The Auto Dealer’s Original Fixed Operations ResourceVol.4, No.5 May 2007Design &ConstructionThe Green Fixed OpsDepartmentHeating up Revenueswith Recycled OilService in a Clean andEfficient Environment
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Table of Contentsp.6Letter from the Publisherp.28Service DepartmentPay Plans & Management—Are They Mutually Exclusive?p.32Parts DepartmentNADA Rolls into Lucky Seven Accessory Sales Programp.34Body ShopTraining: Cost, Loss or Investment?Featuresp.12p.16p.20p.24p.26Fixed GreensIt’s easy to design an environmentally friendly dealership.Inside the BoxGood design can be a fixed ops department’s best sales tool.The Fire InsidePart 1Incorporating fluid recycling in design heats up fixed ops profits.Golden RetrieverAutomated storage systems with direct interfacecan be the fixed ops manager’s best friend.Master PlannerGetting help to achieve a well-designedservice department is key to higher profits.p.37AdministrationFive Secrets of CRMp.42Spotlight OpsFriends Work Ways up in Fixed Ops Careersp.8Industry News andEvents Calendarp.39New Productsp.40Advertisers Directoryp.41Marketplacep. 4May 2007Fixed Ops Magazine
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Letter From The PublisherThis month’s issue of Fixed Ops is the annual Dealership Design, Construction andFurnishing issue—a time to examine a few of the considerations that go into planning bothmodernizations and new construction. The vital role that fixed operations plays in the financialhealth of your dealership demands that every project of this type meet many wide-rangingneeds and goals.Here are some of the objectives you’ll likely want to keep in mind when planning a facilityupgrade, addition or new construction:You want to retain your best customers. Your consistent, long-term customers got your dealershipwhere you are today. Give them more of what they like about your business. Or givethem a better version of whatever it is you believe keeps them coming back.You want your fixed operations facilities to attract and hold onto new customers—the firsttimevisitors who are looking for an alternative to their current (or former) services provider,as well as your store’s new- and used-vehicle purchasers. When the salesperson or sales managerintroduces his or her new customer to your staff and your service facilities (they’re doingthat, aren’t they?) you want the impression to be the best possible: “I want to have thesefolks care for my vehicle.”You want your facility to keep up with the competition. An attractive and distinctive facilitytells your customers that you care about your fixed operations offerings as much as the dealershipcares about the showroom that attracted them in the first place. Offer them somethingthat the other dealers in your area don’t—or something that the independent shopscan’t.You want to keep your best employees. Does your facility as it exists today give your employeespride in the place that they work? Is it someplace that they (and you) want to spend eightto 10 hours a day? And is it a place that will continue to attract the best employees in thefuture?You want your business to fulfill the promises of your dealership’s local advertising and marketingprograms. As well as the promises of your manufacturers’ regional and national advertisingcampaigns. Is what your customers find the same thing that they expected when theydecided to patronize your business?You want a facility that makes it easier to work more efficiently. Plan now to add the featuresthat your fixed operations departments now lack. And improve those things that canbe better executed.You want to meet or anticipate changing requirements. Have the manufacturers’ guidelineschanged? Are they about to? Have there been changes in local, state or federal requirementsthat have to be considered? Now is also the time to address new or changing safety requirements.You want to conserve resources and save money. It’s easier to build-in the features and systemsthat will make your facility more efficient for the long-term than to try to add or modifythem later.You want to maximize profitability. Ultimately, everything you do will have an impact onthe financial success of your operation. Consider the changes, features and appearance thatwill yield the most positive results.If you can meet those objectives while giving your customers the best possible experience,you’ll have a recipe for success!Fixed Ops Magazine17853 Santiago Blvd., Ste. 107-467Villa Park, CA 92861877-349-3367Fax email@example.comEditorial / AdvertisingNick West - Publisher877-349-3367Fax firstname.lastname@example.orgSarah Humphreys - Editor714email@example.comProductionAshley Scott - Art Directorart@fixedopsmag.comCirculation877-FIXEDOPScirculation@fixedopsmag.comFixed Ops Magazine is published monthly byPrism Automotive, LLC, 17853 SantiagoBlvd., Suite 107-467, Villa Park, CA 92861;phone 877-349-3367. Subscriptions are free toqualified subscribers in the U.S. who areactive as fixed operations directors or servicemanagers of franchised automobile dealerships.Additional subscriptions are availableat: $60/year/US; $85/year/Canada;$180/year/other foreign. Single issue price,$10. Periodicals postage paid at Fort Worth,TX. POSTMASTER: Send address changes to:Fixed Ops Magazine, 17853 Santiago Blvd.,Suite 107-467, Villa Park, CA 92861.Reproduction or use, without express writtenpermission of publisher, of editorial or graphiccontent in any manner is prohibited. Thestatements and opinions expressed herein arethose of individual authors and do not necessarilyrepresent the views of Fixed OpsMagazine or Prism Automotive, LLC. Theappearance of advertisers does not constitutean endorsement of the products or servicesfeatured. All rights reserved.Nick West / PublisherPhone: (877) 349-3367E-mail: Nick@FixedOpsMag.comp. 6May 2007Fixed Ops Magazine
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Industry NewsRhino Outdoor International appoints CEO and presidentRhino Outdoor International Inc., a development company that consolidatesand operates outdoor activity based businesses, has appointedHoward Pearl, president of Rhino Off-Road Industries, to the positionof CEO and president of Rhino Outdoor International. The appointmentfollows the resignation of Jeff Criswell as president of ROI. WaltTatum, who has held the position of CEO, will continue to serve aschairman of the Board for ROI.Pearl has more than 25 years of business leadership with both publicand private companies. He has been involved in the marketing and positioningof products for numerous companies, including Ford MotorCo., Lincoln Mercury, Converse and Johnson & Johnson.______________________________________________________Design Engineering puts out call for 2007 sponsorship programDesign Engineering Inc., an aftermarket supplier of thermal tuningproducts and cryogenic intake systems, is offering product sponsorshipsfor any interested individuals participating in nationwide and localraces and/or scheduled shows or events.This program is designed to help get a vehicle equipped with DesignEngineering Inc.’s products in return for show/race exposure alongwith the valuable feedback used to continue designing award-winningproducts.For consideration log on to www.DesignEngineering.com and click onthe “downloads” link and review the sponsorship application thatincludes proposal requirements and release forms.______________________________________________________First quarter best in history of Auto/MateAuto/Mate Dealership Systems, ranked the highest for overall customersatisfaction in the last three combined NADA surveys, announced thatthe first quarter 2007 was the best ever in the company’s history of nearly30 years. The DMS provider reported the highest revenues and completedmore dealer installations than in any previous quarter.In 2006, Auto/Mate grew revenue by more than 25 percent and openedsales offices with staff in New England, New York, Texas,Pennsylvania/Ohio and the southeast region.The company’s growth is attributed to the addition of many new featuresand functionalities within its DMS, culminating in the January2007 release of AMPS (Automotive Management Productivity Suite), acomprehensive system with more than 20 fully integrated modules tosuit any size dealership and to address every need, including fixed operations.During 2007, Auto/Mate plans to open five more sales offices inNorthern and Southern California, Florida, Chicago and in the mid-Atlantic region.Events CalendarJune5 - 6TLS Automotive CRM Summit 2007The Ritz-Carlton, Marina Del Rey, Calif.;www.tlsummits.com, (415) 553-4142.July26 - 28I-Car International Annual MeetingOmni Orlando Resort, Orlando;www.i-car.com, (800) 422-7872.August14 - 15E.N.G.'s Automotive CRM SummitManhattan Beach, Calif.; www.wuaautocrm.com,(866) 559-1189.October7 - 9Western Car Wash Association AnnualConvention & Trade ShowLas Vegas Hilton Hotel, Las Vegas; www.wcwa.org,(800) 344-9274.October / November30 - 1AAPEX, Sands Expo CenterLas Vegas; www.aapexshow.com, (301) 654-6664.30 - 2SEMA ShowLas Vegas Convention CenterLas Vegas; www.sema.org, (909) 396-0289.31 - 3NACEMandalay Bay Convention CenterLas Vegas; www.naceexpo.com, (888) 529-1641.To have your organization's eventlisted on Fixed Ops Magazine's calendar,please contact Editor Sarah Humphreys at(714) 271-4224 or firstname.lastname@example.org. 8 May 2007Fixed Ops Magazine
