The last time we met we talked about being in a rut. I believe it. The problem is that you do too.
Shopping is not a “male” thing. I tease that we are missing a DNA strand or something. We typically know what we are looking for or what we want or need, go to a store, look for it, find it, and then go the cash register and buy it – short and sweet and easy. Right?
Well then stores started cutting back on their support staff, the sales people on the floor, perhaps even the number of check out cash registers. Just as you did starting in the 1980’s when interest rates skyrocketed and Paul Volker was trying to kill inflation. All of the sudden the sale per employee metric became religious. It got a following. Oh I know I support standards of performance and one of the key performance indicators in a parts department is the standard of performance. However, there are many nuances to the number.
The variables sometimes are overlooked – like the average dollar value of the transaction, the weight of the parts, the number of pieces sold per part number, the time of year, and the pay package of the parts employee.
The standard that the AED, Associated Equipment Distributors, publishes is $600,000/employee/year. That today is still a pretty good standard as an average result. But we have to be careful of the usual suspects. A man drowned in a river of average depth of one foot. The $600,000 is based on a pay package of $42,000/year. Is that the average salary, commission and benefit package cost for an employee in your parts department? I don’t even need to go further. In some parts of the country this might still be in the right range but you need to do the arithmetic.
The same “male” genetic defect exists in our customers. They don’t like to be kept waiting for you to answer the telephone, or to acknowledge their presence when they walk into your store, or to wait while you go find the part in the warehouse. They want good service. So I acknowledge that good service is a person thing and that what is good for one person is not necessarily good for someone else. That is what makes customer service so difficult. It is the gap between the expectations that the customer has and the perception of what they got. That can only be satisfied by talented, caring, empathetic and skilled people in the correct number on the job. How do you stand up? The time is now.
Training Tidbit #1
Training has long been a problem for many dealerships.
On the other hand
In the years since 2008 – which I will label “BBS” – “Before Bear Stearns” dealerships have reduced their expenditures on employee training dramatically.
We offer management training through associations and directly to manufacturers and dealers for Parts Management, Service Management, Parts & Service Marketing Management and Product Support Selling via a Company called Quest, Learning Centers. We have developed nine programs each of which is a fifteen hour training class. These Quest classes had an average attendance of 25 to 30 managers and supervisors in our “class room” sessions. Since 2009 that number has fallen to from 10 to 15. One of the many different advantages from class room learning is the interaction between attendees both in the room and after hours.
Our response to this reduction has been to produce and provide alternative forms of learning; The Webinar and Internet Self Study.
As an educator I am not happy with the webinar format. I cannot see the learner. I don’t know if they got it or not. I don’t know if they are paying attention of not. But I have created sixteen webinar classes; eight for parts and eight for service. We offer each of them twice a year, each of them lasts about an hour. Technology is advancing and we now have available a format where we can see the attendees on a webinar and they can see each other and the instructor. On Self Study we have been slow to get to market. It has been a learning curve but we are in the final phases of introducing our internet self-study programs. There will be four for the parts group and four for the service group and each program will take from four hours to six hours to complete.
I believe in learning. I believe that each individual has a responsibility to continue their education through their complete life. I live that belief too. I hope you agree with me and will join me in encouraging everyone to continue their personal development through attending learning sessions whether it is in a classroom or some other format. The time is now.
Marketing Missiles v1.9
Marketing is a broad topic covering a lot of different sins. It is mass mailings, it is seasonal cards, it is monthly or bimonthly newsletters, or quarterly specials. It is promotional materials and handouts. It is sales catalogues. It is also CRM (customer relationship management) systems and sophisticated information reporting. It is a bunch of stuff.
In columns I write and other documentation I have been stressing the new forms of marketing being taught at schools of higher learning, in marketing undergraduate and master level degrees. It is called “relationship marketing.” The educators and schools are acknowledging that marketing is about building and nurturing relationships not just all of the stuff listed above. Week I don’t think that is going to come as any surprise to any of you in the business. We all know that business is people to people. So our marketing efforts need to take on a much more serious tone.
We need to “touch” our customers more frequently and with a higher level of skills and quality.
The first order of business is to have a specific purpose for the “touch”, the call. Each and every time you “touch” the customer you have to have a reason that the customer will understand is aimed at reducing their owning and operating costs. The call should be about them – not you. You are providing a service to the customer. You are looking out for their best interest. What do they use of your services? What parts aren’t they buying from you? Who are they using if they don’t use your services? Are you monitoring the operating cost per machine hour? Are you advising the customer to trade in the machine when the costs are too high on a monthly basis? These are all part and parcel of marketing – the new marketing; Relationship Marketing. We will deal with this in much more depth in the weeks ahead. The time is now.
Service Statement v1.8
The comparison in the last service blog to the doctor is a clear statement on how I view the responsibilities of a service department.
That to me is very clear, straight and to the point.
And I also believe that without properly conducted maintenance as prescribed in the owner and operator manual we cannot achieve those objectives. But today more than ever I am excited. With telematics we will be able to monitor equipment all day long. We will know how many hours it is working, how long the engine is idling, if the filters are clogged; we will know everything.
Imagine that world. You will have a “mission control” – walls of computer monitors on the walls, each representing a machine, with people manning the “support center” 24/7. You will be able to “alert” the customer to anything and everything about their machine that is abnormal or needs attention. This will become a new service for you to offer. And guess what? No one else will be able to do this for your branded equipment. Very rarely do we get second chances in life but this is clearly a second chance for you to obtain and retain service market capture rates. The question is now in the air. Will you take advantage of this second chance? I sure hope so. The time is now.
