Ever wondered what makes a great service manager? Why it is that some always seem to hit their goals, while others struggle immensely? The automotive industry can be a tough game, but just like in any other industry, there are traits that the best of the best share.
If you want to succeed, listen in as Mario Pernillo sits down with Chris and Gary, walking through what makes a great service manager.
What makes a great service manager might not be rocket science, but it’s definitely revolutionary – the Service Drive Revolution. If you are looking for more ways to improve ROI in your business, schedule a free consultation to learn more about our OnDemand Training Program.
Ever wondered why it is that some service advisors hit (and exceed) their goals, while others seem to fail? The automotive industry can be a tough game, but just like in any other industry, there are things you can do to push ahead of the competition…and other things that will pretty much guarantee failure.
If you want to succeed, listen in as Chris sits down with service pro, Jeremy O’Neal, and learn the best ways to make – and keep – the customer your number 1 priority, which keeps them coming back.
Avoiding these 10 mistakes might not be rocket science, but it’s definitely revolutionary – the Service Drive Revolution. Revolution. If you are looking for more ways to improve ROI in your business, schedule a free consultation to learn more about our OnDemand Training Program.
That’s nuts. And we owe it all to you. Huge shout out to everyone who’s been listening and watchingService Drive Revolution. It’s all thanks to you!
So a few months ago, I was speaking at an automotive accounting event in Vegas. No, it wasn’t NADA (I already said I stopped going to those), but it’s similar. The only real difference was that this event was for brokers instead of dealers.
And just like NADA, the hosts at this event were also telling me not to talk about Tesla because it’s an “uncomfortable” subject!
Well, these brokers were talking about how Volkswagen doesn’t have a clue, because they’re transitioning to electric cars and, in their own words, “Americans don’t want electric cars.”
Bull. Absolute bull. I’ve said it before, and I’ll say it again: This isn’t about us, it’s about China.
China has been selling 30 million new cars a year – twice as much as the US. They’re not only dominating the world car market, they’re also phasing out combustion engines.
By 2026, every new car in China has to be electric. It’s a game changer. That’s why Tesla opened a factory there. It’s part of the reason why the CEO of BMW stepped down…
…But, according to these brokers, Volkswagen doesn’t have a clue? From what I can tell, by going electric in anticipation of this change, Volkswagen is miles ahead of the competition!
Look, I get it. The internal combustion engine built our market, and our industry was modeled after what Henry Ford did with the Model T…. But it’s not just about selling cars or servicing cars anymore. Transportation is changing. By getting rid of the internal combustion engine, we’re being forced to swap out the very backbone of our industry!
In the last three years alone, countries like Norway, Denmark, Israel, Iceland, the Netherlands, Sweden, the UK, Ireland, and most importantly China have all publicly announced plans to phase out combustion vehicles by 2030. Now, aside from China, these aren’t very big markets compared to the U.S. But I bet you that every other major market is going to follow eventually.
Regardless of your personal beliefs in things like climate change, there’s a clear and overwhelming trend starting, and the industry has to adapt if it’s going to survive.
Speaking of transportation changing….
There’s an all-female shop in Philly called the Girls Auto Clinic. It was founded in 2013 by Patrice Banks to empower women to have equal roles in the auto industry by educating and employing women in a full-service auto repair shop.
Now I know what you’re probably thinking: isn’t that some sort of… reverse discrimination?
Yeah, that’s a fair point.
Why couldn’t a guy apply to work in that shop? Then again, he could always open his own all-male shop, right? But wait– A lot of shops are all-male shops without even trying to be! It’s a male-dominated industry, and there’s nothing fresh or unique about an all-male shop! Who knows? Maybe consumers have a tendency to trust a shop more if it’s all-female.
The shop has been around for 7 years, after all. They must be doing something right!
Now, we’re not here to talk about the difference between a male or female service advisor, but I’ve always tried to get female advisors in any male-dominated drive because it balances out the shenanigans that are bound to happen in a testosterone-fueled environment.
But the funny thing is, a lot of female customers don’t trust female advisors. Most of the time, they ask for a dude! Now, I’m not saying that’s how it is in every shop across the board, but it’s definitely something I’ve noticed, and that’s just crazy to me.
That being said, people do relate and open up a bit more when it’s men talking to men or women talking to women. That’s just human behavior. Either way, an all-girl shop is a cute marketing idea and if we can get more women into the industry, I’m all for it!
Some of the top managers we’ve had in our coaching group have been female. You don’t want to scare talent away and cause them to go to other industries just because of their gender.