ATTENTIONMARKETERSThe fixed operations departments of franchised new car dealers (service, parts and body shop) nowaccount for nearly 60% of the operating profits in dealerships nationwide.Is your company getting its share of this $85 billion-plus in annual fixed operations revenue? How will youmeet your sales and marketing objectives in the year ahead? Fixed Ops Magazine is the single mostfocused and cost-efficient way to reach and sell to this critical audience -- some of your best customers.Fixed Ops Magazine is the only publication that reaches the fixed operations director at every singlenew vehicle dealership in America. Our BPA-audited circulation of 24,000 copies per month is your assurancethat your sales message has Total Market Coverage.If you sell a product, service or technology to the service, parts or body shop departments at new vehicledealerships ----or if you want to ----there's only one way to reach 100% of this audience: advertise in FixedOps Magazine. We'll show you how FOM can be the key to increased visibility and increased revenue.Call or e-mail today to start your sales-building ad campaign in Fixed Ops Magazine.The Automotive Industry's Leading Fixed Operations ResourceTelephone: 877-349-3367E-mail: Info@FixedOpsMag.com
Industry NewsHella Inc. launches new Web siteHella Inc., the North American aftermarketsubsidiary of automotive lighting andelectronics supplier Hella, announced thelaunch of its new Web site unveiling newand enhanced sections designed tostrengthen the user’s experience.The redesigned Web site matches the layoutfor all Hella company Web sites worldwideusing the same “look and feel” andeasy-to-use navigation. The site is dedicatedto the aftermarket, original equipmentmanufacturers, and special OE customers.The new Web site is categorized into fivesections: Automotive Industry,Wholesalers, Garages, Consumers andSpecial OE. Each section includes more indepthinformation pertaining to each areaincluding exciting interactive videos andup-to-date information in the Consumersection.In addition, the home page includes quicklinks to the Aftermarket Club, which offerstechnical information and order status, theonline catalog for fast and efficient accessto Hella’s lighting and accessory products,and a link to Behr Hella Service, Behr andHella’s joint venture for engine cooling andair conditioning.Customers can access the new Web site atthe same addresses: www.hellausa.com orwww.hellacanada.com.Total names new Canadian salesmanager for its lubricants divisionTotal has named André Bolduc theCanadian sales manager for its lubricantsdivision. In this position, Bolduc, whobrings with him 35 years of experience inthe automobile industry, will be responsiblefor identifying and securing sales opportunitiesfor Total.Prior to joining Total, Bolduc served withAuto-Camping Ltd., a distributor of automotiveequipment and replacement parts,as its national product manager for ELFsynthetic lubricant.RampBoss on displayRampBoss, a manufacturer of automotivedisplay lifts, has helped showcase cars attwo major events in 2007: the Super Bowl41 Sports Illustrated—Cadillac party inSouth Beach in February, and the GMCreative Services Winter Blast HotProducts exhibit at Autorama in Detroit inMarch.For information, circle 7 on RS card.p. 10 May 2007 Fixed Ops Magazine
Rotary Lift warns aftermarket parts can voidvehicle lift safety certificationDealers who want to ensure that they are buyingvehicle lifts that reach the highest levels ofsafety and performance choose lifts that havebeen third-party certified to comply withANSI/ALI ALCTV-1998 standards, lift manufacturerRotary Lift says.Forty-seven states plus Washington, D.C., andnumerous local governments use theInternational Building Code, which requiresthat all installed vehicle lifts be certified to thisstandard. Other regulators, such as New YorkState, Worksafe B.C., and the Ontario Ministryof Labour, have taken even stronger steps, withregion-wide regulation supporting requirementsfor ANSI-compliant lifts. Many dealers don’trealize that installing aftermarket replacementparts on a vehicle lift can invalidate the lift’s certificationand create risk management issues.“Certification of an automotive lift includes aprocess for documenting the lift’s componentswithin the control drawings, submittingrequired stress calculations, and documentingthat component performance does not adverselyimpact lift performance,” explains R.W.O’Gorman, president/CEO of the AutomotiveLift Institute. “Replacing worn, damaged orbroken parts only with parts furnished orapproved by the original equipment manufactureris key to a dealer’s risk managementefforts. If you were responsible and savvyenough to buy a third-party certified lift in thefirst place, why potentially place safety and performanceat risk by installing imitation parts?”Rotary Lift recommends using only originalequipmentreplacement parts to ensure properfit and function on any brand of vehicle lift.OE parts were designed and built specificallyfor a particular lift. Aftermarket parts arereverse-engineered to fit. If they aren’t made ofthe same materials as the originals, they maynot last as long, resulting in increased downtime.The tolerances of the parts may also bedifferent from the originals. This can have aserious effect on lift performance and reliabilityover time. Plus, because they are built by outsidecompanies, aftermarket parts will notalways reflect the latest design improvementsmade by the lift manufacturer.“Many people think that buying imitation partswill save them time or money,” says RonLainhart, Rotary Lift parts and service manager.“But often that isn’t the case. Sometimes imitationparts actually cost more or they’re not instock, so you have to wait longer than youwould if you bought an OE part from your localdistributor.”CorrectionMarch’s story When Goodwill Goes Badimplied that Delaware, New Mexico, Alabama,For information, circle 8 on RS card.Arkansas, California, Illinois, Mississippi, NewJersey, Ohio, Tennessee and Texas have a grossreceiptstax. In fact, the only states the authorsurveyed that have a gross-receipts tax areDelaware and New Mexico.May 2007 Fixed Ops Magazine p. 11
FeatureFixed GreensIt’s easy to design an environmentally friendly dealership.By Ashley Katz and Pat Lobbreen building is a hot topicGamong the building community,regardless of thetype of building one occupies.Increasingly morebuildings, including dealerships, arebuilding with the environment inmind—and with good reason. Greenbuildings are high performance. Theyuse less energy, water and naturalresources, create less waste and arehealthier for the people inside.Led by the U.S. Green BuildingCouncil and its LEED Green BuildingRating System, green building is changingthe way we design, build, operateand think about dealerships’ fixed opsdepartments.Why build green?The built environment has a profoundimpact on our natural environment,economy, health and productivity. Inthe United States alone, buildingsaccount for 39 percent of total energyconsumption, 71 percent of electricityconsumption, 39 percent of carbondioxide emissions and 36 percent of allgreenhouse-gas emissions. Buildings areresponsible for a considerable amountof damage that has transpired to ourEarth.Green buildings, on the other hand,are able to undo some of the damagethe built environment has caused onthe world. They save 30 percent to 50percent of energy, 35 percent of carbondioxide emissions, 40 percent of waterand 70 percent of solid waste.In addition, reducing the environmentalfootprint of a buildingdecreases its impact onthe land by using lessenergy, recyclingmaterials andusing less water.Green buildingsare alsohigh-performancestructuresthat yield economicbenefits,including reducingutility bills by20 percent to 50 percentand using 30 percentless water.One of the most costlyaspects of a building arethe people inside.Companies lose $58 billionfrom employee sickand absentee time annually.Green buildings add$180 billion in increased worker productivityevery year. This is becausegreen buildings have less mold, mildewand toxins than that living in conventionalbuildings. They also have openwindows and better air flow, whichleads to better air quality. Employeeswho work inside the building are alsonoticeably more productive. Whetherit’s the increased sunlight, views ofnature, or the heightened thermaland acoustic environments,employees are happier to goto work every day—a benefitthat can’t be beat.Getting certifiedLEED-certified buildingshave lower operatingcosts, and happierand healthier occupantsthan conventionally builtstructures. LEED certification isvisible recognition of environmentalleadership, providing independentthird-party verification and validationthat a building is green.Certification also puts in place standardsand measures for the building’sperformance over time, andmay make the owner eligible for agrowing number of state and localgovernment incentives.p. 12 May 2007 Fixed Ops Magazine
The LEED Rating System is brokendown into credits within five categories:Sustainable Design, Water Efficiency,Energy and Atmosphere, Materials andResources, and Indoor EnvironmentalQuality. Projects earn points for meetingthe requirements of each credit, suchas using a specified percentage of recycledmaterials in construction or demonstratinga certain percentage reductionin water usage. Projects can earn one offour levels of LEED certification,depending on the number of pointsthey earn: Certified, Silver, Gold orPlatinum.Green buildings arealso high-performancestructures that yield “economic benefits.”The first step in the certification processis registration with USGBC, which indicatesa project team’s intent to achieveLEED certification. Projects typicallyregister with USGBC during the designphase, as registering during the earlyphases ensures the maximum potentialfor achieving certification.Continued on p. 14For information, circle 9 on RS card.May 2007 Fixed Ops Magazine p. 13
