Sell Cars for Profit

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Issue 8            • 8611 Larkin Road • Suite 200 • Savage, MD 20763 • 1.888.471.5800
March–April 2010

In this issue:
                            We Cannot Survive If We Can’t Sell
                            By Chris Frederick
Upcoming Classes        1
We Cannot Survive If We
Can’t Sell              1
Avoid Marketing in
a Field of Dreams       2
Two new ATI classes are
AMI approved.           3
ATI Course Outline      3
The smell of Bengay
in the morning!         4
                            If you don’t believe in performing      tall your estimates are will give        failing to present the items the
                            courtesy checks on your customer’s      you great clues as to where the          techs are finding. It is a further
                            cars to insure their safety and their   issues are and who needs to be led       problem if we are careful and
                            vehicles reliability, don’t waste       in a new direction.                      thorough in building great
                            your time reading this article.                                                  estimates if we are seeing a lack
                            If you believe in helping your          Audit Your Estimates                     of selling success. Not everyone
                            customers see the benefit of            I would have you look at and audit       is capable of standing in front of
                            investing in their car through          the size of the estimates you are        another human being and getting
                            relationship-based selling this will    generating from day to day and           them to see the value in the repairs
Upcoming Classes:           be a great article for you to keep      week to week. This number will           and services we would recommend.
                            reading. I want to help you by          very quickly tell you if you have        Selling is a very tough, unforgiving
Shop Owner                  giving you a new tool today to          buy-in, training or consistency          business, full of rejection and
April 7–9                   diagnosis how effective your            issues with the number and quality       some of us just cannot sell,
April 14–16                 associates are at courtesy checks       of courtesy checks we are doing in       however, selling is a learned skill
                            and give you some suggestions           the back of the shop or it will tell     not something you are born to do.
April 22–24                 to help them grow. One of our                                                    You may have personality traits
                                                                    you if we have training, buy-in or
May 5–7                     coaches, Brian Canning, will            sales competence issues up front         that help or hurt the learning
May 19–21                   explain how he helps literally          on our counters. If the estimates        curve, but if you like selling,
                            thousands of shop owners every          we are seeing are consistently           anyone can be trained to do it.
Service Advisor             week find the hidden profits in         short, consistently lacking in           It doesn’t matter if they are hard
April 12–13                 their shops. Spending an awful lot      recommendations for maintenance          working or smart nor if they are
April 26–27                 of time analyzing and inspecting        services and consistently centered       really nice guys. Your business
May 3–4                     the courtesy check process,             on the gravy, the chances are very       demands some level of selling
                            especially as it relates to the         good that the techs and the quality      success and if they are trained and
May 17–18                   average repair order and labor                                                   understand the expectations we
                                                                    of their courtesy checks are the
Advanced Service            sales, I am going to suggest a          issue. If the estimates are tall, with   have set and we have given them
                            slightly different approach in          all the appropriate recommendations      a reasonable amount of time to
Advisor                     determining where the problems                                                   succeed and they are still struggling,
                                                                    for maintenance and efforts to be
April 19–21                 are in our shops. Though                true to the courtesy checks with         we need to find somebody else
                            underneath it all, the courtesy         broad recommendations for                who can sell. We cannot survive
                            check process and average repair        maintenance and service but we           if we cannot sell.
