Three Tools to Grow Profitability
Bill Demaree is the corporate director of fixed operations at Tom Wood Auto Group, where he oversees 18 franchises and 14 rooftops throughout the Midwest plus one 69,000-square-foot collision center in Indianapolis. Demaree spends his days analyzing the day-to-day activities of his franchises from both a financial and customer retention growth perspective.
“I spend time at our stores working the management team on implementation of processes, implementation of best practices on a story level,” he says. “I also spend time working with the management team on profitability, on sustainment and customer retention on the store level.”
Technology sits at the forefront of all of this, Demaree says, and as he explained to Fixed Ops Business, Tom Wood Auto Group utilizes tools in each fixed ops segment to boost growth.
1) Shop Analytics System.
There are a number of options out there for this, and we have a system implemented in all of our stores now. Closely monitoring your numbers is critical today, and you can use those metrics to boost business. Mainly, we use this tool as a resource to drive customer retention. For instance, in service, we measure closing percentages per service consultant on fast-moving items. Brakes, tires, alignments, maintenance packages—those sorts of things. It focuses on how many opportunities suggested to the customer, compared to the amount that was actually closed. We’re really driving our per-RO dollar amounts by using the system. Our benchmark is a 40 percent closing ratio.
One quick note on upselling: With putting an emphasis on closing percentages, we put in alignment-check machines and tire-tread machines. We’re adding that equipment for upsells on tires and alignments. It should be more of a focus. In the industry, the guy that sells the tires is going to keep the service. They go buy tires someplace else, that’s where they’ll continue going. Keep them at your location. Costco and Sam’s Club aren’t able to align or install tires. We want to be a one-stop shop here. Our prices on tires are very competitive. We will price-match anybody. Think of it as marketing. There’s really no reason to let the tire business go elsewhere.
We also use use this for the parts department. Our system allows us to to track our parts orders and flag our parts department when parts arrive. It opens that communication between the parts department and service or collision. Now, our parts people can run the part out to the bay so the tech doesn't have to leave his or her stall. We use the text messaging feature as well (more on that later), texting wholesale customers and texting out when parts have arrived.
2) Online Appointment Scheduling.
For all of our appointments, we use an online scheduling system for all the stores. Service consultants don’t have to worry about the phones ringing. That’s helped us grow in the stores because it eliminates any gray areas or issues that may come up. Some consultants may underestimate a bay because they think the technician is too busy versus what the schedule states based on hours.
This program allows anybody to go in and look at a bucket of hours in order to know when you have capacity to book the ticket. My business development center, they have a log in. If someone calls them for an appointment, the call is ID-ed, and they would answer and can look at the schedule for the whole store. They see the availability and make the appointment. There’s a confirmation email that goes out when the appointment is booked. It’s a reminder email. If they don’t make the appointment, it will make a follow-up reminder email to encourage them to reschedule. The system also keeps track of history and all the appointments a customer has had in the past. It’s a good tool to manage your appointment system.
3) Text Messaging.
Although this isn’t necessarily new, it is new to most dealership fixed operations departments. Bottom line: There is very little cost to allow the service consultants to text back and forth with customers. They can do follow-ups and receive quick answers throughout the entire repair process. The texts can be monitored by the manager. If there’s ever a complaint, the manager can hijack the tech. It’s a live deal going with a service consultant and the customer, so if say, a customer hits the frowny face, the manager gets an alert. He can jump in and assist. Form a CSI standpoint, that’s huge.
We’ve found over the years, that one of our biggest complaints with customers is a lack of communication. And in some cases, you may call a customer and leave a message—but just leaving a message requires a callback to give full information and the customer to get any questions answered. Most people today, and especially younger generations, communicate mostly through mobile phones and texts are a huge part of that. If I can text a guest, the response time for that text is miniscule compared to an email or voicemail. The last study I’ve seen, the average email open rate is 18 minutes. It’s about three minutes for a text. The amount of time that is lost trying to communicate with customers is significant. It makes all the sense in the world that text messaging would be a huge part of what we do.