Registration establishes contact withthe USGBC and provides the projectteam with access to essential information,software tools and communications.After a building registers, the projectteam compiles documentation todemonstrate that the building meetsthe requirements of each credit. Uponthe building’s completion, this documentationis submitted to the USGBCfor review. After the review, which generallytakes about three months, thebuilding is awarded its LEED certificationand plaque—visible symbols of thisimpressive accomplishment.About USGBCCurrently, the U.S. GreenBuilding Council has certifiednearly 800 buildingsand more than 5,500 buildingsunder construction willcertify. For more informationabout USGBC and LEED,visit www.usgbc.org.Dealerships and fixed operations areamong the family of buildings exploringthe LEED green building options.Pat Lobb Toyota in McKinney, Texas,is among them, and was certifiedLEED Silver this past year.LEED on the mindOpened in August 2006, Pat LobbToyota was designed from the groundup with LEED standards in mind. Forexample, the dealership faces east,allowing the hot evening sun to hit therear of the building, which faces west.Both west and north sides of the facilityare covered in plants to absorb thesun’s heat. Energy-saving glass wasused in construction and the dealership’sinterior was designed to maximizethe use of natural light. An 8,660-gallon cistern captures water generatedby air conditioners and rain; the collectedwater irrigates the landscaping.The dealership’s car wash recycles thewash water, which is ionized to eliminatethe traditional blow dry.In addition, the roof system is composedof multiple layers of metal decking,concrete mix, foam and a whiteroof membrane. This system savesenough energy to allow the dealershipto afford air conditioning in both theservice and parts departments.“Dealerships and fixedoperations are amongthe family of buildingsexploring the LEED greenbuilding options.”p. 14 May 2007 Fixed Ops Magazine
The construction project also took soilconservation into account. The topsoilon the land where the dealership nowstands was removed and saved whenthe grading was done for the site. Thetopsoil has been relocated to the grassyareas of the dealership without wastingthe valuable soil. More than 2,700truckloads of soil were relocated ratherthan trucked away, resulting in bothenvironmental and financial savings.When construction was complete lastsummer, more than 80 percent of theconstruction waste—including concrete,wood, steel and trash—was recycled.Green building has long-term benefitsfor both your business and the environment.And it can send an importantand unique message to your customers.Pat Lobb is principal of Pat Lobb Toyota andAshley Katz is media coordinator of the U.S.Green BuildingCouncil. For information, circle 10 on RS card.May 2007Fixed Ops Magazine p. 15
FeatureInside the BoxGood design can be a fixed ops department’s best sales tool.By Barry WellsSuccessful dealers realize thattheir furniture, fixtures andfinishes are important facilitytools and not just an expense.The acknowledgment thatthey run and operate an automotive“retail” environment is a departure fromthe mindset and practices of the past.These aspects of dealership designimpact both the sales side of your facility,as well as the fixed operations side.Seventy percent of customers havealready made up their minds aboutwhat vehicle they intend to buy prior tostepping foot into your facility. If yourdealership does not reflect the advertisingmessage they have already embracedprior to arriving at your facility they willexperience a “disconnect” with thebrand. This brand-disconnect is called“retail vertigo.”When customers experience “retail vertigo,”they become skeptical and disillusionedwith the product. This can sendthe customers to another like-branddealer to buy their vehicles—or worse,send them to another manufactureraltogether. Automotive manufacturesspend billions of dollars creating abrand and an image that reflect thelifestyle and values of your customer.Dealers deliver a very positive and powerfulcustomer experience when theirautomotive retail environments syncwith the branding initiative.This is why manufacturers are nowfocused on making sure all their distributionpartners have facilities thatreflect their brand proposition and thesame baseline experience at every dealership,regardless of location. This canbe a very powerful, visceral and tactileexperience that can generate long-term,lifetime customers who associate, identifyand embrace the brand.p. 16 May 2007 Fixed Ops Magazine
Consumer brand-identification can rangefrom: how they see and project themselves,buying patterns and lifestyle choices.As a dealer, the cure for “retail vertigo”is to make sure you understand your customerand align your facility, operationsand inventory to provide your customerproducts and services that reinforce thisperception.Beyond the cloneEven though it is good practice toembrace your image program, it is evenbetter to differentiate yourself from theother same-brand dealerships in yourcommunity. If you are doing the minimumyour program requires, you willachieve the minimal results. In nature, thepeacock uses his beautiful plumage toattract its mate and stand out from thecrowd. Use your image brand guidelinesas the starting point.However, move beyond the minimumguidelines and create a dealership thatsets you apart from the other same-branddealer. Your facility should highlight yourmanagement philosophy, best practices,unique culture, immediate communityand style.This, of course, should extend to allaspects of the dealership. Investing in theservice department, after-market sales,accessories and life-style products willprove to be a big sellers when they are displayedin a retail setting that supports andaligns with the dealership’s brand image.Image programs should provide a baselineexperience, but not the entire experience.Compare your facility to other like branddealers in the community. They are yourreal competition.Buying for successMany image programs have expensive furnitureitems suggested by the manufacturerfor customer-contact areas, like service,in the dealership. Usually, products recommendedgot that way as the result ofinterpersonal relationships that existbetween the design firm (consultant) andthe local vendors (furniture, tile, etc.) whosell various brands of office furniture, tile,millwork, etc.The relationship-based sales processFor information, circle 11 on RS card.between the designer (image consultant)and vendor results in those products’becoming part of your image program.Continued on p. 18May 2007Fixed Ops Magazine p. 17
This doesn’t mean that their selection iswrong; it just means that you might wantto make a decision that is right for yourdealership while still supporting yourbrand’s image goal.Make sure you really have to spend the$500 on a visitor chair. Often, a high-quality,similar design and equally warrantedbrand for $250 (or less) will work. Theseindustries (furniture, tile and millwork) arecompetitive and many products have asimilar aesthetic look and feel. At the endof the day, it is still your money and youhave to pay for it. In addition, every dollaryou save in one area can be used for additionalmarketing and branding elementsin another area.Critical environmentsDon’t spend all your money on the frontend of your facility. With most dealershiprevenue coming from your service andparts departments, you should consider anequal investment in this area. Your servicedepartment says more to your customerthan any other part of your operation.Customers are smart enough to realizethat new-car showrooms are built to enticethem to buy. But how you service themwill keep their attention and future business.These areas should be looked at as animportant facility tool and not as anexpense. Often, the better buying decisionhas a higher initial cost, but saves you significantmoney over the life of your facility.When planning your facility, budget thisarea first. Also avoid the temptation tomake the first budget-overrun cuts here.Most cuts in service operations end upbecoming life-long maintenance expensesthat disrupt business operations, such asshop and service floors.Get rid of oil-stained, paint-peeling, epoxychippedsurfaces. Use quality floor coveringsthat provide service drives that makeyou feel like you have arrived at a nice,upscale hotel, not an oil-soaked mechanicshop. A recent visit to Mercedes of FortMyers, Fla., showed use of their shop environmentfor more than just auto-repair.Recently, they hosted a local charity eventthat included serving their guests food anddrinks in their service department. “Withbeautifully tiled floors, why not?” says IanDucoff, service manager. “We invested ina shop floor that will never have to bereplaced and is easy to clean and maintain.This floor serves as a selling tool whenbuyers visit our facility and provides us anadditional space to host many events thatbring in hundreds of potential customers.”Holiday Chevrolet of Farmington, Mich.,indicated that by opening up the shopenvironments to its customers, it has generatedsignificantly higher service sales,including oil sales up 75 percent after thefirst 90 days.