Now it’s time for Terms You Should Know:
Efficiency vs. Proficiency.
Efficiency is how many hours the technicians flag vs. how many hours are available so, if they’re working an 8 hour day and they flagged 8 hours, that’s 100%. If they work an eight hour day and they flagged 16 hours, that’s 200%. 24 hours, 300%. 30 hours, 375%.
Proficiency is a formula of how long they’re clocked on a repair order which means nothing. If you flag 200%, I couldn’t care less about proficiency. If you bonus on proficiency but your efficiency is low, you’re losing money so the thing I would like you to do is just focus on efficiency and forget about proficiency.
It’s something consultants love to talk about to confuse you and make you feel like you need them, but it’s not a measurement that I’ve ever seen improve the bottom line.
But what does go a long way, is having a shift meeting.
Take 10 minutes out of every day with your advisors, your technician, and refocus them. Get them pumped. We encourage you to play music before every meeting, so let me tell you my current top five shift meeting songs:
Rage Against the Machine – Killing in the Name
Run the Jewels – Talk to Me
Greta Van Fleet – When the Curtain Falls
Tim McGraw – Live Like You Were Dying
Pearl Jam – Clairvoyants
Get everybody focused on what they should be doing today – not thinking about their bills or problems – and get them focused on delivering a five-star customer experience!
Now to wrap it up with our audience questions…
“Our dealer has a $12.95 oil change semi-synthetic or false synthetic. We have customers that only come in for the low cost oil changes. When I offer any other services, they decline. Some are converted, but not as many as I would prefer. Sometimes I ask them why they won’t allow us to earn their business. They say, ‘Oh, I have a mechanic.’ Then I respond, ‘But your mechanic doesn’t offer oil changes for $12.95.’ I feel like this is the wrong response or attitude, but I feel like a cheap whore and we’re being used. Any tactics for a higher conversion rate? Thanks.”
Wow. Sorry you feel like a cheap whore. Don’t think I’ve heard that one before.
Still, a great question. There’s a couple things going on here… and the first one that you have to understand is that selling is like a batting average. A lot of times, you feel like you’re not selling, but most of the time you actually are making good numbers. It’s the same thing that happens to techs in the shop. They feel like, “Oh, I fill out the inspection sheet but we never sell the work,” but if you go back and look, you actually are probably selling work!
If you’re going to run some sort of campaign that was going to drive traffic, that would be a good one; $12.95 is driving traffic. It’s working! You want to concentrate on being consistent and not letting the ones that don’t buy get into your head, right?
You don’t have control of the marketing at the dealership but know that you’re lucky to be getting traffic because some shops don’t get any at all – it’s better to have something than nothing!
You also gotta frame it as investing marketing dollars back into the customer. The sale isn’t made on the back end when you present the inspection, it’s made at the write-up. When you pet the dog and have a great conversation up front, you might just wow them and make them want to switch from their mechanic to you. Make it a process and keep doing it and you’ll convert plenty.
I would also say that you’re probably projecting; you’re projecting that you’re a $12.95 loser and it’s almost like you’re asking a question with the intention of a negative outcome. What I would say in those situations is something to the effect of, “Hey, I’m glad you’re here for the oil change and that you keep coming back, but I want to earn ALL your business. What can I do to earn that?” and then shut up.
At the risk of shamelessly plugging our training, our coaches are skilled in handling objections like that. If you had a coach, you could work with your coach and better your skill set!
“I started a job as a service advisor a month ago with no experience. I picked it up quick, and now I’m doing pretty much everything including warranty work with a little bit of help every now and then. How do I get more hours per R.O. and how do I make it work for me to increase my gross profits?!? Because my co-worker told me that the less you pay the technician, the bigger your gross profit numbers get. On the other hand, everybody keeps talking about increasing the hours per R.O. so I’m a little confused. Any advice? Thanks much.”
The first thing I would say is that it’s the most moronic thing ever to pay an advisor on gross, and you want an advisor to worry about paying the tech less?! You’re not training them. They don’t even understand what gross is!
We’re in an industry where we need technicians, by the way. We’re losing two technicians for every new one coming in, and we’re going to create a situation where advisors are trying not to pay technicians?! That’s crazy!
The gist of it is: don’t pay the techs less. What you want to do is hold your effective labor rate. The effective labor rate has nothing to do with hours per R.O. but hours per R.O. will help you sell more gross collectively. On every hour of labor you sell, the higher the effective labor rate, the higher your gross.
