Monday, April 13, 2009

Sell the Sizzle

What a week. Service Managers I think you can identify with me on this one. A normal day for me goes like this:

1. Walk the Parking Lot everyday, touch every car and write on the windshield
2. Hold a production meeting everyday, talk about FRH
3. Hold a service advisor sales meeting everyday, talk about sales
4. Follow up on the Work In Process (WIP), close tickets
5. Review the Forecast VS. Actual, look at the money
6. Coach and Counsel the employees each day, baby-sit!

(For more information on my day, go to or click “MY Method” I have prepared sample checklist for each day, week and month)

Come on people what more do you want from me?

Now I must perform an inspection on each and every car and make sure that the service advisors do a walk around too. And just when you think you have had enough, Les Silver walks in the office to teach about MPi. Actually Mark Halterman, Business Development Manger, with MPi, showed up with his install coaching team on Wednesday to help take my store to the next level. I do not have time for this!

It gets even better. I was about as busy as a manager could be last week when Mark arrived. Not only was I doing everything as I listed above, I had two service advisors who needed extra attention. More baby-sitting. I just returned from picking up a car from a customer in Beverly Hills, interviewing an additional service advisor, and trying to keep the place together at the exact time the MPi crew shows up.

Now Mark began to tell me about the process workshops that were to take place. My blood pressure began to boil as he talked. We were to map out each process from “meeting and greeting” thru “write up” and presentation of the “MPi Know Your Vehicle Report” he said. Then he dropped the bomb. He also said that we should talk about the Service Advisor walk-around as well. I almost came unglued. I found myself giving every excuse why it could not be done. I found myself caught up in the day-to-day grind. And I am the Dealer-Coach. HA!

I actually considered making a run for the border, Mexico. How about Las Vegas? I considered Vegas however I just came back from there last weekend. Ok, now I am broke and my blood pressure is boiling. Anyplace but here was on my mind. I settled for a diet coke and a walk around the building, I cooled down and returned to my office.

Mark began selling me on the benefits of the entire process. In fact he did so well that I actually bought what he was selling. It made so much sense. It was exactly what I wanted; just said in a different way. I wanted to SELL THE SIZZLE. Sell the inspection (meaning offer it complimentary) to the customer at write up. Let the customer know, in advance, that we are going to perform a Quality Vehicle Inspection or as MPi says World Class Inspection. That was exactly what Mark was preaching to me. I was just not hearing him. Sometimes I just need a break or maybe a slap in the face to stop and listen to what someone is telling me.

Finally I agreed. Sipped my diet, stopped cursing and took a breath.

Mark, my service team and I worked through process documentation. We created our dealership playbook that evening. It took about 2 hours to develop. The next morning, all day and through the evening, Mark trained my technicians and service advisors. He trained on the MPi process at my dealership. He also trained on sales techniques too. We learned the benefit sandwich sales technique along with others.

Mark taught us one new technique called “Safety First”. He taught us to sell safety BEFORE the prime item.

I am confused…safety first?
Before the Prime Item?

(Stay tuned for my blog next week on this one)

Every person received the RULES of the game. Everyone had a chance to speak out on the subject too. When we were done, each one of my writers admitted they learned just a bit from Mark. That is a great compliment.

Les Silver, President and CEO of MPi even paid a visit to my store that next same day. His presence added credibility to the process and aided in the buy-in from my team. Overall my entire team appreciated the efforts of MPi. We got it done in the midst of all the confusion of running a car dealership service department.

Lets go back a month; we installed the MPi software at the dealership early March. My Key Performance Indicators (KPI's) were already off the charts. I even showed incredibly high usage of the QVI (inspection) op code. My team always inspects cars. The things that should have been up were up and the things that needed to be down were down.

I will admit that since the installation, all of my numbers are up even more. We set an all time record for gross profit and service net profit in March. I hesitate to put real #s on the blog as my dealer goes crazy. Also, utilizing the MPi tool, I am now looking more at process indicators than the actual up sell dollars. The dollars are there when the process is followed.