“We attracted three master techs after weopened up and this has saved us significantlyin human-resource costs,” theowner adds. “By building this dealershipfrom the back to the front, we havesecured our future and success in our community.”When you analyze the long-term costs ofresurfacing floors every four to five years,the right solution can be quality shopfloor covering that avoids expensive, neverendingand on-going deferred maintenance.Enrollment successDetermination of whether a manufacturerprogram is successful can be traced to dealershipenrollment levels. There are manybrands that still have a low percentage ofdealers implementing their programs. Thislack of dealer support foreshadows problemswith the program and the failure ofthe manufacturer to be in touch with marketand dealership conditions.Get involved by talking with your manufacturer.Make sure that there is a cross sectionof dealer voices so all market levelscan participate. Greater participation byall dealers will lead to improved brand perceptionby the consumer. Who knowsbetter how to retail cars than you?Items to watch for:• Consistency. Brand-logo, lifestyle graphicsand image elements should be displayedin facilities in the same method andmanner from dealership to dealership.• Display. Too often, manufacturers sendout marketing collateral that is displayedin as many different methods as there aredealers. Marketing collateral should beuniformly displayed in every facility inorder to have the right impact on the buyingpublic.• Scalability. Large-market dealers have alarger volume against which to spread costof expensive image program elements.Small-market dealers don’t have thatoption.• Choice. Often there is only one recommendedmarketing solution and this is abad idea. Having only a single source forapproved vendors and/or products leadsto higher costs and apathy in service andsupport.p. 18 May 2007 Fixed Ops Magazine
• Budget. Good design doesn’t need tocost a fortune. Look around at the explosionof high-quality, well-designed productsavailable today. Global sourcing isallowing many manufacturers to reducecosts of manufacturing so that even highquality is very affordable.• Perception. Placing expensive furniturearound a new-car showroom does notnecessarily rub off on the brand and elevatethe brand. Furniture doesn’t sellcars. Imbedded graphics and lifestyle tieins,along with quality furniture correctlyapplied in your environment can makethe right statement and positive impact.• Connection. Design should reflectbrand image and market message.Designs and solutions should supportcustomers’ life-style, self-image andcomfort.Assembling your teamIt is an exciting time to be in the automotivebusiness. Dealership growth can beachieved from many segments, especiallythe fixed ops departments. Dealers whoembrace the complete automotive “retail”philosophy will grow profits from multiplesegments. Profits can be obtainedfrom vehicle sales to lifestyle accessoriesand all levels of vehicle maintenance.Your facility is the gateway to this success.Work with vendors who understandautomotive retail design. Finding vendorswho can design for your facility is critical.We are a very specialized society andevery market segment has specialists wholead their fields in research, study andadvancement.In healthcare, you go to a specialist foryour ailment. If you were building ahotel, you would select vendors whofocus on that market segment.Specialists are in touch with the latestsuccesses and trends in that industry.Automotive dealers should do thesame. Work with vendors who understandyour business and have an eye forthe future of your industry.You shouldn’t have to teach someoneabout your business. Rather, an expertshould be telling you something youdon’t already know. That is where youwill find value beyond the price you paidfor their product.For information, circle 12 on RS card.Barry Wells is president of AutomotiveFacilities, a supplier of materials anddesign to dealerships. May 2007Fixed Ops Magazine p. 19
FeatureThe Fire Inside PartIncorporating fluid recycling indesign heats up fixed ops profits.By Howard Levens1uilding a new shop orBremodeling a facility takes alot of planning, coordinatingand money. Theprocess can take anywherefrom a couple of months to multipleyears. During that time, there are manyimportant decisions that need to bemade in terms of the actual site, thebuilding and the equipment that isinstalled and used.Many times there is so much to considerthat important parts are overlooked,such as the heating system. Some peopleare not aware of the differentoptions that are available when itcomes to heating a facility. Shopsthat work with motor oil, transmissionfluid, hydraulic fluidand other petroleum-basedproducts have the ability toinstall an easy-to-useused-oil-fired boilerand unit heatingsystem thatrecycles the used oil on site into freeheat and hot water. Used oil is an itemfound in quantity in auto dealerships.The oil is converted through the boilerinto heat or hot water and is thenpumped back through the facility.Slippery issueOften, used oil is seen as a liabilityor a problem, as facilities arerequired to dispose of it in a safemanner. Recycling used oil onsite with the used-oil-fired boilerand unit-heater system eliminatesall disposal and haulingcosts that are associated withoil disposal. The facilityowner still has a cradle-tograveliability for the oil,which means that the company orindividual who creates the usedoil is liable for the oil until it isproperly disposedof. Installing theused-oil burneron site eliminatesthepossibility of being liable for any spillor vandalism of the oil after it leavesthe property.The Environmental Protection Agencyregulates the process in which companiesdispose of the used oil stating that,p. 20 May 2007 Fixed Ops Magazine
“Used oil may be burned for energy recoveryin used-oil-fired space heaters providedthat the heater burns only used-oilchangers or boilers.” The used-oil boilers,heaters and furnaces meet the EPA’smethod of on-site recycling of used oils.In addition, the system needs to meet ULand/or ASME specifications for unitheaters and boilers. It is important tocheck with local jurisdictions becausethey may have different regulations on theinstallation of the equipment.Making a planInstalling the used-oil-fired heater duringa remodel or new construction is a simpletask and can be accomplished with minimumdisruption to the ongoing workactivity of the facility. Most of the unitheaters are installed and attached to theroof support system and dealers are ableto use their existing used-oil tanks to createheat and hot water.Installing a used-oil-fired boiler or commercialwater heater takes additional planningand preparation. A reputablemechanical contractor should be consultedfor the design, construction and installationof the system. If a new facility isbeing planned, the system can be installedas a radiant floor heating option usingradiant floor pex tubing inside or frostpads outside, as well as a hydronic hotwater-unitheating system. Some systemshave both pex tubing and unit heaters,depending on the building design.The used-oil-fired boiler hot-water systemis very versatile and, once installed, canprovide the facility owner many optionsfor heating the shop areas, offices, bathroomsand parts areas. In addition, asnow- and ice-melt system can bedesigned into facilities that are locatedin cold and snowy areas of the country.Some of the boiler manufacturers havebuilt-in hot-water coils that can providehot or warm water for car washes.Using warm water can reduce the chemicaland soap requirements by at least 25percent. This type of system is notrestricted to a new facility, but can alsobe installed in existing facilities.Continued on p. 22For information, circle 13 on RS card.May 2007Fixed Ops Magazine p. 21
Heating systems should be installedby a reputable contractor.Better flowMost companies see a return on theirinvestment within 12 to 18 months fora heater and two to three years on averagefor a boiler, depending on the costof the system and installation. Afterthat, the heat and water is virtually free.Many customers have paid for their systemswithin the first year of the installation.Not only is the dealership ableto save money with every gallon that itburns by pumping it back into the facility,but it also saves money in disposingthe oil.Facility owners should perform a costbenefit analysis test to evaluate the costassociated with purchasing the currentfuel and maintenance for the currentsystem compared to the cost of the boilerand unit heater. In addition, a companyshould evaluate how much itwould save every year on heating itsshop. Refer to the return on investmentcomputation sheet below to see ifadding the used-oil boiler and unitheater would be beneficial to yourbuilding and company.Many facilities that perform oilchanges collect enough used oil tofulfill all of their heating needsfor the shop. DuringDealerships can see a return oninvestment in 12 to 18 months.the warmer months, most businessesdo not pay any heating bill because allthe heat they need is supplied fromtheir used oil. During the wintermonths, most facilities only pay a verysmall amount. Once the equipment iscomplete, shops can experience ongoingsavings of thousands of dollars peryear.p. 22 May 2007 Fixed Ops Magazine
“We use to pay about $1,200 per monthon our natural-gas bill during the coldermonths, but since we have installed aboiler our gas bills have been eliminatedwith very little maintenance,” says ScottReinford, general manager of RainfordLube & Oil in Yakima, Wash., whichinstalled a boiler in December 1998.“We use the boiler to create heat for ourcar wash water, tunnel and frost pads,which makes it safe for people to get outof their cars.”In the August issue of Fixed Ops, wewill further explore the cost savings associatedwith recycling used heating oil.Howard Levens is the owner ofNorthwest IndustrialEquipment Inc., which sellsand services boilers and unitheaters. He has been in theindustry since 1996. The benefits of installing the system arelifelong. It saves facilities money onheating, disposal of the used oil, theburden of finding a company to haulaway the oil, and the risk of damage tothe environment by taking away thechance of a hazardous-materials spill.For information, circle 14 on RS card.May 2007Fixed Ops Magazine p. 23
