is spending their time slogging through work all day, do you think they’re going to head out of the office and have a positive impact elsewhere? No, probably not.

So, then, what does it take to be happy? Here’s what Drew has to say:

  • Happiness doesn’t always result from or follow “success”, so stop waiting to suddenly become happy once you reach whatever your definition of success is. Humans have what Drew refers to as “hedonic adaptation” or the “hedonic treadmill” that causes us to perpetually seek happiness. When we accomplish something, we feel an increase in happiness momentarily and then return to our baseline. This short-term impact serves us well when it comes to negative feelings, but it also means the happy feelings are quick to pass. Happiness doesn’t come from accomplishing or buying or achieving. It’s a choice.
  • We need to stop comparing ourselves. There’s not one set bar for happiness and when we compare ourselves to other people in other industries or who are doing things differently, we lose sight of our own happiness.
  • Gratitude is everything. Try to be grateful and mad at the same time. Drew challenged me to do it, and it’s honestly impossible.

All of this said, I need to make one thing absolutely clear: Stress is not a bad thing in and of itself. In fact, on the show Drew tells a really poignant story about his time at Procter & Gamble and how he came to learn that stress expands your capacity up to a point. The problem is chronic stress–stress that isn’t ever relieved and only continues to build. 

That’s where humor comes in.

Humor acts as a critical form of stress relief and basically allows people to counteract the negative effects of stress. Laughter literally lowers blood pressure and decreases muscle tension. It’s powerful. It works in the auto industry and I’d venture to guess most others. No matter your location, budget, or the services you provide, if you find ways to make your work more fun and allow for humor, you’ll see positive results. 

Listen to Drew’s episode of Service Drive Revolution here. He has tons more information and guidance up his sleeve. Then, you can learn more about Humor that Works and Drew Tarvin on his website.

A Little Southern Hospitality Goes a Long Way – Customer Loyalty & Tech Happiness with “The Humble Mechanic”

A Little Southern Hospitality Goes a Long Way – Customer Loyalty & Tech Happiness with “The Humble Mechanic”

When you think about the ecosystem of a dealership, do you place techs and salespeople in totally different areas? There’s no overlap between those skillsets, right? Wrong. Very, very wrong. In fact, when your techs have knowledge and understanding of customer service, it can make a HUGE difference in terms of client satisfaction and retention. And this is just one of a few adjustments your shop can make that will bring in more customers and keep them coming back over time. 

To talk about what these changes are and how to implement them, I had Charles Sanville, better known as “The Humble Mechanic”, on Service Drive Revolution. He’s seen the impact of things like techs who know customer service firsthand. A million and a half years ago, as he puts it, Charles started as a technician for Volkswagen Audi shop in North Carolina…and that’s where he stayed for the majority of his automotive repair career. He references taking apart VCRs in telling the story of how he made his way to tech school–that’s how many years ago he’s talking about–but you’ll have to listen to the episode for that part

Charles came to VW with no professional experience fixing cars. Before starting as a tech there, he’d been a salesperson at a different dealership and worked in retail while he went to tech school. But unlike many other techs, he’d never worked in a shop as a tech in any capacity before. And the thing is, that’s what he sees as being his biggest advantage. Why? He came in with an understanding of how to treat and take care of his clients–a skill that those other techs often lacked. So many techs would rather avoid contact with clients, focusing on doing “their job” well. Charles, on the other hand, wanted to build relationships with his clients and created what he refers to as a “tiny service station” inside the dealership. He didn’t necessarily do it with the goal of retaining more customers than his colleagues, but that’s what happened. His customers didn’t just choose to keep coming back to the dealership for repairs, they chose to come back specifically to see him. The way he put it is pure gold: 

Never wanted a customer to think, “Oh my God, what do I do? Or how much is this going to cost me or what the heck? Who is going to look at this and figure this out? Am I going to get ripped off?” It was always, “I wonder when Charles can look at my car.”

This mentality took away the stigma so many people associate with taking their cars in to get repaired. Rather than thinking about getting “ripped off” or what a pain the experience would be, Charles’s clients were eager to bring their cars to him for a dependable, trustworthy repair and a friendly experience. 

With this mindset, Charles was able to take ownership, and ultimately control, of his business as a tech. He wouldn’t waste time blaming the system or other people if business slowed down–which it rarely did. 

So, where do service advisors fall in all of this? They’re usually the ones talking to clients and making those transactions happen–not the techs themselves. The problem is, more often than not, techs and service advisors operate so independently that it’s detrimental to them both. For example, in order to give a good presentation to a client on what kind of work their car needs, service advisors need to have a solid understanding of what the problems are. But more often than not, they just get the inspection sheet and use that basic information to fill the client in. Sometimes, this is because they just aren’t curious about what the details are. Other times, it’s because they think the tech will feel as though they’re questioning their work. Whatever the reason, it leaves the service advisor without information that could be helpful in presenting to the client. On the flipside, techs often treat the whole process like all they’re selling is a commodity and don’t feel the need to communicate with service advisors. 

