Don Reed - 18th Digital Dealer Conference & Exposition

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Maximize Your Service Growth With
5 Simple Rules
Presented by: Don Reed, CEO, DealerPro Training
Don Reed | DealerPro Training | CEO | [email protected]
Question?
Is it possible to increase traffic and improve
owner retention with an average CSI rating,
while lowering sales and reducing Net
Profits?
In other words, can a successful marketing
campaign result in your dealership losing
money?
Don Reed | DealerPro Training | CEO | [email protected]
Consider the Following

Average monthly customer pay RO’s = 1,000 @ 1.5 HPRO

Marketing Campaign Produces 10% increase in RO’s












100 Additional Incoming Service Calls
100 Additional Service Appointments
100 Additional Maintenance Menu Presentations
100 Additional RO’s to Dispatch
100 Additional Vehicles to Inspect
150 Additional Technician Hours
100 Additional Vehicles Requiring Parts
100 Additional Vehicles to Park
100 Additional Outgoing Phone Calls for Advisors
100 Additional Customers to Cashier
100 Additional Active Deliveries
100 Additional Next Appointments to Schedule
Don Reed | DealerPro Training | CEO | [email protected]
Marketing Case Study
Start Up of New Quick Lube Center
Midwest Dealer -2012
Labor
Sales
Parts
Gross Margin Sales
Sales
#
Gross Margin RO CPRO's
ELR
HPRO
Total
Gross
7 Months-11 $924,640 $707,888
77%
$763,474 $307,215
40%
$235
7,265
82.05
1.6
$1,015,103
7 Months-12 $802,587 $578,481
72%
$733,768 $270,791
37%
$193
8,001
80.34
1.3
$849,272
-4
-$29,706 -$36,424
-3
-$42
736
-1.71
-0.3
-$165,831
-8%
-18%
10%
-2%
-19%
-16%
Variance
-$122,053 -$129,407
Percentage
-13%
-18%
-5%
-4%
-12%
736 New Customers Produced a Net Loss of $165,831
How Can You Prevent This From Happening
in Your Dealership?
Don Reed | DealerPro Training | CEO | [email protected]
4
Follow These 5 Simple Rules
Rule #1 – Define Your Marketing Plan Goals
Rule #2 – Evaluate Your Capacity for Growth
Rule #3 – Train Your Service Team
Rule #4 – Measure Performance Daily
Rule #5 – Prepare a Profit Improvement Plan
Don Reed | DealerPro Training | CEO | [email protected]
Rule #1:
Define Your Marketing Goals

Increase Customer Pay Traffic

Improve Customer Retention

Raise CSI

Increase Sales

Build Net Profits
Don Reed | DealerPro Training | CEO | [email protected]
Rule #2- Evaluate Your Capacity for Growth

Shop Productivity (Total Hours Billed Divided by
Total Hours Worked - Benchmark @ 120%)



Number of Technicians




Current Shop Productivity % ____
Goal for Shop Productivity % ____
Current Number _____
Need to Hire _____
Skill Level _____
Number of Service Bays _____


Number of Lifts _____
Need to Add _____
Don Reed | DealerPro Training | CEO | [email protected]
Rule #2- Evaluate Your Capacity for Growth

Customer Driven Processes


Parking Spaces
Service Reception
•
•
•

Cashier Process
•
•

Number of Service Advisors (12–15 customers per day)
15 Minutes Per Customer
Service Greeters
Back-up Plan
Service Advisor?
Waiting Room Capacity
Don Reed | DealerPro Training | CEO | [email protected]
Rule #3-Train Your Service Team
3 Customer Touch Points
1.
Phone Calls
2.
Walk-ins
3.
Website
Don Reed | DealerPro Training | CEO | [email protected]
Shocking Facts About
Service Writers
81% of all Customer Pay Labor Comes From the Phones
86% Try to Diagnose the Customer’s Concern on the Phone
81% Quote Mechanical Repair Prices Before They Know
What’s Really Wrong
95% Quote Higher Prices Than Independent Shops, Allowing
the Customer to Shop other Places
57%
Do Not Offer the Customer an Appointment
The Aftermarket Does Just the Opposite
Don Reed | DealerPro Training | CEO | [email protected]
Rule #3 – Train Your Staff for Growth
1. Phone Calls – Incoming
•
Appointment Coordinators/Call Center
NOT Advisors = More Appointments!
•
Do NOT Quote Prices for Mechanical Repairs
over the phone
•
Avoid Diagnosing Over the Phone
•
Sell Appointments at 15 Minute Intervals
Don Reed | DealerPro Training | CEO | [email protected]
Rule #3 – Train Your Staff for Growth
2. Walk-ins – Drop offs & Waiters
•
Never Say NO
•
Can Do Versus Can’t Do
•
Allow 20% of Schedule for Walk-ins & Up-Sells
•
Must Have Capacity to Sell
Don Reed | DealerPro Training | CEO | [email protected]
Rule #3 – Train Your Staff for Growth
3. Website
•
Interactive Online Maintenance Menus
•
Current Service Specials
•
Build Value in Your Dealership Services
•
Online Appointment Scheduling
Don Reed | DealerPro Training | CEO | [email protected]
You Can’t
Manage
What you Don’t
Measure
Don Reed | DealerPro Training | CEO | [email protected]
Rule #4 – Measure Performance Daily