FeatureGolden RetrieverAutomated storage systems with direct interfacecan be the fixed ops manager’s best friend.By Michael Clearyore and more automotiveMdealer parts managershave been implementingautomated vertical storagesystems to improve use ofspace and productivity within theirdepartments. Large quantities of partscan be stocked more efficiently andmore densely within a small footprint,due to the height-optimized storagegained by the automated vertical storagesystems. It is not uncommon tofree up from 30 percent to 50 percentof expensive floor space for other uses.For example, one dealership inArizona was able to move all its sheetmetal and body parts into its partsdepartment and vacate an off-site warehousethat was being rented.What they areThere are two types of vertical storagesystems. The most common withinautomotive parts departments is thevertical carousel. Vertical carouselsstore parts on carriers that rotate bidirectly,allowing fast retrieval of thestored parts. Typical carriers areapproximately 130 inches wide by 24inches deep.Vertical carousels are ideal for automotivesmall parts storage. Twenty-fourinch-deepplastic bins can be dividedinto up to six compartment depths.These bins will store parts—otherwisestored on several shelving locations—ina 4-inch or 6-inch-wide location on theautomated storage system. The othertype of vertical storage system is knownas a vertical lift module. In this device,an extractor in the middle of the unitaccesses storage trays. The extractorretrieves the pans that are stored in thefront and back of the unit and deliversthem through an ergonomicallydesigned opening. Parts are stored ineach pan at a height-optimized basis.Direct interfaceInternet-based automated vertical storagesystems are able to interface to theparts department’s inventory managementsoftware system, further increasingproductivity and accuracy of partsretrieval. This two-way communicationensures continuous inventory updates.“Two-waycommunicationensurescontinuousinventoryupdates.”Order fulfillmentWhen a customer orders a part at theretail counter, if that part is stored inthe unit, the automated storage system’scontrols capture the order (pick)ticket that is created. An LED light onthe system’s controller indicates anorder is ready for processing. Whenthe “enter” key is pressed, the verticalcarousel or vertical lift module bringsthe parts to the opening within seconds.(No more walking in dark aislessearching for that part!)p. 24 May 2007 Fixed Ops Magazine
The display monitor on the storage systemwill indicate the part number, locationand quantity to be picked, as well asthe order number.After the part is picked, the operatorpresses “task complete” key and thetransaction is sent back to the partsdepartment’s inventory managementsoftware to verify the transaction. As oneparts manager put it, “My parts departmentis now like a bank, with everytransaction properly documented.”Service technicians can substantiallyreduce their waiting time for neededparts and spend more time in the servicebay. Some dealerships have incorporateda “station” in the service area forthe service technicians to order theirparts. A parts “runner” then brings partsto them. Therefore, the technician neverhas to leave his work area,Taking stockThe greatest improvement associatedwith the direct-interface arrangement isthe ability to manage the inventory moreaccurately. Without the two-way communication,separate data bases had to bemaintained. One was on the automatedstorage system and the other, of course,was on the parts management softwaresystem. These were often out of sync,requiring cycle counts on a regular basisto make sure they were both current.The two-way interface verifies task completionsand quantities with each transaction.Discrepancies are noted immediatelyand can be addressed right away.Another key area that is now simplifiedis the receiving of the parts. When partsarrive, the software scans the bar codelabel and creates a file for parts to bestored within the automated storage system.This now relieves the operator fromentering the parts into the system twice.Automated storage systems are no longer“islands” with the parts inventory managementsoftware. In fact, parts managerscan access all the reports, such ascount discrepancies, from the comfort oftheir home on the dealer’s Internet.These systems are saving space, savingtime and building a more efficient flowof parts into fixed ops departments.Michael Cleary is the automotivedealer market manager forHanel Storage Systems, whichprovides solutions for auto dealer’sparts departments. For information, circle 15 on RS card.May 2007Fixed Ops Magazine p. 25
Master PlannerGetting help to achieve a well-designed servicedepartment is key to higher profits.By Cheryl Wilsonith the increasingWemphasis on service asa profit generator,newly built and renovatedservice departmentsmust be designed to present aprofessional atmosphere, giving thecustomers confidence in the store’sability to service their high-tech vehicles.After all, it is customers’ positiveperception and good experience thatearns their repeat business.Facility plannersExperienced, OE-approved facilityplanning designers provide expertisein laying out service areas, partsdepartments, lube bays and parkinglot lighting. An ideal planner providesthe links between the OEM, theequipment vendors, the architect andthe builder tied together—one dealerworking relationship with one expertfacility planning service.Breaking the planning process downcreates more opportunity to assistwith dealership design from the planningstages to the building stages;from simple plans to those that aremore complex.There are many benefits to facilityplanning throughout all the stages ofdealership design and development.All areas of a dealership are inter-connectedand the layout of the facilitywill greatly affect how the day-to-dayoperations will be carried out.Thoughtful planning reduces problematicareas and costly renovations.It also makes necessary future updateseasier because the planner is thinkingabout what the dealership needs toachieve now as well aswhat it aspires toachieve.And, as the world seeks to be a greenerplace, it is believed that facilityplanning will have an even bigger rolein contributing to the success andenvironmental impact of the automotivefacility; providing valuable informationabout new techniques andnew equipment and materials.Maximize potentialConsidering what customers are seeingas soon as they drive onto the premisesor walk into the building canhave a large impact onrevenue.p. 26 May 2007Fixed Ops Magazine
It is important to create a goodimpression right from the start.Facility planning takes into accounteverything from how customers arriveat the showroom or the service drivethruto how far a technician isrequired to walk to the parts department.Good planning can mean an increasein technician productivity, which canlead to an increase in revenue. Facilityplanners work with the architect andengineers to provide them with essentialinformation, including an optimallifting device layout to maximizethe use of space for meeting servicesales goals, or an outline for servicereception and related service salesareas, such as a tire store or rapid-lubeservices.The plans provided by a facility planneralso help control constructioncosts by clearly locating and specifyingequipment and providing electricaland mechanical requirements upfront. The information supplied tothe builder regarding services—such asmotor oil dispensing and exhaustextracting—can reduce installationtime by reducing the amount of guesswork over where and how to locatethe equipment and systems. Theseplans are also valuable tools for budgetingand purchasing purposes.Technology servicesIt doesn’t stop with facility planningdesign layouts and equipment. Somecompanies offer technology to createand monitor wireless dealer networksystems. These services can providesolutions backed by a highly knowledgeabletechnical support team:• Site survey, LAN evaluation,design and integration.• Internet connectivity coordinatedwith business-grade high-speedInternet providers.• Wireless coordination,Web hosting and e-mail services.• Firewalls and security systems.• Help desk and remote LANmonitoring services.This support ensures that dealershipsmeet the requirements of the GLBAct.Tool organizationA recent trend in dealership renovationsor new builds also includes toolorganization systems. Service managersunderstand the value of anorganized system for tool placementand check-out, increasing the productivityof technicians. Dealer principalsare requesting these systems moreand more as a means to secure theirtool investment.For information, circle 16 on RS card.No matter how many questions youhave about building your new servicefacility, your design consultant is theplace to go for answers. You will getthe information you need to help feelsecure about your new facility andthe confidence that your equipmentand systems will help maximize theprofitability of your service department.Cheryl Wilson is general managerof Dealer Equipment andServices, a business unit ofSPX Service Solutions thatoffers dealerships the expertiseand experience in planningand designing an efficient service and partsdepartment. May 2007Fixed Ops Magazine p. 27
Service DepartmentPay Plans &Management—Are They MutuallyExclusive?By Tyler Robbinsp. 28 May 2007 Fixed Ops Magazine
