Auto Insights: Best ideas and practices

Butch Hollister, Dealership Management Consultant from the NADA 20 Group conducted a session at the NADA 2015 conference on the best ideas and practices from the top performing automotive retailers with key tips for every automotive retailer- regardless of franchise, market or sales volume.


Workshop synopsis:

The starting point for a Dealer Principal or Manager is to “Get Involved”. It takes constant attention to all the little things that make an automotive retailer succeed. Manage by walking around, and start with the following:

  • Walk in a different door every day
  • Get to know all people in all departments
  • Have a good attitude
  • Ask questions
  • Take a genuine interest in your employees
  • Get to work

Big sales and new advertising ideas are generally just quick, short term fixes. Slower, steady growth is sometimes harder, but is usually sustained.

Best Ideas and Practices:

Expense Saving by the Manager:
Have managers take ownership of their respective profit and loss statements, and let them implement cost saving recommendations. At the next managers meeting, ensure the following two points are prepared and discussed:

  • List the top five expenses they have cut
  • List total dollars saved by the cut

Best cut earns one month of the savings as a bonus.

Consider using YouTube for Employment Advertisement:

  • Low cost – Approx. $375 per month
  • Larger varied audience – wider spread geographically than print or radio circulation
  • Viewer selected by degree of interest – payment at 50% viewed, offers exposure and branding even if not a job seeker is viewing
  • Modern appearance and appeal – Create your own visual and audio image

Technician Tuesday:

  • Conduct a 1 hour weekly meeting
  • Entire fixed operations staff
  • Review goals – award achievement and set new goals, both management and technicians
  • Suggestion box review – employee and customer

Service and Parts 3:30pm Time Out:

  • Ensure right parts are available for following days business
  • Ensure workload and technician time availability for following day
  • Knowing what is in the shop that is not going to be finished as promised

Dealership Audit:

  • NADA 20 groups visit each other’s dealership to exchange best practice ideas.

Set up a Salesperson Mentoring Program for New Sales Staff:

  • Written agreement
  • Mentor will help new salesperson with:

     o Product knowledge
     o Paperwork
     o Etiquette of dealership
     o Closing objections
     o Other basic knowledge

  • Mentoring compensation:

     o 5% of new salespersons gross
     o $50 for each sale over ten units per month 
     o $200 at end of first year of continued employment

Bonus Plan for Trainer Technician:
This plan is in effect during new technician training time

Trainer technicians pair up with an experienced technician to guide their work, keep them on track with quality control and help them mould into competent technicians.

  • Trainer technician receives:

    o A guaranteed of 100% of his or her hours for the pay period
    o $3 for every hour trainee produces
    o $4 when trainee covers 75 of hours
    o $5 when trainee covers 100 hours

Increase Hours per Repair Order Bonus:
At the beginning of every month put up $100 for each service advisor if they sell items from a list, for example:

    o Nitrogen (3)
    o Cabin filters (3)
    o Wiper blades (3)
    o Alignments (2)
    o Flushes (2) etc
    o Tyres (8)

Grow as a Company:
Today it is more important than ever to explicitly define your dealerships core values in order to develop your culture, brand and business strategies.

The core values that dealerships should follow include:

  • Teamwork – Good of the team comes before the personal comfort or agenda of any individual team member;
  • Performance – Hitting expectations and delivering on commitments;
  • Character – Always do what is right, not what is easy, cheap or convenient;
  • Change – Initiate change, fun, spontaneity and creativity in the workplace;
  • Urgency – Serve one another and our guests quickly;
  • Detail – Attention to detail means we will become brilliant with the basics and getting the little things done right the first time;
  • Coach – Coach, train and mentor team members to help them reach their personal potential;
  • Personal growth – Team members are expected to work as hard on themselves as they do on their job;
  • Grace – Provide each other and everyone we serve unmerited favour regardless of situation; and
  • Community – To give back because we can, because we care and because we believe that everyone doing a little can accomplish a lot.

Additional Sales Guaranteed:
A simple sign on showroom door that has the following:

  • After hours salesperson contact (name, phone and email).
  • Post next to company hours on showroom doors

New Generation Pay Spiffs:
Consider time instead of money, for example an extra day off on the back of a long weekend.

End of Month Checklist for Three-Day Close:
Day one:

  • All accounts payable invoices must be turned into the office by noon
  • New and used vehicle physical inventory turned in by 5:00pm
  • Reconcile with schedules

Day Two:

  • All car deals turned into the office by noon
  • F&I logs turned into the office by noon
  • All repair orders and parts tickets turned in to the office by noon
  • Reconcile work in process inventory, sublet inventory
  • Balance inventories: gas, oil and grease
  • Reconcile car deal accounts: contracts in transit, down payments and lien payoffs for trade-ins
  • Balance car sales/invoices and wholesales
  • Reconcile the new and used schedule balances with the car folders

Day Three:

  • Prepare and post commission payroll accrual
  • Check expenses posted for month, accrue for those not posted
  • Print reports for management to review
  • Trial balance
  • GL history for expense accounts
  • Expense trend analysis

The best ideas and practice from NADA 20 groups are one the best attended sessions of the conference. Many of the ideas are not new, but as a minimum they are a reminder of good ideas than can improve your business.