In business, customer service is king. In sales, it’s customer satisfaction selling. Both of these relate directly to customer retention and repeat business.

As a frequent traveler, one of my pet peeves at restaurants, hotels and other businesses has been what I call the “Can’t/Won’t Syndrome.” I’m sure you have experienced this scenario at one time or another.

One of my more common experiences occurs when I ask for a meal substitution. I was born and raised in Idaho and I like baked potatoes (imagine that). So I’m in a restaurant, and I notice that the menu has various meals with baked potatoes. I really want one their specialty burgers, but it comes with French fries. I ask the waiter/waitress if I can get the burger with a baked potato and am told, “Oh, I’m sorry but we can’t (or won’t) substitute.” Or perhaps I’d like green beans instead of broccoli, or whatever. I would not care if there was an upcharge, but they never offered that – only “we can’t.” Of course they could physically substitute, but management has decided to plant their unmovable flag on this hilltop.

When I encounter this kind of behavior, I just shut down. I will do whatever I can to not do business with them in the future. It is a basic failure of the business’s philosophy of management.

Now if they came back and said; “I’m sorry but we are out of baked potatoes (or green beans or whatever),” I’d accept and act accordingly. Providing a reasonable explanation will overcome the frustration that is created by the “Can’t/Won’t Syndrome.”

As an industry and dealer consultant and trainer, I visit dealers on a regular basis. Sadly, I have noticed this behavior in various dealerships. If you are an owner or GM, it is important to consider how this affects your dealership’s financial sustainability, let alone growth. Oh sure, you may get away with this attitude in the short term as your customers are willing to put up with more due to the scarcity of product. However, most customers will not tolerate this kind of behavior for long.

So, what does this mean to you Mr. Dealer? I will seldom buy from a business that has the “Can’t/Won’t” attitude. Again, if this is a one-time experience with a reasonable explanation, that is acceptable. The proper word-track would be; “I’m sorry Mr. Jones, but we aren’t able to do that because…”

One of the dealers I worked for in my youth had a philosophy of “going the extra mile” for our customers. We were all encouraged to use positive word-tracks in negative situations like; “We don’t have that accessory in stock, but let me make a couple of calls to see if I can get it for you.” Or; “I’m sorry but we can’t get your ATV repaired in time for you to pick it up by Friday. However, since you need it on the farm this weekend, I’ll stay late Friday to get it finished and bring it out to you Saturday morning.” Needless to say, our customers were very loyal to our store and not only came back, they brought in new customers as well. In addition, the value of doing business with our dealership had a positive influence on our pricing. We were able to hold higher margins on our products than many of the competitors.

Having a customer-satisfaction attitude and providing customer service training for managers and staff (and holding them accountable) will help ensure longevity and growth for your dealership.

…REALLY?

There are two powersports dealership staff positions that we tend to mis-classify as “Entry-Level” jobs. In reality, these positions significantly affect the productivity and profitability of your dealership. These folks also have considerable influence on your level of customer satisfaction.

Let’s look at the lowly shipping/receiving position. This person touches thousands of dollars of incoming and outgoing parts and accessories inventory. Think of these as boxes filled with dollars – YOUR dollars. They are responsible for checking in these shipments; verifying packing lists and comparing them against orders. They must ensure P&A is properly categorized and received into the DMS. They must stock the P&A on the shelves and notify the right people about any special orders received.

Many of them are also responsible for taking care of parts-to-service. How well they handle this can affect your service department’s productivity. In addition, they prepare and ship customer orders and supplier returns…along with many other tasks.

Do you really want to entrust this to an “entry-level” person, or would you prefer someone who is sharp, mature, honest, has a great attitude, an analytical personality and has been trained on inventory control?

Next, let’s look at the service writer position. This person is responsible for handling your service customers. The average powersports customer purchases around 7-8 units during their powersports life-span. This first impression touch-point can make or break your opportunity to establish a relationship with this customer and capture the remainder of their unit sales.

The service writer is responsible for uncovering and documenting the customer’s wants and needs. They need to complete a thorough walk-around to ensure they identify all needed repairs and services at the time of the write-up while maximizing upsell opportunities. This is a sales position that requires selling and customer relations skills and training. Surprisingly, few dealers provide their service writers with sales training. Quite often, the service writer is also responsible for dispatching the repairs to the appropriate tech while monitoring the hours available for all the techs.

Service writers should take ownership of the Repair Order from start to finish, including adding required technician notes. If there is need of additional repairs or the estimate must be revised, the service writer should handle this process. When the job is completed, the service writer notifies the customer and establishes a time for pick-up.

The RO is a significant legal document: that requires the writer to have knowledge of state laws and regulations that affect authorized signatures and phone authorizations, among other things. They have to ensure that the RO is signed, it documents the work requested, the cause of any issues and what was done to correct the issues.