Always a popular topic, andone that I am constantlyasked about as I travel NorthAmerica, is that of service payplans.Certainly in our business, as with anybusiness, performance enhancements arean absolute necessity and, pay plans cango a long way toward ensuring performanceimprovement, and they can just aseasily result in stagnant performance.Shop owners, dealers, directors and managersall want to ensure the ongoinggrowth of their business, and they arereliant upon their front line “force” toensure this happens.The right planThe first challenge is that rather thandeveloping a pay plan to grow their business,most attempt to develop a pay planthat resolves all of their operational, customersatisfaction procedural, expenseand sales performances with one allencompassing, super-duper, catch-all payplan. The second, and probably bigger,challenge is that such a pay plan typicallydoes not have the intended effect and sothe search for that super-duper pay plangoes on.When developing pay plans for your serviceconsultants, consider—on a muchmore simplified level—what you trulyexpect them to do. Service consultants,in a nutshell, are responsible for sellingmaintenance and repairs.Now, realistically, repairs are not as muchof a “sale” as they are a provided cure.Think about it. A customer comes intoyour operation with a ticking noise; thecustomer already knows that he or shehas a noise and obviously wants it fixed.There is very little “selling” that actuallyhas to occur here, by virtue of the customer’seven arriving at your operation,which means he or she has effectivelyalready chosen your shop to have thisrepair performed. Sure, the consultanthas to provide an estimate and get an“Service consultants,in a nutshell, areresponsible forselling maintenanceand repairs.”approval, but how much “selling” is actuallyinvolved?A truly successful, selling service advisor/consultantis the one who “sells”needed maintenance when customersdon’t come in looking for it. Instances inwhich a customer arrives for an oilFor information, circle 17 on RS card.change and tire rotation and the advisorsuccessfully “advises” him or her of theneed for a 30,000-mile service, which isadded to the repair order before a technicianever sees it. That’s selling!Most service advisor/consultant payplans end up “rewarding” the sale of theticking noise repair very heavily. If we allagree that the example of the 30,000-mileservice is representative of an advisor’struly growing the business, then the balanceof this article will make a lot ofsense and help you enhance your payplans. If you don’t think so, keep readingbecause, frankly, your viewpoint isskewed and your performance overall issuffering because of it!Continued on p. 30May 2007Fixed Ops Magazine p. 29
Dealers, managers, etc., say to me that“gross profit” is their ultimate objective,so therefore, they want to rewardhigh gross profit. On the surface thisseems to make all of the sense in theworld, however, when you take a closerlook at it, it can be absolutely detrimentalto the overall objective.Let’s get right to the point. Shop owners,dealers and managers do wantgross profit. In fact, what they reallywant is very simply more of it!What that really means is not a highergross profit percentage, but an actualincrease in the volume of businessthereby increasing the sales and ofcourse, with more sales comes moregross profit!“The unfortunatereality ... is that dealersand managers get sofocused on thepercentage, theyneglect to look at theactual amounts.”The unfortunate reality, however, isthat dealers and managers get sofocused on the percentage, they neglectto look at the actual amounts.Realistically, what would anyone prefer:one more hour sold with an 80-percent gross profit or two more hourssold with a 70-percent gross profit?What about 10 more hours at 50 percent?For far too long, this industry has beenso hung up on the percentages, it haslost sight of the goal, that being simplymore—more of everything, morehours, more parts, more, more andmore.So with “more” in mind, ask yourselfdoes your super-duper, all-encompassingeffort actually generate more, ordoes it generate more of very specificservices and repairs that provide ahigher percentage.Work the pay planDo you have a factor in your pay plansfor gross profit percentages? Why?Service advisors don’t set the prices ofthe services and repairs you sell—themanager does!p. 30 May 2007 Fixed Ops Magazine
With gross profit factored into the serviceadvisor pay plan, you all but ensure thatservices that you have priced with lowerpercentages, for obvious competitive reasons,adversely affect the advisor. An oilchange with its low gross profit percentageswill hurt his or her pay. What will the advisorslearn to do?Do you have an hours-per-repair order factor?Why?Again, the intention is good, that being tosell more customer pay, but is that theactual result? Or, like the “survey” shifting,do the more aggressive, more senior advisorssimply bully the less aggressive, lessexperienced advisors into giving up theircustomer pay and taking on warranty andinternal work. Better still, what do youthink the pay plan will teach advisors todo?As managers, we also need to work our payplans, and we should know that our advisorswill be working theirs. Frankly, wewant them too. We just need make surethat we don’t create a pay plan that, once itis worked, has negative impacts on otherperformance. We also have to ensure thatall of the departmental pay plans are inline with each other. An example is that ofa warranty clerk who is penalized for a disallowedwarranty. He or she knows whatwill reject before it is sent and will “work”to have it “written off” before it is submitted.The disallowed claim percentage goesdown but, again, at what cost? Would webe better off “trying” to submit and failing?Does the pay plan support that principal?Look at all of the “factors” of your payplans, and how do you want your staff to“work them.” If they work it they way youexpect them to, does it get you closer tothe ultimate goal of more.Dealers and shop owners also have toensure that the manager’s pay plan is inline with the overall objective of more too.Obviously, the manager has additionalresponsibilities and, therefore, his or payplan will be somewhat different. If themanager is paid on gross profit percentages,won’t he structure his advisors andother personnel pay plans to help achievehis goals? If the manager has no controlover certain sales or expenses, such as rent,is it motivating for the manager when hispay is adversely affected by a rent increase?Rent increases are natural, expectedincreases, but not within the realm of controlof the manager. Don’t penalize himfor that increase, but rather reward him forcontrolling the expenses that he can control.Ask yourself: Does the pay plan rewardthe behavior and actions that you ultimatelywant or is it penalizing behavior andaction that you don’t want?There’s a big difference, and it’s motivation.People will be motivated to succeedFor information, circle 18 on RS card.when good behavior and actions arerewarded! People will look for loopholeswhen actions and performance are penalized.Pay plans will manage behaviors good andbad. Pay plans will not—nor can they everbe—a substitution for management. Peoplestill need to managed, coached and trainedto produce the goal-enhancing performanceand behavior that you want!Remember: If a pay plan could managepeople, we wouldn’t need any managers atall!Tyler Robbins is president of ATi—Auto Train International, a companythat performs fixed operations trainingand service management trainingthroughout North America. May 2007Fixed Ops Magazine p. 31
PartsNADA Rolls into Lucky SevenAccessory Sales ProgramBy David Copp Stringery now, everyone has put LasBVegas and NADA 2007behind him or her—or at leasthas tried.For me, not everything that happened inVegas stayed there. While I may have leftthe Superbowl outcome in Vegas, I cannotforget all the dealers and fixed opsmanagers who came to our booth with asingle concern. I can still see them infull-color mental reruns.Why? They all expressed the samethought—and it was a full 180 degreesfrom what I heard at NADA/Orlando2006. For the first time in all my years ofthinking accessories, I didn’t hear “Whyshould I care about accessories?” Justabout all I heard was, “Yes, we are tryingto get into the accessories business … butI’m afraid we’re not doing a very goodjob of it. We need to do better.” Whata change in just one short year!If I talked to you in Las Vegas or if youjust think your accessory sales could bebetter, you’re the reason I’m writing thisarticle.Here, then, is my “Lucky Seven Programfor Accessory Sales Super Stardom.”1.Know you can do better.No matter how much you’re making inaccessories sales, you can always makemore. It’s no accident many of the largedealer groups are shifting business modelsto increase sales of—and often expectthe lion’s share of profits to come from—fixed ops and accessory sales.2.Be a champion or find one.Like any successful program, accessoriessales must be championed throughoutyour dealership. You (or your appointedperson or even an entire department)must become the program’s lead cheerleaderand policy driver.Too often dealership processes come andgo. Your dealership accessories championmust ensure that your accessoriesprocess sticks. Champions don’t have tobe managers. You need someone withdiscipline, enthusiasm and likeability. Inmany ways, your champion is selling theprogram as well as accessories. Makesure your champion is someone you’dbuy from.3.Think product, product,product.If you’ve read any of my previous