# Of Incoming Calls

# Of Appointments

Service Advisor Daily Performance Tracking

Performance Board for Advisors

Technician Daily Performance Tracking

Performance Board for Technicians

Track Sales Results by VIN #

Marketing ROI Profit Pro Forma
Don Reed | DealerPro Training | CEO | [email protected]
Rule #4 – Measure Performance Daily

# Of Incoming Calls



Going Up – Going Down – Stagnant
Record Phone Shops for Accountability
# of Appointments



Schedule 15 Minutes Apart by Advisor
Sell 80% of Capacity Per Day
Follow-up on All No Shows to Reschedule
Don Reed | DealerPro Training | CEO | [email protected]
Rule #4 – Measure Performance Daily
Service Advisor Performance

Average # RO’s per day, per Advisor



Customer Pay & Warranty Customers @ 12 – 15
Internal RO’s – What’s Your Policy?
Service Advisor Performance Metrics






Margins - Labor @ 75% & Parts at 42 – 45%
Sales Per RO
Hours Per RO
Month to Date Sales and Travel Rate
CSI Trends
Closing Ratio – Upsells vs CPRO’s
Don Reed | DealerPro Training | CEO | [email protected]
Rule #4 – Measure Performance Daily
Technician Performance

Productivity

# of Hours Produced vs # of Hours Worked

# of Multi-Point Inspections Completed

# of Additional Service Requests

Total Gross Profit Produced MTD

# of RO’s – Customer Pay, Warranty & Internal
Don Reed | DealerPro Training | CEO | [email protected]
Marketing ROI Without Training
# CPRO's
HPRO
Increase/Decrease
ELR
CP Labor Sales
Margin
CP Labor Gross
P/L Ratio
CP Parts Sales
Margin
CP Parts Gross
Total CP Gross
Cost of Marketing Per Month
Variable Gross Profit
Increase/Decrease
Annualized 12 months
Current
Plan A
500
1.3
550
1.1
-0.2
$85
$51,425
75%
$38,569
90%
$46,283
40%
$18,513
$57,082
$2,500
$54,582
-$6,745
-$80,943
$85
$55,250
75%
$41,438
90%
$49,725
40%
$19,890
$61,328
$61,327
n/a
NOTES: Assume CRM process produces a 10% increase in RO count for $2500 per month
Plan A: RO count increases 10% to 550---HPRO declines by .2 produces ROI of -270%
Don Reed | DealerPro Training | CEO | [email protected]
Marketing ROI With Training
# CPRO's
HPRO
Increase/Decrease
ELR
CP Labor Sales
Margin
CP Labor Gross
P/L Ratio
CP Parts Sales
Margin
CP Parts Gross
Total CP Gross
Cost of Marketing Per Month
Variable Gross Profit
Increase/Decrease
Annualized 12 months
Current
Plan A
Plan B
500
1.3
550
1.1
-0.2
$85
$51,425
75%
$38,569
90%
$46,283
40%
$18,513
$57,082
$2,500
$54,582
-$6,745
-$80,943
550
1.3
$85
$55,250
75%
$41,438
90%
$49,725
40%
$19,890
$61,328
$61,327
n/a
$85
$60,775
75%
$45,581
90%
$54,698
40%
$21,879
$67,460
$2,500
$64,960
$3,633
$43,599
NOTES: Assume CRM process produces a 10% increase in RO count for $2500 per month
Plan A: RO count increases 10% to 550---HPRO declines by .2 produces ROI of -270%
Plan B: RO count increases 10% to 550---HPRO remains the same produces ROI of + 145%
Don Reed | DealerPro Training | CEO | [email protected]
Marketing ROI With Training & Profit
Improvement Plan
# CPRO's
HPRO
Increase/Decrease
ELR
CP Labor Sales
Margin
CP Labor Gross
P/L Ratio
CP Parts Sales
Margin
CP Parts Gross
Total CP Gross
Cost of Marketing Per Month
Variable Gross Profit Per Month
Increase/Decrease Per Month
Annualized Profit Improvement
NOTES:
Plan A:
Plan B:
Plan C:
Current
Plan A
Plan B
Plan C
500
1.3
550
1.1
-0.2
$85
$51,425
75%
$38,569
90%
$46,283
40%
$18,513
$57,082
$2,500
$54,582
-$6,745
550
1.3
$85
$60,775
75%
$45,581
90%
$54,698
40%
$21,879
$67,460
$2,500
$64,960
$3,633
550
1.6
0.3
$85
$74,800
75%
$56,100
90%
$67,320
40%
$26,928
$83,028
$2,500
$80,528
$19,201
-$80,943
$43,599
$230,412
$85
$55,250
75%
$41,438
90%
$49,725
40%
$19,890
$61,328
$61,327
n/a
Assume CRM process produces a 10% increase in RO count for $2500 per month
RO count increases 10% to 550---HPRO declines by .2 produces ROI of -270%
RO count increases 10% to 550---HPRO remains the same produces ROI of + 145%
RO count increases by 10% to 550--HPRO increases by .3 w/training, produces ROI of + 768%
Don Reed | DealerPro Training | CEO | [email protected]
Rule # 5 Profit Improvement Plan
Define Your Goals
Evaluate Your Capacity
Train Your Personnel
Measure Performance Daily
Track Marketing ROI
Don Reed | DealerPro Training | CEO | [email protected]
Contact Info
Full Name:
Don Reed
Company:
DealerPro Training
Job Title :
CEO
Email:
[email protected]
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