                            order are functions of leadership,      are not seeing the expected sales        The quickest way in the world
                            very often it is unclear as to          results, you likely have a sales         to turn techs off on the need for
                            whether the issues we are having        competence issue.                        courtesy checks is in our consistent
                            in these areas is in back with the
                                                                    It matters very little if our            failure to sell the items they have
                            technicians or up front with our
                                                                    technicians are doing great              recommended. They are very
                            service advisors. If you are going
                                                                    courtesy checks on every car that        aware of the recommendations they
                            to lead, it is always preferable that
                                                                    we pull into the shop, if we are         have made and know very quickly
                            you lead the right people in the
                            right direction. Looking at how         putting a hatchet to them and                           Continued on page 2
Page 2                                                                Shoptalk
 Continued from page 1                  blame but the vast majority of the
 if we are eliminating these
                                        time it is the leadership and our
                                        process that is the root cause of
                                                                                 Avoid Marketing in a Field of Dreams
 recommendations from the               our poor performance in these            By Eric Twiggs
 estimate or if we are consistently     areas. Techs mostly will do what         One of my favorite movies is Field of Dreams starring Kevin Costner. In this classic
 failing in our efforts to sell the     they are asked, though often with        movie the character Ray, who is played by Costner, is told by a mysterious voice “If
 repair and service items they have     the obligatory objection and             you build it they will come”. At the end of the movie, you could see a trail of cars lined
 uncovered and recommended.             whining. Strong leadership and           up for miles making their way to see Ray just like the voice had predicted. Ray did not
 We need our techs bought-in and                                                 have a marketing plan or marketing calendar, but still had cars. Well, this might have
                                        expectations that are clear and          worked for Ray, but it will not work for you the shop owner. Simply building it and
 believing in the courtesy check        understood will almost always            hoping for cars is not enough. If you do not know how many additional cars you need,
 process and selling is the greatest    solve issues in the back shop and        where you will find them, how much marketing you will send them, and when you will
 way to assure their reliable best      from time to time, when somebody         communicate, your plan is a Field of Dreams marketing plan. We will answer each of
 effort, especially if we have a        will not adapt or change, they will      these questions in this article. It would be a good thing to have your calculators handy
 compensation plan in place that        need to be replaced. There can be        because I will show you by the numbers, how to create a sound marketing plan.
 will support the effort and pays       no compromise in what we are             Before beginning any marketing effort, we must first determine the number of
 them for their improved                asking from our technicians but          additional cars that we want to attract each week. The first step in determining how
 performance. Encouraging a             the very good news is that we are        many cars is to know your desired weekly net operating profit target. This is the
 thorough and consistent effort                                                  bottom line profit number that you have set as a target to determine if your business
                                        not asking for things that are           was financially successful that week. For this example we will use $3,000 as the target
 from your techs helps assure the       unreasonable. Defining the journey       net operating profit. Next, you will need to know your total weekly average fixed
 integrity of your process.             and setting those expectations is        expenses. These are those reoccurring expenses such as rent and utilities that are
                                        certainly important but more             constant from week to week. We will use $3,000 as an example here as well. If we add
 Audit Your Courtesy Checks             critical is holding the techs            our weekly net operating profit target to our fixed expenses we come up with $6,000.
 A great tool in the beginning to                                                Next, we will take the $6,000 and divide by our average gross profit as a percent of
                                        accountable to the results and in
                                                                                 sales trend. This will tell us the amount of weekly sales needed based on our desired
 measure tech compliance to the         our insisting on adherence to the        net operating profit target. If we divide $6,000 into an average gross profit percentage
 courtesy check process and service     process. In my own experience,           of 50% we come up with $12,000 in weekly sales needed to generate the bottom line
 advisor efforts toward estimates       technicians nearly always object         net profit target we established. Now that we know our desired weekly sales, we can
 and selling is what we call a          right before they give me                calculate how many cars we need by dividing that number into our current Average
 Courtesy Check Tracking Form.          everything I have asked for. Get         Repair Order (ARO). For this example our ARO will be $300. If we divide 12,000 by 300
 As high tech and life changing as                                               we come up with 40 cars. We have now determined that we need 40 cars a week to
                                        past these objections and the rest of    achieve our desired net operating profit target. The final step is to subtract your
 it sounds; it is little more than a    it will generally take care of itself.   current weekly car count average from your target car count number. If we average
 log we keep on the repair orders                                                37 cars a week currently and have a target of 40, the math tells us that we need three
 we are generating. In fairly short     I spend a lot of time talking up the
                                                                                 additional cars each week.
