5 Key Investments to Boost Automotive Fixed Operations.

I know the difference between an expense and an investment. It’s different in every dealer’s eyes. General Managers, fixed operations directors, department directors and managers who are paid on the bottom line vary strongly on their opinion between the two. It’s understandable. We live in a net revenue business. We are surrounded by the ‘Eat What You Kill’ ideology that is spreading like a wildfire through business ideology.

These are my main five investment areas that have helped me make a footprint in the automotive retail industry. Fixed operations is the backbone and the source for making selling automobiles more profitable and lucrative. If you focus all your time, energy and money on variable, you might be missing out on the factor that can change that. A solid fixed operations providing the superior customer experience, only makes selling cars to your current clients easier. Her are my top five.

Tools

I know when you look at the financial statement you grimace when you look at the tools line. I have been there. As a force of habit and just good management, I make sure the tool purchases are clean and necessitated. Nothing gets bought or purchased without my approval and usually the dealer/gm approval over a certain dollar amount. Tools are the most important part of your team’s success. This ranges from special tools in the shop to items that will help efficiency. It is a major investment, but only an expense if it is useless spending.

Technology

Technically, this can almost go hand in hand with tools. There is a variable though. An up to date efficient computer that an employee works on is a tool. It is also their lifeline of efficiency for customer service. I could write a book on antiquated technology in dealerships and the effects it has on employee efficiency, morale and providing excellent customer service.

Technology is also how you need to do business. Tablets on the service drive implemented with a fixed operations software solution drastically improves efficiency, communication, profitability and is a customer friendly solution in a digital world. People use their smart phones as they are appendages of their body in these times. They want to communicate through text and pay via app. We are in a different world from ten to fifteen years ago. The customer experience drastically improves, profits increase, and retention is seen within months when you go digital.

People want to shop online and research their purchase. Parts eCommerce is the solution for that which has so many positives to it, it’s a no brainer when OEM online parts sales is a $800 billion dollar a year industry. Get in the game and get your share! The ROI on going digital and investing in technology is always going to be a tremendous surprise to the skeptics.

 

Facilities

This is your brand. This is like having company coming over to your home and you want everything to be in place. You might perceive that your friends, peers and colleagues judge you by your home when they visit? Your client is the same and judges you more on this. Your client is a friend. A friend spending money in your home. Make it an experience. If you have a dealership that is within 20 miles of the same franchise dealership and the other one is more welcoming, better amenities, cleaner and inviting. You can bet they are going to drive. Some won’t due to loyalty, but non-loyal and on the fence clients will. I personally choose places to do business by environment. I would rather go get my dry cleaning done with a business that doesn’t look like a sweat shop in the store front. I only like to shop at stores that are clean. I don’t mind paying a small difference to do so if it is comfortable, welcoming and clean. I have been to a lot of dealerships and I will tell you, you will be judged by your ease of navigating your facilities, the lounge area, amenities and the big one…your restrooms. Yes, I have seen dealerships looking in decent shape and go into the restroom only to find I might be in the next “SAW” movie. That’s scary. I know this is an expense but changing your mindset to investment might be the way to go. Have someone evaluate your dealership and give you honest opinions. Not just someone wanting free Starbucks coffee and has Four Seasons taste. I will also add the pride your team has when they work in a clean nice environment. It is an atmosphere they come to every day. If they are coming to an outdated and non-maintained dump, you can expect performance to reflect that. That is a fact, research it. I did. Your dealership is an investment. Treat it like one.

 

Marketing

You know this one. This is one everyone struggles with. Some think they have it down and they may be right. Many others throw money away like tissues during cold season. This is a delicate subject and I am not afraid to tell it like it is. Dealers don’t like spending money marketing their fixed operations. Their biggest gross and net (if operated correctly) are in fixed operations. I have been in variable and fixed. I have seen obscene amounts of money thrown into advertising and marketing for variable. Fixed only gets a fraction of it. Dealers think people will just come for service, parts and collision needs. No need to market. Dealers are focusing to get the customers outside their designated prime market area to sell automobiles. Sending out emails, scratch off flyers in the mail and even the ones with the goofy plastic key that ‘might open a car’ for free. You do what you do in variable, I am here to tell you what works in fixed operations.

Social media presence is important in fixed as well as variable. I see better coverage when every department has their presence with a designated spend amount to boost DAILY posts through all channels of social media. This is where you will hit your target audience with the right content and strategic SEO/SSO fine tuning. This is where you need a professional to help and your staff to work it. Google spends are obvious and geofencing is a must. Enriching your audience daily with information about your parts, service and collision center is what is going to stick. Emails get deleted or in spam folders. Flyers go in the recycle bin immediately and trees are sacrificed over oil change coupons. Very little of our society rely on snail mail. I have worked in country stores and metro stores. If I blast mailers, I do to a certain demographic. I might send 5% of my marketing through mail. Period.

 

People

I am going to say it now, if you have read this far, I appreciate it. This is by far the most important thing I believe in. My faith in humanity is everlasting! There are dealers who understand this subject and dealers who say they are “in the people business”. I am not going to persecute any dealers on this. I am just going to state it as I see it. INVEST in your people. They are your greatest asset. Not the brick and mortar that sits on a concrete lot full of cars. Your people. Hire smart. Train your people and never stop. Show your commitment to them instead of never knowing their names. Make sure you have competitive benefits and compensation. The extreme side of the ‘running lean’ method will leave you with people waiting on paychecks and not focusing on a career. You will not have passionate, engaged and driven employees by trying to back your way into a profit. It is the easiest way to lose talent and customers. You know the saying about happy employees equal…yes. It’s the truth!

Reminder!

People are remarkably empathetic. Customers sense all moods and morale, I promise you. Employees do as well.

Great example, if you have a toxic employee and your operation is not built rock solid on investing in your people, that toxic employee will wreak havoc on your business, customer experience and people. It might be slow and unseen, it will happen. You will eventually have a toxic work environment. People will be unhappy. Consistent bickering. Unimaginable things I could go into detail about. It pours into customer service. I have seen people manipulate CSI/KPI but they cannot manipulate the actual perception of the customer.  They can’t fake the cancer they spread. Your toxic employee might be in a position and have good CSI, but have you looked at your other employees. Why is their performance lackluster? Not everyone has it in them to overcome obstacles. We as leaders are here to help them and make a difference. We must make sure everyone has their opportunity and every effort to succeed. It is not an overnight process. This investment is a long-term investment. Think of it like this, if you start now by investing in your people, it will be the equivalent to owning Apple stock in the early to mid-2000’s. WalMart stock in the 80’s. Just a thought.

My biggest passion as a director was leading my people. Helping them obtain what they needed career wise. I care too much at times. I always wanted my people working for my position. I have no insecurities, just the will and drive to grow people if willing. I had some good bosses and bad bosses. That is how I learned. I had mentors who contributed to my success. I developed the passion to ‘pay it forward’ as it has been passed to me several times. I have spent countless hours on calls with colleagues helping them through issues. I have gone to dealerships and helped. No charge. Just to be the person I believe all leaders and mentors should be. My bank account might state I’m poor, but I know I’m rich. I am wealthy in knowledge, experience and passionate about being a great leader. I strive to be a great father, husband and always drowning in positive spirit. I am just going to leave it here. The most valuable investment and asset to any company is their people. They should treat them as such. It is a no risk investment. Believe you can make a difference.

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