Did MPi do this? How much contribution did the MPi software have in this improvement? I cannot give you an exact answer. I can say that my team of service advisors is focused on the process of selling now. Obviously we are focused on improving our KPI’s and growing our customer pay business, however the process is where the emphasis is being placed.

These are the metrics that we now review:

• Does the service advisor request the vehicle inspection 100% of the time?
• Does the technician perform the requested vehicle inspection 100% of the time?
• Does the service advisor complete the “treatment plan and the recommended action plan” 100% of the time?
• Finally, is the customer presented with the Know Your Vehicle Report 100% of the time?

In my store, we are getting close to 100%. Close means World Class!

I can site many examples of the improvement we have seen; my favorite example of what MPI has brought to my dealership is this story:

On the Saturday before the launch of MPi, we performed an Oil Service on a 911 Porsche. We also did our Quality Vehicle Inspection and a warranty repair. The car was given a clean bill of health and we ordered a warranty part for the customer. The customer came back in on Wednesday, four days later, the first day of the MPI launch. The same technician RE-INSPECTED the car utilizing the MPi Tool. The technician was actually required to inspect the car and note his findings in the computer. Interestingly enough, he discovered the customer needed rear tires and rear brakes. My service advisor explained to the customer how we have a new program designed to improve our vehicle inspections and sold both the tires and the rear brakes. My hats off to the World Class Inspection Tool – not just the QVI op code!

In our Fixed Ops Manager Meetings, we no longer just talk about forecast vs. actual pace, account receivables and KPI's. We talk about being World Class. We talk about ensuring our place in the dealership world for a long time. We talk about all the other stores that are closing around us. We talk about how we must be different. We talk about PROFITS!

This comes with continuous steady improvement. Some may call it cliché I just nod and agree but inspect what you expect from your people. Hold your people accountable for the processes and the numbers will follow.

Steven Shaw www.

Go to and click My Method at the top and see the time saving checklist that I have created.

And stay tuned next week for a special article from…

Comments or suggestions?
e-mail Steve Shaw

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Friday, April 3, 2009

Successful in a Down Economy, One Dealership's Story

South Bay Ford is the #1 Ford Car/Light Truck Dealership in the Nation for Retail Parts and Labor Sales.

South Bay Ford Dealer Principal, Gary Premeaux (Primo) gives the credit to his talented Service and Parts Team. Gary and his team started out over 15 years ago in a small run-down location in Hawthorne California. Now Gary has a state of the art facility that sets the standard for new dealerships.

Let’s talk about the team that Gary Premeaux put together. Gary hired Bob Cawley 12 years ago from an Arizona Ford Dealership. Gary and Bob realized before most that retail was the way of the future. They created the retail standard that Ford Motor Company adopted as a pattern for their dealers.

After spending too much of his time entertaining friends that were waiting 90 minutes to get an oil change, Gary realized that things needed to be done differently. He challenged his service team to create a world-class service department that met customers’ needs. He demanded things like:

1) 30-Minute Oil Change Service Or its Free - The entire process (including Advisor walk-a-round, an oil change and vehicle inspection) was completed in 30 minutes or less. Only a handful was ever given away. The boys in the shop did a great job of getting the cars in and serviced.

All Technicians did oil changes. South Bay Ford was one of the few dealers that encouraged all Technicians to do maintenance. The Technicians learned that they could make money doing services and maintenance. Even the highly skilled “Master Technicians” found that they could sustain a consistent pay check by filling in their day with maintenance work.

Gary did have a standard; maintenance was not a loss leader! We needed to make money doing maintenance. He wanted to retain a minimum of 70% gross for service labor and 30% gross for parts on maintenance business. That percentage was sustained over the past 11 years.

This meant new pay plans for the Technicians. Each Technician had a maintenance pay scale, a repair pay scale and a fleet pay scale. The cost of labor (Technician Rate) was based upon our acceptable sell rate for labor in each category. It was a stable system with guaranteed returns.