 order it can verify whether or not     importance and necessity of doing
                                        courtesy checks but an important         Now that we know we need three additional cars based on our example, we are ready
 we are doing courtesy checks,                                                   to determine where we will find the three cars. The two places we will find these are
 whether or not we are up selling       next step to both verify the quality     through existing customers (retention marketing) and new customers (acquisition
 from what customers are coming         of these inspections and to verify       marketing). First we will address the exiting customers. For us to be effective in
 in for, are we creating estimates,     the selling process is to look very      determining how many of the three cars needed will come from existing customers,
 what services are being denied and     closely at the estimates we are          we want to focus on those customers that have visited the shop only one time during
                                        creating. If our estimates are           a 12 month period. Your Visit Frequency Report in your computer system will tell you
 what technicians are recommending                                               what percentage of your customers only visited one time. In this example, 33% of our
 which service. As much as              consistently tall we can be
                                                                                 customers were one time visitors. When we multiply the three cars needed by 33% we
 anything, this log measures our        confident in our courtesy checks.        determine that one out of our three cars will come from our existing customers. Simple
 efforts and buy-in toward              I would then begin to look at the        subtraction tells us that the remaining two cars will come from new customers.
 maintenance, our attention toward      close rate, how we write our
                                                                                 Now that we know how many cars we need each week and where they will come
 the inspection process, the quality    estimates and what is not being          from, we are ready to determine how many pieces we need to send out each week.
 of our estimating process and our      sold. Customers cannot buy what          Marketing is a numbers game. If we do not understand the average retention and
 willingness and core ability to sell   they are not told about and we           acquisition marketing response rates, we will not be able to effectively attract the
 the repairs and services we            can’t expect to sell it without          three additional cars we needed from our earlier example. The average retention
                                        asking for the business. If you          marketing response rate is 15%. Earlier we established that we needed one additional
 identify. This last item is key and                                             car from our existing customer. Dividing 1 by 15% tells us that we would need to send
 typically the greater challenge        inspect the cars you are seeing you
                                                                                 out seven pieces a week to existing customers at a minimum to attract one additional
 maximizing the service and selling     will find the work. If you find the      car. That seven can include birthday cards, oil change reminders, appointment
 opportunities represented by our       work, you need to estimate it.           reminder cards, etc. The average new acquisition marketing response rate is 1%. To
 existing car count. Too many of us     Having estimated it, we need to          attract two additional customers through new acquisition, you would need to send out
                                        confidently ask for the sale.            200 pieces a week (2 divided by 1%). Successful marketing requires an investment of
 do not believe in maintenance, do                                               time. Based on the response rates you must be willing to invest the time and effort
 not believe in inspecting our                                                   required or be willing to delegate this critical function to someone that has the time
 customer’s cars for repairs and
                                        Try My Tracking Form                     to do it right.
 services above and beyond what         In the world of estimates, tall is
                                                                                 Having a marketing calendar will help us to determine when we will communicate
 they had come in for and too many      where it starts. Sales are where it      with our customers. We will want to determine what activities we will do on a daily,
 of us just can’t sell.                 needs to end. What they don’t buy        weekly, monthly, quarterly, and seasonal basis. Making thank you calls could be a
                                        can be presented in recommendations      daily activity that you have planned on your calendar, sending birthday cards would
 It is an unfortunate truth that many   for the next visit. If you would         be a monthly event, while sending holiday cards would be seasonal. The biggest
 among us immediately want to           like a copy of our Courtesy Check        advantage of a marketing calendar is that you can have planned events around those
 blame our technicians when                                                      times of year that historically have low car count. Having a back to school event that
                                        Tracking Form to help you find the       is planned in advance and put on a calendar can drive cars into your bays while
 average repair order is low, when      hidden profits in your shop just ask     your competitors are using this time of year as an excuse for low car count.
 tech productivity is low and when      your coach for the audit form.
 the number of courtesy checks we                                                Finally, just building it was an effective strategy for Kevin Costner. For you, knowing
 are doing is low. There is no doubt                                             how many cars you will need where to find them, how much marketing you will send
                                                                                 them, and when you will communicate, will work much better.