This poor communication is a huge problem in the auto service industry. In addition, different positions within the dealership often get so caught up in sticking to their roles that they lose sight of the common goal: to fix the car and keep the customer coming back. In combination, these two problems can have a really negative impact on customer retention. 

On the other hand, when techs and service advisors communicate and work together toward a common goal, the whole game changes. Instead of just handing over the inspection sheet and moving on, the tech goes to the service advisor and briefly explains the issue and the service advisor has the chance to ask a few questions to make sure they know what they’re talking about. Then, the service advisor can finesse the explanation and take it to the client. The client will inevitably trust what the service advisor is telling them more if the advisor says that they went back to the shop and talked to the tech about the tie rod that needs to be fixed and why that is rather than just saying it needs to be fixed. If the client has questions, the service advisor can actually answer them rather than bumbling around and BSing them. Plus, the service advisor will likely deliver the information in a way that appeals to the client (and without the expletives tossed around in the garage).  

Charles saw the typical issues play out at his VW dealership. He also noticed some major shortcomings in his dealership’s social media strategy. He saw other dealerships offering crazy promos and deals–$5000 off your new Chevy if you purchase in a certain time period and things of that nature. But what he didn’t see was shops who were really promoting their service. He’d always known that his shop was particularly awesome. To start, it was a VW dealership and the people he worked with and around were really killing it at retaining customer relationships. He tells some stories about seeing different generations come in and swapping out bumper stickers as kids grew up and started new schools. So when he thought about social media, he wondered how his shop’s unique vibe and customer service could translate to their online persona. He wanted to change the dialogue around the auto service industry and the stigma and fears clients have about bringing their cars into the shop. When he brought this to the dealership, they got on board but then immediately outsourced to a company to manage their online persona for us. 

Charles wasn’t into that, so he decided to do it himself and created a resource for customers as well as techs that lets you in behind the garage door. As the Humble Mechanic, Charles pulls back the curtain to give consumers some insight as to what is going on with their cars, what’s not working and why, and how they can talk to their service advisor or tech about it. His business is thriving, and that’s because it does a few critical things: It provides customer service in a space where its lacking and needed, many people really are interested in what’s going on with their cars, and it takes away the mystery of the whole process. In the auto service industry, there’s so much mystery behind the diagnosis fee or why a certain job takes as long or costs as much as it does. This is a big part of the reason why there’s so much distrust when it comes to auto repair. As the Humble Mechanic, Charles explains it to them. For example, it might take seven hours to do a job by the book, but the tech has purchased specialized tools that allow him to do the job in three. If the tech only charges for the three hours of labor, it doesn’t account for the expense of the specialized tools. Explaining these kinds of things clearly to consumers helps build trust in the auto industry as a whole. Because Charles is no longer a tech himself, he’s providing this information and these resources without a pitch to get people into his shop, so he has nothing to gain in the process which further increases consumer trust. 

Dealerships that are looking to level up–and which ones aren’t?–should take note of the Humble Mechanic’s success and make a few powerful adjustments to how you run your shop that will not only bring in more customers but will keep them coming back:

  • It’s amazing how far a little hospitality can go! Southern hospitality in Charles’s case, but any kind of hospitality will do. Train your staff, from techs to service advisors to salespeople, to work together to provide the best customer service.
  • Let consumers behind the garage door…figuratively speaking. Clients don’t trust the mystery. They want transparency and information that is digestible to them. Having your techs and service advisors communicate will be part of that, but there are other ways you can do it too. Which brings me to the next point….
  • Be generous with information. Make videos about how to change a tire on a specific make and model, for example, and post them on your social media accounts. Your existing clients will see them and, more importantly, so will tons of other people who aren’t your customers now but might be soon. Plus, it’ll allow clients to make decisions about what they do and do not want to get fixed and weigh out the consequences of those decisions. 

If you make this minor yet impactful changes at your dealership, I guarantee you’ll see results in terms of both client acquisition and retention. 

Don’t miss out on the Humble Mechanic Charles Sanville’s words of wisdom. He knows what he’s talking about. Start by listening to this episode of Service Drive Revolution, then head over to his YouTube channel and the Humble Mechanic blog. You won’t regret it.