FixedOps pieces, you know experience has ledme to believe that OE accessories giveboth the best value to the customer andthe highest profit potential to the dealership.This might run counter to conventionalwisdom that aftermarket products areless expensive and, therefore, perhapswhat customers prefer. But OE accessorieshave been proved a valid and highlyprofitable channel (see Fixed OpsMagazine, November 2006). Whateverdirection your store takes, you must havewhat your customers want. Whether it’srear-seat entertainment, wheels, cargomanagement or exhaust systems, be sureyou have a stocking strategy and supplierto help drive your business with the rightproducts and availability.4.Maintain consistentpricing.Centralized, standardized-throughout-alldepartmentspricing is key to a successfulaccessories program. This necessitatescreating a matrix for consistent retailpricing with a delivery system so alldepartments—and personnel—are pricingfrom the same page. It must be reflectedon your dealership’s Web site, flowingbackward and forward through sales,service, parts and management.Nothing will sack your accessories effortfaster than sales’ quoting one price whileparts quotes another. Whether you preferan integrated e-catalog with custompricing features or printed pricing notebooks,make sure the tools your staffuses are up to date and accurate. Even ifit means daily manual updates. (Howyou price accessories can get dicey; formy thoughts, see Fixed Ops Magazine,October 2006.)5.Be armed with ammunition.Your sales force, service writers and partsstaff need tools that help them sell accessoriesto new and existing customers.Full color product sheets and brochures,e-catalogs, “hero” cards and/or pocketreferenceguides should be available toall, in ample supply for both staff andcustomers.Because prices change, promotional salescome and go, it’s best not to includeprinted prices in sales materials–but doleave space for write-in accessories, installationand tax costs, as well order status,install/delivery dates, etc.p. 32 May 2007 Fixed Ops Magazine
To make it more personal for the customerand easier to assign sales commissions,leave space to attach cards or writein names and phone numbers.Customers buy what they see. Andthey’d rather buy from someone theyknow.6.Dress your mannequins.A dealer once told me that putting vehiclesin the showroom without accessoriesis like walking into a department storefull of naked mannequins. Sales people,service writers and parts personnel don’tjust need ammunition, they need props—something real to help customers visualizewhat their fully accessorized vehiclewill look and “feel” like.Putting accessories on show vehicles sellsmore accessories and more vehicles.According to our dealer customers, thebiggest problem you should have will bekeeping your best-dressed mannequinvehicles on the lot.7.Display and merchandise.Featuring the accessories themselves inyour showroom and service waiting areasdoes two important things: It announcesloud and clear that you’re in the accessoriesbusiness and it reminds employeesyou’re floor-space serious.That it also suggests to customers that theaccessories they love on your mannequinvehicle will look just as good on whatthey’re driving—it’s icing on the cake.Especially since accessories displays inwaiting areas announce that you’re theone to go to for installation, too.Crazy 8 Bonus Roll:Show me the m-o-n-e-y.The Lucky Seven Program has definite,proven steps your dealership can take tocash in on the popularity and profitabilityof Accessory Sales. Yet in the final analysis,it’s the person that makes the sale.Whether that person works in sales, partsor service—or body shop, fleet sales,detailing, whatever—the one tried-andtrueway to motivate accessories sales issharing the wealth.First, accessories sales must be credited bythe originating department. Equallyimportant, each dealership employee whosells accessories must be rewarded, regardlessof title or department. Nothing motivatesor says success like money. Withlowered margins on fewer sales, sales peoplecan make more from accessories thanfrom the sale of the vehicle itself.When you get serious about increasingaccessory sales and go at it with:1. A solid plan.2. An integrated and accuratewhole-dealership system.3. Motivated personnel.… then your entire dealership can findaccessory sales trumping vehicles profits.It’s a new ballgame, and your accessorysales program should make you a winner.The industry—and your dealership—mustmove away from the mentality of “vehiclesales are my only chance for success.” Onreflection, that 180-degree NADA shiftfrom “Who cares about accessories?” to“How can I do better at it?” is no surprise.The time has come. Run with it.That said, what I’d like you to rememberis this: You’re not in the accessories gameuntil you try. Trying is the most importantstep you can take.If you’re not comfortable with creating—or subscribing to—an integrated wholedealershipaccessories sales system,choose one department to initiate youraccessories sales push. Pick one, whetherit’s sales, parts, service or a separate accessoriesdepartment. And start. If you’renot as successful as you’d like, keep readingFixed Ops Magazine for clues. Youcan tell me how you did at next year’sNADA.David Copp Stringer is president ofInsignia, an integrated, whole-dealershipprocess for increasing storeprofits through accessory sales. For information, circle 19 on RS card.May 2007Fixed Ops Magazine p. 33
Body ShopTraining:Cost, Loss orInvestment?By Tim MorganWhen body shop managementpersonnel areasked about technicaltraining, the most frequentresponses are:1. “I can’t afford to send them fortraining.”2. “The shop is too busy to lose anemployee for training.”3. “The technician can train herewhile he works.”4. “Extra training won’t help mybottom line. How am I supposedto get money back fromtraining?”5. “They were trained on theequipment when we purchasedit years ago”Sound familiar? Consider this:Training, if conducted properly, is along-term investment and somethingthat requires a commitment toupdate and retrain on a timely basis.Software, for instance, has evolvedover the years. I’m sure your knowledgeand training received on theoriginal DOS computer operatingsystem in your office is not helpingyou to operate your Windows systemtoday.ChangesHow about the original unibodydesigns? Technicians struggled tounderstand crash factors that causedan X-Body vehicle hit in the leftfront to show damage in the rightrear. It took a lot of training in theearly stages of the unibody to be ableto properly identify and repair structuraldamage. Everyone was used toheating a frame rail till the end wasready to drip off and then yanking itback over. Not too mention thatthere was nothing under the unibodyto wrap a chain around to holdthe vehicle down. Add pinch weldsand offset holding to assist pulls toreplace the disappearing t-hook tiedowns.p. 34 May 2007Fixed Ops Magazine
The movement from the single-pointtape measure (like my favorite brand,Stanley) or tram to mechanical measuringsystems and fixturing systems tookthe industry by surprise. These systemsrequired more training and skill to operatethem effectively. Some smaller shopsare still going through the conversion to“3D” measuring.Refinishing processes have and will continueto evolve making additional trainingand product investment changes everycouple of years. Most paint company certificationprograms last two years and thenrequire the technician to recertify.“Everyone was used toheating a frame rail tillthe end was ready todrip off and thenyanking it back over.As vehicles have become more complexto absorb collision energy, repair andreplace decisions are also more complexor confusing from both the estimatingand repair side. The addition of aluminumvehicles and hybrid aluminumand-steel-mixedvehicles are the new“problem child.” These vehicles needspecial training, tools and shop environmentto repair them. Without the propertraining, repair facilities are left wideopen for liability issues of improperrepair or even voiding the vehicle manufacturerwarranty.Need for training”Training is becoming more specializedand vehicle-specific. Sometimes findingrepair procedures is hard enough but,without proper instruction, the repair iseven more difficult and costly.Joining of replacement parts may requireMIG/MAG, STRSW resistance welding,weld/bonding, or even riveting. Somemanufacturers may even require differentwire size or content for what looks like asimple MIG weld. Or bonding with adhesives,what adhesive material is approvedby each manufacturer. Then does thebonding material need curing beforeresistance welding? And what is the properwelding setting for each material orprocess? Or can my existing resistancewelder perform the task?Types of steels are another training issue.More HSS/HSLA steel is added to everyvehicle designed now reaching upwardsof 50 percent of most vehicles. More andmore structural panels are requiringreplacement after the pulling operationsare performed because of fatigue andcracking. Proper handling is required forall types of HSS/HSLA.Most HSS/HSLA found today is calledboron steel. Many technicians have beenstruggling with boron for a while. It probablyhas cost thousands of dollars just indrill bits that are not designed for thetask of drilling through boronsteel. Grinding away the weldor a plasma cutter will givea better result. In addition,boron is so strongthat it will never bepulled back to its originalstate or shape.But pulling is requiredto bring adjoining panelsback to position. Todo this, the technicianmust slice the panel intosections before pulling toallow it to move andbend. Boron can befound on Volvo,BMW, Ford andChrysler vehicles, toname a few.“Training is becomingmore specialized andvehicle-specific.What about “quietsteel” or laminated steeldepending on the manufacturername for it? This can be foundin areas that normally used sound-”deadener materials in the past. Cowlareas, oil pans and wheel wheels have thisspecial steel that is two pieces of steelwith a polymer material sandwiched inthe middle. This polymer can be a realhazard if trying to repair it without properinstruction.More magnesiumThe addition of magnesium brings itsown repair processes and warnings.Magnesium is used on 2004 and newerF-150 pick-up trucks. Heat should neverbe applied and, if it catches on fire, specialchemicals may be necessary to put itout; water and oxygen don’t mix wellwith magnesium.Continued on p. 36May 2007 Fixed Ops Magazine p. 35
