The New Normal – Part II
I stated in Part I, and I still believe, that people are not excited about a new normal. However, they are excited about going back to as close to normal as possible. But is back to normal worth getting back to? Is back to normal the best thing for your customers?
Somewhere between 80 to 90 percent of automotive dealership service departments were under performing prior to the virus and delivering subpar service and experience to their customers. You need only to look at the metrics to see the evidence.
Customer paid repair order averages where in the 1.3-hour range including oil changes. Effective labor rates were in the 68 percent of door rate range. Customer retention was hovering just below 29 percent. Only 20 percent of service drives had a walk-around program and less than half of those were executed 100 percent of the time. Less than ten percent of service departments had any formal sales and/or customer service training programs or systems that were used across the board by all employees. Over 90 percent of service advisors had never attended or been to a sales training class. The same percentage had never read a sales book. Sixty percent of the work found when using a multi-point inspection was never presented to the customer. Over 70 percent of the drives that possess tablets and other tools to enhance efficiency and customer experience, underutilized these items or did not use them at all. Finally, nearly all the service departments that invested in expensive software programs underused, misused, or simply did not use this valuable technology.
So, I ask you this: Do we as an industry really want to go back to the old normal? Wouldn’t it be better to stand up and finally take control of these departments? Wouldn’t you be better off creating a new normal and a department that is highly efficient, highly profitable, and one that delivers a truly world class experience for your customers? Isn’t it time to stop the lip-service and eliminate the excuses? Isn’t it time to roll up your sleeves and finally make things happen? This virus has giving you the perfect opportunity to establish a new normal that can be outstanding. This new normal can create a business environment where everyone wins.
What would that look like?
- For years, I have said and still believe, that there is not a service drive out there that can’t deliver at least 2.5 hours per customer paid repair order including oil changes. If you are not at least at 2.0, you should be embarrassed.
- Effective labor rate should be within 90 to 95 percent of your door rate.
- Customer retention should be at a minimum of at least 80 percent.
- Survey scores should be in the top five to seven percent of the nation within your brand.
- For every 50 vehicles you take in, you should have no more than one disgruntled customer or “heat case.”
How do you deliver these results?
- Stop listening to your manufacturer reps and others who tell you these numbers are not possible and start listening to the people in the field who can prove to you that they are achievable.
- Stop thinking that the one dealer in your “Dealer 20” group who has the numbers I’m suggesting is some kind of superhero or possesses a secret potion. They are not and do not. They simply work smarter and harder than you and they are not afraid to hold their staff accountable to what they know and believe is possible. Therein lies the power. That is the secret.
- Invest in or create a true selling process for your staff to follow and hold them accountable to following it. The new process should instruct your staff on how to sell your dealership and all of its amenities, especially customer service. This should include, but no be not limited to, telephone training, goal setting, customer greetings, and how to ask proper diagnostic questions. It should also include training in the art of building rapport, performing a walking-around inspection, making a benefit-based presentation, closing sales and handling objections, updating and communicating with customers, writing a proper text and email, and conducting a follow-up.
Explain to your staff why you are making these changes and how it will affect them, your customers, and the business overall. As we continue to move out of the virus and back to normal, I encourage you to step up, take control, and create a truly new normal that your customers deserve and that they will overwhelmingly embrace. I want you to imagine the day when you walk into your service department and you are at or above 2.5 hours per customer paid repair order, including oil changes. Imagine the day when your effective labor rate is within 90 to 95 percent of your door rate and your customer retention is at 80 percent or above. Imagine the day when you have survey scores that place you at five to seven percent in the nation for the manufacturer you represent. And imagine the day when you have no “heat cases” or disgruntled customers. Imagine it because what you imagine can happen and will happen, if you stop the lip-service, roll up your sleeves, and take the first step toward making it happen.
When people return, they will want to go back to normal. Let’s make it a new and improved normal. You decide what that normal is for your business. In my opinion, that new normal should be what the old normal never was. You must set high standards for yourself and seize this opportunity. You need to educate yourself and your employees as to what true world class service is, provide training that results in the delivery of that world class service, and ultimately hold yourself and your employees accountable to ensuring that these things get executed with every customer, every time.
Challenge yourselves and make the new normal something to be excited about as you reveal the best version of your business to your customers. Everyone has been through a very difficult time, but it is no secret that through adversity, great things happen. Make this a time of growth and discovery. You have the opportunity to create and define normal for your business. Don’t be blind to it and certainly don’t avoid it. Take it by the horns and ride it to the next economic boom.