2) Saturday Service
– The decision was made to open on Saturday and to provide full service six days a week. A creative rotating work schedule was implemented that allowed them to be at full staff every day of the week. All team members were given the opportunity to give their input in the new system. The new work schedule required hiring an entire team, as one team was always off duty. In the Saturday Marketing Plan, they did mailers, voice mail (before it was popular), distributed flyers in parking lots and made a real effort to have a successful launch. The first Saturday went so well that the dealership produced 224 Flat Rate Hours. That was more than any day during the previous week. It was an instant success.

3) Advanced Production Systems
- The dealership converted from a conventional dispatch system to a true Advanced Production System. Gary eventually brought in the team from ATcon, now M5, to teach and train the staff. Dave Vaden was the leader of that training. Bob Cawley and Dave Vaden instantly built a relationship. With Dave’s help they were able to improve the Labor Selling Gross to over 50% (Ford Financial Statement), another Premeaux standard.

4) Leadership in Customer Satisfaction - Gary insisted upon a strategy, close supervision to see that the plan was carried out and CSI incentive pay plans to ensure that his customers were treated right. Gary has been leading the Region with the number of customer surveys returned and CSI scores since the inception of South Bay Ford.

And this was just for starters. Premeaux had a clear vision for the future and he set the tone for the Parts and Service Departments. Even back in 1996 Gary was designing the “New South Bay Ford”.

The fun part of this article for me is that Gary and Bob hired this kid named Steve Shaw to be their Service Manager during those early years. It was exciting for a young kid to work with and learn from this talent. I remember those grueling meetings with Gary, he never settled for anything but the best from his managers. Gary also encouraged me to complete my MBA. Gary has a way of getting the best from his managers. Obviously it works! I stayed with Gary for about 3 years before setting out on my own as a consultant. I never worked in the new dealership however I visit whenever I can. Bob Cawley always had time to buy me a burger at Hanks Bistro Cafe, located in their waiting room.

Bob and I developed “PIG Meetings”. “PIG’s” is an acronym for “Process Improvement Groups”. Every Thursday the managers bring up the entire staff, in small groups, and have a free exchange of information concerning everything in the dealership. We were able to change our world because we talked to our staff. We listened to their needs and created an environment of trust and accountability for everyone.

The service department was soon growing beyond belief. The dealership hit its low point in February of 1996 when they flagged just 2,800 hours. Today the dealership produces between 7,500 to 8,000 hours per month at the new freeway location and 2,000 to 2,500 hours at their Fleet Service Center. That is an awesome improvement.

In 2005 Gary built his New South Bay Ford. It now sets the standard for new car dealerships. Building a dealership like this is no small task. Every one must be on board and understanding the clear vision. Bob kept his employees informed with PIG Meetings for years.

Premeaux, who never settles for second best, hired Ron Kiepke to manage his multi-million dollar parts inventory. Gary truly understands what fixed operations will do for a dealership. Recently, Premeaux closed his other location, Ford West, and opened a new Fleet Service Center. This truck center is located in the old building. Big trucks and fleets are essential to any city, especially in Los Angeles. The dealership services most of the LAX Airport support, the local city governments, police and sheriff vehicles, taxi cabs, buses and even limousines make their way to his fleet shop. In total, South Bay Ford has 130 Service Bays, 60 Technicians, 12 Service Advisors and a very competent support staff.

After 12 years as Director of Fixed Operations, Bob Cawley resigned to spend more time with his family in Arizona. After consulting with Bob, Gary promoted Ron Kiepke to Bob’s old position. Paul Gipple was promoted to fill Ron’s old position as Parts Director. With these highly skilled and experienced professionals in place and a tried and tested system to operate, the dealership is poised for the future.

Only the best is in store for the future of this Ford Dealership. Congratulations to Gary Premeaux and his team at South Bay Ford for becoming the #1 dealer in the entire country for retail parts and service sales. GREAT JOB!!

Co-Authored by Steve Shaw and Bob Cawley

Comments or suggestions?
e-mail Steve Shaw

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