 that sometimes the techs are to
                                                       Shoptalk                                                               Page 3

Two new ATI classes are AMI approved.                      ATI Course Outline
Our two 3-hour sessions for ASA ATE Washington Show.        Shop Owners                          Shop Owner Management
                                                            Management Course                    Course Day 9

                                                            Shop Owners Management                Maximizing Your Presence
                                                            Course Day 1 Agenda                   On the Web
                                                             • P & L Statement Analysis           • Understanding Social Media
                                                             • Profitability Analysis              • Establishing and Applying Social
                                                             • ATI’s Profit Model                    Media to Your Shop
                                                             • Improving Profitability             • Understand the Future
                                                                                                    of Marketing
                                                            Shop Owners Management                • Understand the Internet & How
                                                            Course Day 2 Agenda                     It Applies to Your Shop
                                                             • Increasing Labor Profits            • Steps to Help Maximize Your
                                                             • Technician Productivity              Internet Presence
                                                             • Technician Compensation
                                                                                                 Advanced Shop Owner
                                                            Shop Owners Management               Management Course – 2 Days
                                                            Course Day 3 Agenda                   • Working On the Business
                                                             • Staffing & Recruiting               • Sales Management
                                                             • Increasing Parts Margin            • Financial Planning
                                                             • Sales Management                   • Increasing Tire Sales & Profits
                                                             • Service Manager’s Workshop
                                                             • Service Manager Advisor           The agenda for the Advanced Shop
                                                               Compensation                      Owners class is determined by the
                                                                                                 attending owners.
                                                            Shop Owners Management
                                                            Course Days 4, 5 & 6                 Service
                                                             Leadership Mastery                  Manager Course
                                                             • Dysfunctional Leadership Styles
                                                                                                 Service Manager’s Course Day 1
                                                             • Creating a Tribal Environment      • Increasing Profits
                                                             • Effective Communication            • Increasing Repair Sales
                                                             • Human Behavior Styles
                                                             • Time Management                   Service Manager’s Course Day 2
                                                             • How to Build Effective             • Increasing Maintenance Sales
                                                               Employees                          • RMS
                                                             • Personality Profiling               • Selling Maintenance
                                                             • How to Apply Discipline            • Phone Skills
                                                               & Praise Effectively               • Motivation & Goal Setting
                                                             • How to Provide Superior
                                                                                                 Service Manager’s Course
                                                               Customer Service                  Day 3 & 4
                                                            Shop Owner Management                 • 7 Step Sales Process
                                                            Day 7 & 8                             • How to Sell Yourself
                                                                                                  • Invite Them In
                                                             Position Your Shop for Success
                                                             • Understanding & Building the       • Information Gathering
                                                                                                  • Buying Personalities
                                                               Brand for Your Shop
                                                             • The Choreography of Your Shop      • Bridging to Add-On Services
                                                             • How to Separate Yourself from      • Selling the Company
                                                                                                  • Facts – Benefits – Sales Aides
                                                               the Other Shops in Town
                                                             • Understanding the Demographic      • Presentation
                                                                                                  • Closing
                                                               & Psychographics of Your
                                                                                                  • Handling Objections
                                                             • Understanding Customer             • Cement, Thank You, Follow-up
                                                                                                  • Handling Irate Customers
                                                               Retention –vs– Acquisition
                                                             • Defining Your Marketing Needs       • Action Steps
                                                             • What is Our Vehicle Win Number    Advanced Service Manager
                                                             • Basic Marketing Plan &            Course – 3 Days
                                                               Marketing Calendar                 • The Tools of Service Leadership
                                                             • How to Determine the Return on     • Review Increasing Profits
                                                               Your Marketing Investment          • Review Relationship Based
                                                                                                  • Tires
Page 4                                                               Shoptalk
 The smell of Bengay in the morning!