You want to increase your effective labor rate, focus on helping the customer first! If they like and trust us, they’re not going to be as focused on price.
Once again, we appreciate everybody for tuning in and downloading a million times!! I’m still blown away by this milestone. Thanks again to all of you, and we’ll see you again next week!
I assure you: I’m not going crazy and I’m not on anything. Well… I am interviewing this kid, Nick, for that $100,000 assistant position. He got me a limited edition bottle of tequila, and I may have been sipping on it earlier, but that’s besides the point.
Think about it as a service advisor: Why is maintenance easy for a customer to say no to? Because there’s no noticeable difference in performance until something breaks!
Wouldn’t it be great if manufacturers programmed cars to pull over to the side of the road and shut off if you were overdue for maintenance? I’m sure it wouldn’t be great for the driver, but it would be great for the car… Or at least, better that than running it ragged until it breaks down in the middle of the road, right?
Well, thankfully things don’t work that way, but that leaves the question of how to help service advisors and dealerships increase maintenance revenue – especially since parts revenue is under attack thanks to online venders.
The answer is stepping into the time machine that is vehicle maintenance and getting an 800% return on investment. That’s $8 worth of repairs you’re preventing for every dollar you invest in maintenance. Really!
In the independent world we see a lot of cars on a repair plan, while dealerships usually take really good care of their customers’ vehicles so those would be on a maintenance plan. In the end, it’s cheaper to drive a car on a maintenance plan than a repair plan. What we want to do is get the customer out of the repair plan by selling them maintenance.
That’s how the time machine works.
We all have moments where we wish we could go back in time and make a different decision, and maintenance is no different. It’s like seeing your future through a crystal ball but not doing anything about it until it’s too late. These are the kinds of things to convey to the customer so they make the right decision to protect their car for the next three or five years.
When the day comes and your car breaks down, we can’t go back in time and change the past where you decided not to have maintenance done. There’s no chemical we can put in your transmission to fix it after you’ve let it fail, but if you say yes to maintenance today, you’re preventing an internal failure (power steering, transmission, etc.) three, four five, or ten years into the future.
The core of what we do as trusted service advisors is create a customized maintenance and repair plan tailor-made for you and your car. Manufacturers don’t even put this stuff in the maintenance book or factory recommendations anymore.
So what should you do? Step outside of what’s in the book. Write your own book!
Manufacturers design these maintenance schedules because they want to sell cars! If the cost of maintenance of the Ford F-150 for the first 100,000 miles is $2500, while Chevy and Dodge are at $1200 for maintenance, who’s going to sell more trucks? That’s where extended service schedules come in. But now we’re seeing a labyrinth of catastrophic failures between 100,000 – 300,000 miles that lead to expensive repairs, all because the car was neglected in the first 100,000.
Of course, I didn’t come up with the time machine analogy. Full credit for that goes to Jeremy who is my guest host on this week’s Service Drive Revolution!
In this episode, we’re also introducing a new segment called “Terms You Should Know.”
Today’s term is…
More importantly, what is the formula for retention?
To figure that out, ask yourself: how many of your customers come back? How many customers come in a second, third, fourth, or fifth time? In the dealership world, numbers usually sink down to 25% retention by the fourth or fifth visit, even though they have free maintenance. What that basically means is that the customer would rather pay $80 at a Jiffy Lube for an oil change than come into the dealership.
Owning an independent shop himself, Jeremy has just two reasons for why that’s the case:
Convenience The location of the dealership isn’t as close as possible to work or home, or it takes too long to get the vehicle in for service.
Attitude A big issue with dealers is the attitude of the service department when the customer is trying to get an appointment to get serviced – it’s too hard to get a live person on the phone who’s nice and friendly. Times are changing. Just let the customer book online with their smartphone!
The last thing I want to say about retention is that every person that touches the customer during a transaction is going to be a factor in that retention. This is why you need to make sure that everyone on your staff has a positive attitude, and are committed to Petting the Dog.
Now it’s time for questions:
“Chris, love the podcast. Your ‘How to be Self-Made’episode was a huge inspiration for me. Quick background: I work as a domestic manufacturing representative for after-sales parts and service. My occupation’s focus is to be more consultative to my group of dealerships. What recommendations do you have for manufacturer reps, pit falls, qualities of successful reps, how to foster strong relationships with the fixed ops department, etc.?”
Basically the question here is, he’s a factory guy so how can he relate to his dealers in a way that’s constructive?
At one point, I had a bunch of BMW clients. There were about 15 of them that were in a group here in Southern California, and the BMW factory had an agenda where they wanted all the dealers to be on this software called NPI, which was an inspection program.