Can Service Advising Be Automated? Quik Auto’s Jack Gardner Says Yes

Can Service Advising Be Automated? Quik Auto’s Jack Gardner Says Yes

These days, it’s more important than ever that businesses meet customers where they’re at. This means creating platforms that allow customers to engage when and where they need to rather than sticking with old school systems that don’t work anymore. That’s definitely true in the auto service industry and many service advisors–maybe even you–are looking for ways to deliver their services more effectively. 

I had Quik Auto CEO Jack Gardner join me on Service Drive Revolution to talk about how he created a platform to automate and digitize some of the work that auto customer service advisors and auto repair consultants have traditionally done. It’s started to take the automotive consulting world by storm and there’s a lot we can all learn about how it came to be and why it’s so successful in the world of automotive consulting services. 

Jack started his career as a Toyota tech and then tried sales. Turns out he was pretty good at the sales game. The problem is…he didn’t like it at first. He decided and even attempted to quit, but his manager pushed him to stay on. When he did, his mentality changed. There was less pressure and more drive to just see what he could learn and do. He describes it as “confidence that was derived from product knowledge”, and it led to a $16k paycheck in his second week alone. He also got into a fair amount of trouble and has some funny stories to tell, but I’ll let you listen to his episode to find out more about that…

Jack’s sales strategies were simple but effective. When the concept of leasing cars started to come up, he was hesitant at first because he didn’t get it. But when he saw another salesperson making bank off of fewer sales, he realized it was time to learn the game. He saw the money in it and learned everything there was to know about leasing. 

Once he had the expert knowledge about leasing, he figured out how to get that information to skeptical clients. He had a line he’d use to get them interested in learning more about it:

“Would you agree that a better decision will always be made based on all of the facts, as opposed to some of the facts?” 

Once they said yes, they were on the hook to hear his pitch about leasing…and it worked. Then his strategy was to deliver a pitch that focuses on the basic terminology and information clients would need to make a decision, instead of getting into percentages and residual rates. His goal was to help them understand this new concept and why it would be a solid option for them to consider. And people considered it…at the staggering rate of about 60%. 

From there, it was all finding the “sweet spot”. He learned early on that allowing clients’ leases to mature was a bad move. After their leases matured, clients would come in to return their cars but often put more mileage on the cars than they had agreed upon. Once the contract was up, that meant that Jack had to tell the client that they owe more money, which never went down well and took up a lot of time and energy. So he started to touch base with clients to talk about trade-in before their leases were up. The trick about the sweet spot was that there was no specific timeline around it, it just came up whenever the manufacturer needed to move a supply of cars off of the lot. So Jack would wait for those moments to come up, then call clients who were leasing and offer them a new lease on a new car for a “comparable” payment, with “comparable” being the magic word. 

Another key point Jack made was that people remember the little things. If you deliver consistently on the little things, like making sure each leased car has a full tank of gas when it leaves the lot, you’re golden. That’s what people remember. So clients would spread the word to others about leasing and the smooth process and the next thing you know, he’s got an incredibly lucrative leasing business that leads directly into a solid used car business.

From there, Jack went into finance for a few years, then started as a general manager, and moves on to start training people how to lease cars. And then…he met a guy at a bar, as he puts it. They started talking shop and eventually decided to launch Quik Video, a business that sent information on multi-point inspections to customers in a manner in which they understood it. From there, it grew well beyond videos and into texting, electronic multi-point inspection, internal chat and more and they changed the name from Quik to encompass the new services. Quik. is a digital service advisor that lets customers see what their options are, learn about them, and make decisions without an in-person advisor. Basically, they offer a solution that makes relationships between dealers and customers more honest, open and transparent.

But more than the technology itself, the key to Quik.’s success has been consistency. Jack’s strategy was built on a few pretty simple but really important rules. The first one is Toyota’s Quarter Time, meaning that the results of a multi-point inspection should be in the customer’s hands in the first 15 minutes, which leads to an 80% chance of selling the work. If it takes 39 minutes, so those first 15 plus 24 minutes of delay, that percentage falls down to 10%. So Quik. offers dealerships a way to put that video out to a customer in 15 minutes, which led to impressive sales results. It’s a tried and true rule that many automotive industry consultants know, and it was confirmed yet again through the Quik. platform. 

Quik’s software saves dealerships tons of money and can generate even more revenue from customers. Why? According to Jack, customers have a hard time believing service advisors because they view them as salespeople looking to make the most money possible. When a digital program is telling them what they need, they tend to trust it–it’s just a machine that doesn’t know how to lie or upsell. In addition, customers can learn more and do it on their own time when they’re using software to do it. So, basically, they upsell themselves to the tune of about 30%. When they’re making decisions online, they opt in for more maintenance than they would with an old school in-person advisor. 

