Monday, February 2, 2009

Super Bowl Exercise

You will be world champions with this mind game.

I have one service department that is breaking even or loosing money consistently. I consulted with Chris Collins at and developed a game plan. After careful review of my financial statement, we realized that the simple solution is increasing the labor rate. I need $20 increase in ELR to send my dealer to the Superbowl next year. More if we can.

Sounds easy.


Oh yes will be. Here is the game plan. I utilized my ROAMS tool.

First I went to Report 17 and chose FRH Frequency. I reviewed where my service advisors hit on the grid. Then I went to “grid design”. I input my target ELR and hit submit. It was that easy. I need to move the needle huge this month. I want to go from $120 per hour to $150 and send my dealer packin'. That was actually the easy part. And for anyone who has tried to get service advisor buy in, well the hard part is to come.

Step 2. I held a meeting on Thursday evening. All of my service advisors came from across the stores. We talked about our dealership profitability. Is it a sin for a company to be profitable I asked? Why else are we here? I submit to my service advisors that if the company is not substantially profitable, we are out of business and ALL of us will be in the unemployment line. That usually wakes them up.

Step 3. I shared with them the financial information of the company broken down by the Flat Rate Hour. Based upon 1 hour of service, I showed them the dealership profit (loss). It was an eye opener for everyone. And where on the surface one would think that a high line European store with an effective labor rate way over $100 would be swimming in the black, its just not the case these days. So as we walked through the exercise I could see their minds churning.

Step 4. I asked each advisor to write down what our dealership offered to our customers. List each service and list everything we do well. Our strengths. Then in the next column, I asked them to list the competition. Most advisors listed an entire page of our strengths. And they could only list ONE of our competitors. A perceived lower price. After a careful and jubilant discussion of our dealership and how great we are, I asked them to write one more item on their list. Their name.

“Is their any better service advisor better than you at sales” I asked. I hammered it home, “Is the tire guy better than you?” And as Nick Neumeyer from MOC Products watched on, the preacher in me rose up and we drove the devil out of my dealership. The devil is lower prices. We are going to sell work here! My service advisers were fired up to sell that night.

Step 5. With new grid in hand, and the first sale of the month, we sold a 9-hour job for $186 per hour.

Thank you and good night. I have a Service Advisor Sales meeting in the morning.

Steve Shaw

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