I had some dealers on it, but it seemed like every time I’d go into a dealership that was on that program, I would have to get rid of it, because it didn’t work and their numbers would go down – even though it was a digital inspection system, the hours per RO would go down. When the nice people at NPI reached out to me, I told them myself, “If you guys pay me, I’ll tell you how to fix your software, because there are some flaws in it!”
Long story short: two guys from the BMW factory call me out to their headquarters here on the west coast, and they get me into this conference room with a long table where I’m one side and they’re on the other.
Now, I thought they were going to say, “Hey, how do we get our stores to perform like yours?”
That’s not what they were going to say. They told me that they had a problem with me because I was keeping NPI from going in all these stores.
I wasn’t going to spend five grand a month on something that made our numbers go down, so I tell them, “I’m not trying to mess up your agenda that everybody has to be on this program whether it works or not,” and then I ask them what the average net to gross in the average service department in the western region is.
They couldn’t even give me a straight answer! They had no clue what the net to gross was, because they couldn’t care less about it. Everybody knows the factories come out with a new thing every year and a new agenda, but it doesn’t always benefit the dealer.
Now, onto the next question:
“Hey Chris, I have been an advisor for about 10 years. I worked at multiple dealers and have experience with many different brands. Currently, I am at a Lexus store. My question to you is what is your opinion on calling a customer by their first name or last name? I prefer the first name because I feel like it makes a better connection, but out of respect, sometimes I feel like the last name is better. Any help would be appreciated, thanks.”
Great question. When I was an advisor I would just ask something like, “Would you like me to call you Chris or Mr. Collins?”
A great tip from Jeremy is to offer your name, shake their hand, and say, “I didn’t catch your name…” or “And you are?”
I think asking is a nice touch because it shows respect, but it can get weird sometimes… For example, I know billionaires that want to be called by their first name, and I know people that are broke as a joke but want to be called “Mr. Thompson,” or whatever. It really depends on the person and how they were raised or what their idea of respect is, but I would just ask up front.
Thank you for reading, tuning in on YouTube, or listening to us on your favorite podcast network! Keep your ears out for a Drive-By on Friday and we’ll see you again real soon!
“You are your own worst enemy” is more than just a popular saying. Nine time out of ten, the person who’s costing you the most business is none other than yourself.
Do you want to get ahead in sales? Then you’ve got to stop falling into these traps and standing in the way of your own success. My guest Coach Chris Hogland joins me on this week’s Service Drive Revolution as we break down some of the biggest mistakes that are keeping service advisors from selling more.
As for myself, I often find that scheduling can become a major issue. Managers aren’t putting a system in the drive where advisors have time between appointments to call customers with updates. Usually, appointments are booked way too close together, and the result is that customers wind up calling in for an update. When this happens, you bet the customers are unhappy – they don’t know where to go or what to do, and it’s pure chaos! It’s a manager’s role to fix that before it happens.
On the advisor side, I feel like they can be too transactional… “Line up. Come here. Do this.” It’s not fun or friendly! You’re not an airline! The customer doubts what’s happening in the back of the house if the reception isn’t warm at the front. Even if it’s a controlled chaos, they feel like herded cattle. If your system is just trying to make it from 7:00 to close with the least amount of heat possible, then you’re making it too transactional.
We have clients ranging from dealerships to independent shops and heavy truck clients. 70% of the customers that start off buying their car at the dealer end up leaving and going to an independent shop. Now, from the perspective of the independent shop, the dealers have the home field advantage because customers go to them first.
Think about it: the dealer had the home field advantage that everyone wants, but then they pissed it away!
One of the biggest things keeping advisors from selling is that they think the car is the star of the show, when it’s really the customer. When you make things transactional, the only competitive edge you have left is price. Now, what does that mean? It means you skipped the basic steps of connecting with the customer, so the last card up your sleeve is offering a discount when they haven’t even asked for one. If you’ve defaulted to discounts as an operating system to keep your customers, then your closing technique might as well be dropping your pants and getting naked.
They want their car fixed, and they want to feel like there’s value – which happens when the benefit outweighs the cost. Be the reason they’d rather pay more for your service than go down to Chucky’s Lucky Brakes and get ripped off. I can’t tell you how many times I’ve heard, “my mechanic said this,” or, “my mechanic said that.” They’re bluffing. A lot of times they don’t even have a mechanic, and that’s just their way of objecting to a sale. Everybody wants a person inside the car business they can call. Your response when a customer talks about “their mechanic” should be, “What can I do to become that person?”