Parts Pondering v2.1
I will assume that you have the correct number of skilled people in your parts department, now we need to look into what it is that they do. This is about much more than the parts order processing factory isn’t it? It is about more than answering telephones and greeting customers who come into your store. It is more than managing the instore merchandising displays. It is much more than inventory management and warehousing. Isn’t it?
It is about selling too I think. Don’t you? So how well trained are your parts personnel on selling? Do they have selling skills? Have they had sales skills training? Do you have product knowledge? How well versed are they on your competition? How well do they overcome objections? Can they close a deal? I hope so as it is in their hands that your success will come.
Many dealers know and give lip service to training. Don’t fall for that. Or said more bluntly don’t go there. You need to have monthly meetings with your parts personnel. You need to review product knowledge, review processes and talk about matters of interest at the moment. You need to do this regularly. Do you?
Oh I know it is work. It is supposed to be which is why work is a four letter word.
Have your supplier’s representatives attend the meetings. Go further and have them contribute to it either with news or a training session. Organize the meeting so that it is never longer than ninety minutes. The employees need to have a clear understanding about the commitment they are making and not have you run over all the time. This will build a team of talented people who will understand that you are making and investment in their future and they will contribute to your future as well. The time is now.
WH Filosophy v1.4
In the cellars of the night, when the mind starts moving around old trunks of bad times, the pain of this and the shame of that, the memory of a small boldness is a hand to hold.
John Leonard, American critic
Friday Filosophy #31
A man who correctly guesses a woman’s age may be smart, but he’s not very bright.
Lucille Ball
All you need is love. But a little chocolate now and then doesn’t hurt.
Charles M. Shulz
Under capitalism man exploits man; under socialism the reverse is true.
Polish Proverb
The time is now.
Management Musing v1.9
I want to talk about tomorrow today. I want to look into the future and try to make some determinations about what management and leadership will be like in 2050 or so. I know that I am setting myself up for some ridicule but there are some truths I want to explore.
This started with the birth of my grandson in 2005. You see boys that were born in 2005 barring a disease or an accident are expected to live until they are 100 years old. That is right 100 years old. Can you imagine that? Now for the record I think that is terrific, however, that means also that there will be a lot of changes coming to accommodate this fact. Let me pose a few questions.
I know that many of you are much too busy and stressed to be thinking about such things but they really need to have some thought applied don’t they? You have children, or will have soon. You have grandchildren or will have one day. This is not just about those of us in our sunset work years. (I have about fifteen years left) This is about you.
How you manage your jobs and lead people is what makes a difference in their lives and also in yours. How you deal with tomorrow will be the same thing. The time is now.
Parts Pondering v1.9
The last time we met we talked about being in a rut. I believe it. The problem is that you do too.
Shopping is not a “male” thing. I tease that we are missing a DNA strand or something. We typically know what we are looking for or what we want or need, go to a store, look for it, find it, and then go the cash register and buy it – short and sweet and easy. Right?
Well then stores started cutting back on their support staff, the sales people on the floor, perhaps even the number of check out cash registers. Just as you did starting in the 1980’s when interest rates skyrocketed and Paul Volker was trying to kill inflation. All of the sudden the sale per employee metric became religious. It got a following. Oh I know I support standards of performance and one of the key performance indicators in a parts department is the standard of performance. However, there are many nuances to the number.
The variables sometimes are overlooked – like the average dollar value of the transaction, the weight of the parts, the number of pieces sold per part number, the time of year, and the pay package of the parts employee.
The standard that the AED, Associated Equipment Distributors, publishes is $600,000/employee/year. That today is still a pretty good standard as an average result. But we have to be careful of the usual suspects. A man drowned in a river of average depth of one foot. The $600,000 is based on a pay package of $42,000/year. Is that the average salary, commission and benefit package cost for an employee in your parts department? I don’t even need to go further. In some parts of the country this might still be in the right range but you need to do the arithmetic.
The same “male” genetic defect exists in our customers. They don’t like to be kept waiting for you to answer the telephone, or to acknowledge their presence when they walk into your store, or to wait while you go find the part in the warehouse. They want good service. So I acknowledge that good service is a person thing and that what is good for one person is not necessarily good for someone else. That is what makes customer service so difficult. It is the gap between the expectations that the customer has and the perception of what they got. That can only be satisfied by talented, caring, empathetic and skilled people in the correct number on the job. How do you stand up? The time is now.
Service Statement v1.7
The last service blog listed a series of items that are required if we are to give customers the certainty they want when they work with the service department. The first of those required items is an inspection. Yes I know the customer tells us what is wrong and what they want done. And yes I agree that many of the customers are very knowledgeable. And finally I agree that most customers know their machinery better than anyone else. So why don’t I want to trust their diagnoses? It is really quite simple.
I refer you back to your doctor. I know many of you don’t visit your doctor as regularly as you should, particularly you men. Women are much better at preventative maintenance, oops medicine, than men are as a rule. Perhaps that is why so many men customers believe that preventative maintenance is only about dropping fluids and changing filters. But go back to the doctor if you will. They see you once a year, perhaps more, and have a discussion with you, check your vitals, blood pressure, temperature, pulse, weight, etc., and then they send you to a lab for blood work, perhaps for an x-ray or an MRI depending on the situation. But don’t you know your body better than anyone else? So why not just tell the doctor what is wrong and have the doctor fix it? Of course you know the answer to that one don’t you? Then why don’t we operate the same way when it comes to the service department? You have to have an inspection. It should be done by specifically named inspectors. It should be a predefined series of steps and indications. It should have the machine operating as it would in a work environment, at operating temperature. Then we can be certain of the causes for the customer complaints. Then we can be more certain on our quotation and completion dates. That is what the customer wants and needs for us. The time is now.
Last Chance
Don’t miss the webinars today on Service Management. It is can’t miss webinar day.