Why Less is More For Service Managers

by | Jun 22, 2020 | Auto, Podcasts, Service Drive Revolution

Less is more. It’s a pretty common phrase that gets tossed around (maybe a bit too often), but it’s true…. Especially in business. And nowhere is that more obvious than the subject of conversation on my monthly call with our Elite Service Manager Group. Our Elite Service Managers shared something that absolutely shocked me, but that makes perfect sense.

But first, I’ve got a funny story about jet skis.

Bear with me here.

So I wanted to buy two jet skis and put them up in my grandfather’s old garage in Washington for when I go to the lake, because they’re a pain to rent and I have some fun planned up there for this summer.

I was fancying two Sea-Doo’s so I called around and I got a hold of the dealership closest to where my mom lives up in Washington and said, “Hey, I want to buy two jet skis. Your website says you have these two in stock. How much?”

Then a salesperson gets on the phone and says, “You know they’re discounted right now. We took $500 off.”

“Okay, cool. So let’s do it. I want two of them. I’ll wire you the money and I’ll have somebody come pick them up.”

“Oh, well, we’d have to locate the other jet ski, and you have to put a deposit down to locate them. There’s a shortage right now because of COVID. The factories have been shut down and nobody has jet skis, so it’s hard to find them.”

“Okay, well, first of all…. I don’t want to give you a deposit if you can’t guarantee you’ll find them. Second of all, not to give you unsolicited business advice, but why are you discounting something that’s in short supply?” 

It’s summertime… Jet skis are popular during the summer. Obviously, even the moron that I am, I’m calling to buy jet skis. Why would you lower the price and discount them another $300 when you don’t have them in stock? Am I missing something??

Low supply, high demand should equal higher prices. If you don’t have a lot of it, it shouldn’t get cheaper! That’s not rocket science!

So as I’m sure you guessed, no jet skis have been purchased, but that story was funny to me, and let me tell you why.

I was reading an article about General Motors and how trucks are in short supply. Later that week, I was on a strategy session with a Service Manager and a Dealer for a Chevy dealership in Canada. I asked the Dealer, “I heard there’s a shortage, is that helping your grosses?”

Do you think they’re discounting? Absolutely not.

“Yeah, our front end gross is back to pre-COVID levels.”

I just think that it would be really nice if one of these American companies like Ford or GM would step up and fix their whole supply chain. COVID’s kind of a chance to reset so why not flip your supply chain and compete with Tesla? Start producing cars as people order them instead of giving dealers all this inventory, the flooring expense, and the erosion of gross profit on the front end. Why don’t you flip it right now?

If they don’t have cars, let’s just get customers to start ordering them, hold the gross, and save the dealers the flooring expense. Flip the whole script! We say it over and over again but nobody wants to talk about it: Tesla’s advantage in the marketplace is they don’t have flooring expense!

God, can you imagine how many people would hate me if I was the CEO of General Motors?

“That won’t work! You don’t know what you’re doing!”

Meanwhile, I think I could give Tesla a run for their money. I don’t think it would take me that long to fix it. I would just have to hire some people from Apple and Tesla and think a bit differently.

Speaking of thinking differently, Car & Driver recently released their Greatest Cars of All Time list, and boy is it different to say the least. I’m just going to tell you because you would never guess in a million years:

1955 Chevrolet

1957 Lotus 7

1960 Austin Mini

That’s it. Those are the three on the list.

I get the inclusion of the ’55 Chevy. That was a game changer because of racing. It was Chevy’s first victory and it kind of eventually became the Corvette. I could understand that being one of the most influential cars of all time, for sure, but how do you rule out the Model T and the Volkswagen Beetle??

It’s one of those conversations like greatest quarterback of all time or greatest album of all time…. It’s really hard to say.

But what do you think? We want to hear from you! Find this week’s episode on YouTube and post in the comments what you think the greatest car of all time is, and we’ll pick one.

Whoever gets picked will be sent some swag: a Service Drive Revolution T-shirt, mug, and a hundred bucks. We want to see what you think, because I’m a little stumped. If you just asked me that without this weird list, I could have come up with a bunch, but this list makes me question myself. It’s weird but also kind of interesting…

Let’s move onto some questions. Not comments! Questions.

“Hi, Chris and Jeremy. I got a question for you guys. I work at a Ford dealership that also sells used cars. I’ve had a hard time getting my Technicians to work on anything other than a Ford. Any tips on how to get the mindset changed in the shop so we can get our customers taken care of? All your advice is greatly appreciated.”

Okay, I’m gonna need you to listen real carefully:

Hire a used car Technician. 

That’s it. 

You don’t need to get them to do the work. Hire a used car Technician and lower your gross. If you run an ad for a used car Technician, you’ll get a lot of people applying, because it’s a job a lot of Technicians want.

The technology’s passed them by, but they’re good at reconditioning used cars. You can pay like $20-22 an hour and they’ll produce. They can also take overflow from the shops so they can do other stuff so I say, don’t try to convince them to do it. Hire a used car Technician and watch what happens like magic.

Your Technicians are going to go, “Oh, we would have done that. Why’d you hire the other Technician? We want to do it.”

Then you can maybe get rid of your lowest performing, pain-in-the-ass Technician. We’ve ran into this in Ford stores where they specialize. What that means is there will literally be Ford Technicians that are just suspension and they only want to do suspension. If you give them an oil change or brakes or anything else, they’re like, “Nope. I’m only doing suspension.”

And they sit around and they complain about not having suspension work, but they don’t want to do anything else. And then their wife’s car breaks down and all of a sudden they know how to do brakes and water pumps!