When I asked him what he thought, Coach Chris mentioned mindset. Advisors think there are too many things preventing them from completing the tasks they need to be able to sell more. That answer ties perfectly into the final item on my list!
A lot of service advisors have a victim complex. What I mean is, some advisors fall into the trap of thinking they can’t control the outcome of a situation. They’re so focused on the things they can’t control, that they wind up not doing the things they can, like asking what you can do to earn the customer’s business, or petting the dog, or following up with the customer before they have to call in and check on status. These are all things you should be doing. Things that you can control.
Speaking of focusing on things you can’t control, the first audience question of the day comes from Tom:
“Are there any written workflow and service lane operations that are written or best practices that I can be informed on? The reason I ask is because I believe I should have every right as a new advisor to have a customer drop their vehicle off as the next writer. On the 10th training day of my new OEM writer position, they tell me that another advisor gets the drop-off in the morning. I am genuinely concerned that I’m being taken advantage of because I’m the new advisor. I’m scared about the new position on day 11 when my survival is dependent on my ability to retain my customers. Any advice would definitely help me.”
Okay so first thing, Tom, we appreciate that you submitted a question so we’re going to send you a Service Drive Revolution care package but I’m going to have to be honest with you: you sound entitled.
Let me tell you about when I was an advisor – I used to come in on Sundays and write the night drops because there were so many of them. My manager at the time – in the Millionaire Service Advisor book, I changed his name to Dick because, well, he was one – was a complete moron.
One day, this idiot service advisor (let’s call him Thomas) who couldn’t write seven RO’s in a day to save his life complained that he didn’t get night drops. So what did they do?
They took all my night drops away and distributed them evenly to all the advisors.
Imagine their surprise when that new rule only lasted two weeks. Why?
Because Dick, in his laziness, didn’t understand that he was going to start getting a bunch of calls from customers whose cars sat there for a day and nobody called them. Customers would leave voicemails for Thomas and never get a call back.
I could have quit, I could have complained, I could have been entitled, but instead I just waited because I wanted to see what would happen. Turns out Dick would rather not deal with customer complaints, so after those two weeks I got all the night drops back, and was writing them again on Sunday.
The very fact that this scheme blew up in their faces proved my value to my boss in the end, right? So it was definitely worth it to grin and bear it.
My grandpa always used to say, “No matter what you’re getting paid to do something, if you try to give more than that, it’ll always work out for you.” Those are words I really try to live by, because someone who can go that extra mile will always be in demand.
So I ask you, Tom, to just flip your script a little bit, bro. If it’s not night drops, give your employer more than what they’re paying you for. Relax; concentrate on connecting with the customers and ask yourself what value you can add to the department, not what’s in it for you. Once you reframe your perspective and bring everything into focus, your luck will change – I guarantee it.
“Who has issues with lifetime warranty? I keep getting 1 hour or greater hold times. As you can imagine, CSI scores tank out and customers get upset when I don’t contact them but what other choice do I have? I had to take work home with me a few times ’cause of the hold times. I had to call on 4 different RO’s and was on the phone for at least 5 hours all the way until 8 P.M. when they closed… What do you guys do? I’ve been doing this for 3 years and lifetime has thrown me in f***ing circles. Also, how many customers are getting pissed when lifetime doesn’t cover parts anymore? How do you deal with that? I give them the number for customer complaints but I would like to see what you guys do. Thanks a lot. (No sarcasm.)”
Okay, so a couple things…
When I had extended warranties, I would dial the number when I was headed to work and just be on hold before opening because you could be on hold for 40 minutes or up to an hour like you said, right?
One thing I would do is have the warranty administrator handle these calls. It’s a lot easier for them because they’re not customer-facing, they’re just sitting at their desk. It’s hard for you, as an Advisor, to take another call when you’re on hold and waiting for that music to stop, so it helps to bring someone else into that process. As an advisor, you might not have the power to make that call, but you could at least propose to your GM that the warranty administrator make those calls for you.
Now, if you don’t have a warranty administrator, maybe there’s a cashier or somebody like that who can do it. If not, then you’re just going to have to do it yourself.
About lifetime not covering parts anymore, I would address that upfront and do something at the time of write up. Let them know in a very soft, subtle way that lifetime isn’t going to pay for the diagnosis, and some of the policies don’t pay for parts. You’re there to be the liaison and do your best to help, but it’s ultimately an outside warranty and not everything is going to be covered.
Learn from these mistakes, and stop falling victim to bad habits.