Plus, once customers decide they want to do in terms of maintenance, a technician can then look at that as well as what they decided not to do. If the technician thinks that the service is necessary, they can explain to the customer why they should do it in an online video that goes directly from the tech to the customer. This way, as Jack describes it, the customer gets that advice directly from the “doctor”–the technician–rather than the “receptionist”–the advisor. Psychologically, this gives the customer the sense that this work is important and gives them the opportunity to understand why, so they are much more likely to go for it.

Over time, Jack has learned that automating everything is crucial to Quik.’s success. Integrating with DMS (we won’t tell you which is the worst out there), making sure all of the different systems that are part of the inspection and maintenance process are talking to one another…those automation make sure everything goes smoothly. 

Jack’s main goals have been to help dealerships increase their revenue without additional work and to build a platform that gives customers what they want and need, instead of forcing them to use an antiquated system that makes it stressful and difficult for them. In elevating the customer experience, the three things that both the dealer and the OEM are truly concerned with will fall right into place:

  1. They will sell more work, which means the manufacturer is selling more parts–more selling all around.
  2. Customer Service Index will go up, because you’ve exceeded the consumer’s expectations.
  3. Retention will go up because of the other two fell into place, so why would the customer go anywhere else?

So, service advisors…what’s your takeaway here? It’s not that your role is going to be eliminated because technology can never fully replace talented service advisors. The takeaway is to develop strategies that allow you to be CONSISTENT in what you provide and how you provide it. As Jack says, technology won’t replace people, but it will replace the weak. If you aren’t weak, technology like Quik. will only help you out. If you are, it may take you out. 

If you’re interested in learning more about Quik., give Jack Gardner’s episode on the Service Drive Revolution podcast a listen here and check out their websites: Quik. and Service Concierge.

HOW MINDSET DRIVES BUSINESS PERFORMANCE ON THE SERVICE DRIVE

HOW MINDSET DRIVES BUSINESS PERFORMANCE ON THE SERVICE DRIVE

Let me take you on a quick trip back to my band days. For those of you not familiar with “band” thinking, it’s very much like being in a gang. You must stick together, and everything is for the good of the band. So one day we’re practicing and Ian Astbury comes in and asks if there’s a drummer who wants to try out for The Cult. Well, I was the only drummer in the room so it was totally awkward. But because I was completely committed to that, “we must stick together,” band mindset I passed on the opportunity. My mistake.

But, back to mindset and being a prisoner of your own mind… Almost without fail, when we meet with new clients, whether they’re service advisors, service managers, or owners they’re stuck in an old way of thinking, often the result of bad experiences, or feelings not facts. That is no way to run a business, and I don’t want you missing out on your chance at being the drummer for The Cult. You create your own destiny. No, I haven’t just returned from Burning Man. This is real. Your mindset affects everything you do from dealing with problems to how you feel about yourself. So you have to have a mindset that is positive and informed to make smart decisions.

IF I HAD A DIME FOR EVERY TIME I ASKED A CLIENT TO RETHINK THEIR PRICING AND THEY SAID NO WITHOUT DOING ANY RESEARCH ON PRICES IN THE CURRENT ECONOMY I’D BE A BAZILLIONAIRE.

Tip 1. Do your research on current prices and see where you’re off. It’s lazy not to look at data and make assumptions about what people will or won’t spend.

Next, tip 2. Try new things and be open to new ideas. I promise that if you open your mind your brain won’t fall out.

I remember when I was always out in stores I constantly saw new things that were going on. But once I was stuck in my own shop I stopped seeing all those fresh ideas, and started to fall into the trap of creating my own ideas of what would work, or what wouldn’t. You must leave your own territory and see what other people are up to.

Tip 3. Train your employees about financials and profits. How to understand them and make pricing decisions that will help your shop make money.

It’s outdated, but we still think of technicians as grease monkeys, or somehow not skilled laborers. But with today’s technology these guys are mechanics, electricians, and in some cases almost engineers. You can’t do business without them, or their service advisors, so they all MUST learn about their numbers and financial statements too. The fact that service managers are not trained on financials is a joke.

I HAVE TO GO WALK THE DOGS BUT HERE’S YOUR QUICK RECAP ON HOW TO RESET YOUR MINDSET:

  •  Base decisions on facts over feelings.
  • Do your research and get the correct data.
  • Get outside your market and see what other business are doing.
  • Get a coach to help because we see what’s out there.
  • Get in a coaching group so you can be exposed to lots of different things and people.
  • Open your mind to new strategies and opportunities.

OK, GET TO WORK ON OPENING THAT MIND BECAUSE I PROMISE, YOUR BRAIN WON’T FALL OUT! I’LL SEE YOU NEXT WEEK WITH MORE TIPS AND TOOLS FOR BUSINESS PERFORMANCE.