 By George Zeeks

                                        the selection process began. I must,    buckets. If the UFC would have          called Ethan, was literally launched
                                        at this point, mention that at no       been present, I am sure that many       onto my back by this mob in
                                        time, that I can recall clearly, did    Ultimate Fighter contracts would        retribution for crossing into their
                                        I attempt to recruit for my team.       have been signed on the spot. The       turf. I found the event amusing at
                                        The rumors are purely hearsay           screams of battle echoed down the       first, as this was indeed a family
                                        and are not admissible in any court     beach and competed with the             event. Amusement turned soon
                                        that I would care to listen to. There   sound of tourist feet slapping in       to alarm as I realized that he had
                                        had been an upset the previous          the sand to establish some safe         crawled to the top of my back and
                                        year and your Humble Narrator           distance from the conflict.             it seemed that he was attempting
                                        was able to lead the Green team                                                 to claw through and sever my
                                                                                The Hula Hoop contest was an
                                        to victory. This year, alas, it would                                           spine with rabid determination.
                                                                                example of the perfect “Ringer”,
                                        not be so. Brian Hunnicut and his                                               It was a Tasmanian Devil in a child
                                                                                please forgive the pun. A young
                                        Red team were able to emerge                                                    suit, I am sure of that now. He
                                                                                woman, obviously recruited
 The second annual beach Olympics       victorious, despite valorous if not                                             dropped off as I was finally able
                                                                                specifically for this event, took her
 has officially come to a close and     completely honorable attempts to                                                to cross out of their self appointed
                                                                                place at the start. Grown men were
 Bengay is apparently the approved      defeat them.                                                                    turf. It reminded me of the first
                                                                                weeping, including your humble
 cologne for the last day of the                                                                                        Alien movie when the spider thing
                                        The amazing thing is the competitive    narrator, as the Hula Hoop spun
 Super Conference 2010. I do not                                                                                        dropped off after completing its
                                        drive of the contestants. Please        one time and fell into the sand.
 know if I can bring myself to say                                                                                      job. I wonder if that man child
                                        remember that we are playing            No amount of effort, on our part,
 that any of the rules were broken                                                                                      bleeds acid. Thank goodness we
                                        children’s beach games with no          could make this cursed thing work.
 during the games yesterday, but I                                                                                      will never know.
                                        cash prize in sight. The first event    The young woman, on the other
 can safely say that they were bent     was a simple relay race, up the         hand, was able to Hula her Hoop         There were no major injuries, in
 like bamboo in a Typhoon. As           beach and around a bucket, than         with no visible effort at all. It is    that the helicopter did not have to
 your humble narrator, I will try to    back to the start. I watched in         reported that she did her nails,        land right on the beach, but minor
 bring you some of the highlights       shock as a saboteur, grabbed our        texted several of her friends,          aches and pains would become
 without prejudice and as objectively   bucket and hightailed it down the       updated her Facebook account            the cost of grown men and women
 as I possibly can. I must add one      beach with our determined runner        and did her tax return during the       playing children’s games. The
 note, in that no animals were          in hot pursuit. Ten yards, Twenty       event. Needless to say, the             determination was incredible and
 injured during the course of the       yards and finally Thirty before he      “Ringer” swept the competition          I have become convinced of one
 games. The damaged Hamstrings,         realized that he could safely turn      and emerged victorious.                 thing. I am inviting the Taliban to
 Knees, Backs and Egos are all          around and come back without                                                    come to the next Beach Olympics
 part of the story.                                                             I approached Geoff Berman’s
                                        having reached the bucket. This                                                 and after they have competed with
                                                                                Yellow team, in an attempt to form
 The sun was squinting bright           was the example of our team’s                                                   the Shop Owners, they will surely
                                                                                some sort of an alliance to fend off
 and the sand was pleasantly warm.      determination to follow the rules;                                              lay down their arms and all try
                                                                                what seemed to be certain defeat.
 It was a nice reprieve from the        this could not be said of the other                                             to open auto repair shops. If they
                                                                                Once I had crossed the invisible
 overcast and cold wind of the          teams. Grown men were applying                                                  refuse, we always can launch
                                                                                turf barrier, I was attacked by his
 previous day. The contestants were     choke holds and arm bars in an                                                  the man-child at them.
                                                                                rabid mob. A small man child,
 in fine form and eager to start as     attempt to protect their own
                                                                                eight years of age and reportedly

                8611 Larkin Road
                Suite 200
                Savage, MD 20763

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