As with the shipping/receiving person, this is actually a key position that significantly affects your dealership’s operation. Do you really want to use an entry-level person who doesn’t necessarily have the proper attitude, aptitude or training for this job?

DO YOU HAVE MANAGERS OR MINOS IN YOUR DEALERSHIP?

MANAGER – mánn-ij-er (noun): Someone responsible for directing and controlling the work and staff of a business, or of a department within it
MINO – my-know (acronym): Manager-in-name-only. Someone with a manager title but without the empowerment, responsibility or accountability of a true manager

One of the questions I ask students attending my management workshops is; “How many of you have a budget for your department?” Sadly, very few of them raise their hands. In addition, most of the managers admit they don’t have the authority to hire or fire the staff for their department.

Surprisingly, most of these managers come from relatively high-level dealership operations. Many of their dealerships are members of 20-groups – dealerships I would expect to utilize more advanced business management techniques than the majority of dealers. However, that is not the case.

Outside of our industry, typical business operations consider budgeting and personnel management to be key functions of their managers. Without these responsibilities, it is simply not reasonable (or fair) to hold managers accountable for the performance and profitability of their departments.

Unless they have a budget, managers can’t make appropriate decisions on marketing, purchasing supplies, displays or equipment. They won’t know if they can afford to hire additional staff or change compensation plans. Instead, they have to go to the owner for all these decisions. What’s the point of having managers if they don’t have the ability to make basic management decisions?

Here’s a classic example of the frustration of being a non-empowered manager: I know a sales manager who is responsible for the performance of eight salespeople. The owner constantly pressures her to improve sales. Several members of the team are chronic under-performers who should have been invited to change careers, but she doesn’t have the authority to fire them. Worse, the staff knows that the owner “never fires anybody.” Therefore, there is no fear of losing their job. This sales manager is being held accountable for something she cannot control.

Consider this: Unless they are empowered, most good managers will look for another job. If you have personnel who have the skill-set necessary for being true managers but they are not being empowered to manage, consider implementing some changes. Work with them to develop a department budget. Give them more flexibility in controlling their personnel. Hold them accountable for achieving your specific goals for their department. Learn how to work ON your business, not IN it. In the end, your dealership will operate more efficiently and profitably and you can take the time to enjoy life more. That’s what it’s all about, isn’t it?

If you want information about management training or dealer on-site services, email me at [email protected].

ACKNOWLEDGEMENT:  This article was previously published in my Powersports Business Magazine column. 

(Budgets are a good thing!)

Establish departmental budgets and life gets better!

Sadly, relatively few powersports dealerships provide department managers with a structured budget. This goes hand-in-hand with the general lack of enabling managers to control their departments. The purpose of empowerment is to allow effective managers the ability to improve productivity and profitability while establishing accountability for the overall performance of the department. Empowering managers without establishing departmental budgets is almost pointless.

Without budgets, managers can’t control their expenses for purchasing products or supplies, or develop effective marketing plans. They can’t maintain proper staffing levels, drive goals and provide performance rewards without a budget for compensation and incentives.

Establishing a departmental budget is not that difficult. Historical data is always the basis for building a realistic budget. Once you know how much has been spent on the department’s expenses, you need to break out the line items to only those expenses that the manager can control.

We know that personnel make up the bulk of expenses for most departments. A personnel budget can be established by comparing industry benchmarks with historical sales data. For example, industry benchmarks that might be used for a “typical powersports sales department” include:

o   Average personnel expense per vehicle sold. Multiply your projected unit sales by your target benchmark number. Then take this figure and break it down into salespeople, support staff and the manager(s) and also split it into salaries, commissions and spiffs.

o   Another benchmark would be personnel expense as a % of department GP. The overall powersports industry expense average is generally less than 30%.

o   Keep in mind these benchmarks are heavily influenced by product mix. If you sell mostly low-cost units your numbers will be different than a dealer who sells high-end products.

Establish your own benchmarks based on your own data!

So, what are some other controllable expenses that might be included in a sales department budget? New units have a lot of variables (OE programs, market trends, etc.) and are generally not part of the manager’s budget. Marketing would be considered if your sales manager plays an active role in preparing your unit sales marketing plan. The average budget for marketing a powersports sales department tends to run .8% to 1% of projected sales revenue. Flooring costs can be another budget item if your manager is involved in controlling aged inventory. Incentives for exceptional results help drive improvements. Other budget items might include things like goodwill (or policy) expenses, uniform shirts, office supplies, cleaning materials, etc.

This was just an example of a sales department budget. Each department has its own controllable expenses that could be used to establish a departmental budget.

Budgets are always a work in progress – they must respond to seasonality and other current situations. Quarterly budgets are generally easier to adapt. The important point is to get budgets established so you can spend less time working “in” the business and more time working on the “big picture” aspects (the owner role).

ACKNOWLEDGEMENT:  This article was previously published in my Powersports Business Magazine column.