“Hi, Chris, big fan of the podcast. I recently got my first dealership job in Knoxville as a Service Dispatcher. I’m still learning the systems and flow of the shop, but would love any piece of advice for a new guy coming in that wants to keep service running smooth between Technicians and Service Advisors. I appreciate your content and hope to hear from you.”

That’s a good question. How can a Dispatcher make a difference?

Don’t try to be liked. Accept that it’s not a popularity contest and that the game is about production. The fact that you’re asking this question is amazing, but you could still transcend to a really good Dispatcher.

I would have a morning shift meeting. If all the Technicians start at 8, I would have a little huddle with everybody at 7:45. I would make sure that you have a job for every one of them. Have the jobs and cars pulled into their stall already before they get there.

Then, I would have a board up in the shop with everybody’s hours. So their hours from the day before, their total hours for the pay period, and total hours for the month. Update it everyday, and I would also gamify. Get some sort of trophy or something like that. Have a trophy for whoever has the most hours or efficiency every month.

Talk about it at the shift meeting – ask them how you can help them – but make the focus of everything that you do like how do we get more hours to the shop and take care of our customers?

Another thing you could do, too, is put pictures of customers out through the shop and remind everybody that there’s a mom with a kid behind this car. There’s a dad that coaches football or soccer, whatever it is, but there’s people just like us driving those cars. Never forget how important what we do in the shop is to their safety and the reliability of the car.

Yet another thing you could do as a dispatcher is rerack some cars and make sure that the inspections are consistent. I’ve never seen a dispatcher do that. And be nice to the Service Advisors; communicate with them, know that the Service Advisors are going to make everything a waiter to get it through dispatch.

You’re going to get gamed a little bit by the Service Advisors, so just call them out on it and be honest. You got to be fair, but good question. I really liked it.

So we have a Coaching Group for Service Managers where they compete in a monthly competition called Top Dog Underground. Once they’ve achieved top of the industry profitability, they have the best CSI, and they win our competition, they are allowed to join the Elite group.

It’s actually really exclusive, because it’s so hard to get in. 

Anyway, we have a monthly call with the Elite group to check in and see what the Elite Service Managers are up to. This was especially important during COVID, because they’re the gold standard for Service Managers, legitimate industry leaders, and they’re a great indicator for how the industry is adapting.

So we were going through everybody’s numbers, and we started to notice how many Service Managers cut their staff by as much as 20-25%. During the pandemic, we knew a lot of people were furloughed and laid off and the industry was hurting, but seeing it all laid out like that was shocking to say the least. 

More shocking was the fact that their Service Departments were all doing bigger numbers than they were pre-COVID, even in spite of their layoffs and downsizing. They’ve gotten rid of a couple of Technicians that weren’t performing, they’ve gotten rid of a Service Advisor that wasn’t performing, and they’re doing more with less people! It’s incredible.

There’s people that just aren’t productive. They’re not adding to the bottom line, but we don’t want to make tough decisions and so the dead weight had been allowed to stick around until COVID came through and changed everything.

What’s even more interesting is that some of them have closed on Saturdays, too, and they don’t think they’re going to bring Saturdays back until the end of the year. I think it’s because a lot of customers aren’t consistently working, so a lot of the Elite Service Managers really embrace the idea of going and picking up customers’ cars to the point where Saturdays are less of an issue. Their expenses have gone down dramatically – their overhead by covering just five days instead of six – and nobody thought that would be a long-term trend through the end of this year, but it’s at least helping with expenses now.

So reminder: tell us in the comments what you think is the most industry-changing car of all time. We’ve got a contest for a hundred bucks and some Service Drive Revolution swag, and I’m going to read the best responses on the show. I’m curious to see what you guys think. I was going to say the Chevy Citation because that was my first car, and I did a lot of bad things in the backseat of that car…

Anyways, we’re excited to see what you guys think are the cars that revolutionized everything, and we’ll see you again next time on Service Drive Revolution!

1 Comment

  1. Jesse James McNichol

    I know that this moment has passed, but i just wanted to add my two pennies worth to the Greatest Car Ever talk because we were talking about this same article at my store –

    One of my first cars was the 1980 Jeep Wrangler CJ-5. I was a poor college student who minimal money so i bought it for $500 only because I could. I liked it, but I had no idea it would change my life, literally. It was big, ugly and loud with nearly 200k miles on it. The floorboard was rusted out to the point you could watch the road float by underneath your feet as you drove. It burnt oil like nobody’s business. You could hear me coming from a quarter mile away and smell the exhaust long after i was gone.

    But as a college student scooting around the cornfields of DeKalb, Illinois at Northern Illinois University, it was the greatest thing ever! Before college, I served in the Marine Corps and got trained in and around HUMVEEs. The connection to the military brought a tear of joy to my prideful heart each time. Taking the jeep apart from doors gone to lowering the windshield, complied with the enormous lift and lights attached and extremely loud engine, i was sure to be seen by all before heading into the cornfields to create havoc amongst the local farmers (notice i didn’t say before heading to class? HA). Girls wanted me, and guys wanted to be me as i cruised up and down campus happy to pick up and drop off the local sorority girls. Everyone was sure to know that that Jeep belonged to a local legend and icon that was created by the Jeep itself.

    Between the military connection and adaptability and customization of Jeep Wranglers, i would have to say this is by far one of the most influential vehicles ever created. Just look at how little the style has changed over the decades of usage. Sure they have amped up the technology and everything, but when you see a Jeep Wrangler, everyone knows thats a Jeep (not the Cheerokee or the Liberty or the whatever else Jeep creates). There is only one Jeep – the Jeep Wrangler.

    Thank you for my rant – I am and always be a Jeep guy . . . even if I work at a Mercedes dealer! Shhhh!

    Reply

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