Now with computerization of measuringsystems, evolving for years, and themixing systems of thousands of computerizedvariants, it’s apparent thatcomputer training is now a requirementfor today’s technician now andmore in the future.“Today’s vehicles arebecoming so high tech,who would possiblywant to repairsomething they knewnothing about?”Additional mechanical functions onthe vehicles require monitoring or resettingafter the collision repair is completed.Simply disconnecting the batteryon a vehicle is not as easy as it mayseem anymore. Airbag sensors, modulesand seat-belt tension devices arejust a few of items that may require thetechnician to need training on what toisolate, disconnect, test and reset beforethe vehicle can be delivered to the customer.With side airbags and curtains,pressure sensors can be found in somevehicles. This pressure sensor in thedoor may not function correctlybecause the volume of air wouldchange with the simple addition of aspeaker should an aftermarket stereocompany change or add components inthe door cavity. Just another reasonthat training is not just necessary, it isa requirement.Today’s vehicles are becoming so hightech, who would possibly want to repairsomething they knew nothing about?You certainly wouldn’t send someoneout to drive your automobile unless heor she were trained and licensed first!Lots of trainingThere is plenty of training to goaround. Courses from I-CAR, structuralrepair equipment manufacturers,paint companies and adhesive manufacturersare good places to start. Thenadd in your vehicle-specific informationfrom the manufacturer or its trainingprovider. This training may be in yourshop, at a traditional training center,on the Internet or satellite-based as wemove into the future.I hope by now you don’t think trainingis a loss! Set yourself and your operationsome educational goals and charta new career path into the next dimension!Timothy W. Morgan is the global director of technicaltraining for Car-O-Liner. His experiencein the collision industry includestechnician, shop manager, businessowner, and director/educatorof a collision repair-training programfor a technical college. p. 36 May 2007 Fixed Ops Magazine
AdministrationFive Secrets of CRMBy Richard Ipsenn today’s automotive market,Icustomer relationship managementis not just a buzzword, it’sa way of life. More than ever,dealers understand the importanceof customer acquisition andretention to their bottom line, andCRM has evolved into one of the mostpopular and effective strategies to keepcustomers returning toyour dealership.Customer service used to consist solelyof a friendly handshake and a smile,without any systematic way of trackingcustomer satisfaction or disappointment.But in this age of technology,dealers have access to many more formsof communication—including e-mail,phone and direct mail—that allow themto contact their customer base in afaster and more cost-efficient manner.Dealers who are successful at acquiringand retaining customers take a holisticapproach to CRM, making sure thateach customer is contacted at everystage in the cycle of service. To besuccessful in ensuring that customersatisfaction becomes customerloyalty:1. Maximize your customerdatabase. Every dealer’s customerdatabase is a virtual goldmine just waiting to be tapped.Most dealers realize they need todo more, but don’t have theprocesses in place to be as proactiveas they would like with customerretention. Have a process inplace to send letters for recommendedservice, declined service,inactive/lost customers,firstand second service reminders, andvehicle recalls. Those fixed ops managerswho are most effective also sendfirst-time service welcome letters thatinclude a survey, and implement onlineappointment setting and history.2. Use the customer database to determineprofitability and the lifetimevalue of each customer. Knowing yourcustomers’ spending patterns anddemographic profile can allow you toforecast when they will return for serviceand also estimate which servicesthey will be interested in depending onprice point. For example, customerswith high-end cars typically realize thelifetime value of scheduled maintenance.Sending a targeted reminderwith a car detail coupon reaps bigreturns. However, the vast majority maynot be as proactive with their cars’maintenance and need to be reminded.Customers need to realize that regularmaintenance actually generates moremoney in the long run as they get a betterreturn on their investment whenthey trade in or resell the car.3. Keep track of customers’ existingservice history and systematically sendfocused retention letters and postcardswith good reasons for customers tokeep coming back. This is really thepoint where CRM evolves from a scienceto an art. An effective process willdownload customer information directlyfrom the DMS after each businessday, calculate the next service due foreach customer, and send letters on adaily basis to reduce peaks and valleysin the service drive.Continued on p.38May 2007 Fixed Ops Magazine p. 37
Reminder letters and postcards aremailed to each customer 14 days priorto the next service due date, which isbased on the dealership’s mileageand/or time recommendations. Agood CRM provider will track andtrend your return on investment byletter type, customer cycle and specificpurchase order.4. Respond immediately to customercomplaints. Make it easy and comfortablefor customers to express theircomplaints, concerns, dissatisfactionsand recommendations. Keeping trackof your customers’ opinions andresolving situations in which customersare dissatisfied is the foundationto the long-term relationshipbuilding that CRM is all about. If youaren’t giving customers a comfortableforum in which they can expressthemselves, you are not building anenvironment for customer loyalty.5. Survey customers on a consistentbasis in order to truly understand customerwants, needs and disappointmentsin an effort to boast higher CSIscores and customer retention rates.Dealers need to survey their customersafter each service to correctcomplaints. When dealers neglectthis vital component of CRM, dissatisfiedcustomers may stop coming infor service or, worse, spread ill willabout the dealership without giving ita chance to correct the problem. Agood CRM provider will track andtrend each survey response to pinpointareas in need of improvementand hot-alert the dealer of dissatisfiedcustomers.With these five easy points, dealerscan successfully track customer satisfaction,improve customers’ experienceand focus on what they do best:selling and servicing cars.Richard Ipsen is president and CEO ofDiversiForm Inc., a CRM service providerbased in Portland, Ore. p. 38 May 2007 Fixed Ops Magazine
New ProductsStroker Pro 15-inch Subwoofer from Cerwin VegaThe Stroker Pro 15 is a reincarnation of theStroker Woofer. The Pro Series sports a revolutionarydual-spider design and is consideredan advanced subwoofer in mobile audio. Theproduct boasts an adjustable voice coil biassystem, high excursion and SPL capability,and a peak power handling capacity of 5,000 watts.For information, circle 20 on RS card.AutoSharp Paint Pen from AutoVisuals Inc.The touch-up paint pen uses a fine felt marker tip that is interchangeable,not a ballpoint pen tip that can scratch a car’s finish.The company makes available nearly every manufacturer’spaint codes, beginning with the 1990 models. The pen can becustom silk-screened.For information, circle 21 on RS card.AirCenter Compressors from KaiserThis new line of packaged compressedair systems comes completewith a Sigma rotary screw compressor,refrigerated air dryer andoptional filter—all mounted on areceiver tank. Connecting thepower and air line produces a fullyoperational compressed air system.Compressor size ranges from 3 hpto 40 hp with maximum workingpressures available from 80 to 205psig. The compressors are completewith starter, after-cooler and sound attenuating enclosure.The CFC-free refrigerated dryer delivers a consistent pressure dewpoint as low as 38 degrees F for dry air. The package can be customizedwith filters that remove particles as small as 0.01 micron,oil aerosols and even oily smell or taste from the compressed air.Models with two mounted compressors are also available.For information, circle 22 on RS card.ELF Solaris Synthetic Motor Oil from TotalThe ELF Solaris line of synthetic motor oilsis now available in the United States andCanada. It is the first synthetic motor oilmade especially for low-sulfur diesel systems.This new line of 5W-30 high-performancesynthetic lubricant is specially formulated fornewer vehicles equipped with a diesel particulatefilter and other post-treatment filters,such as those used in Mercedes Benz, BMW,Volkswagen and Nissan vehicles.For information, circle 23 on RS card.Reel Cabinet from Shure Manufacturing Corp.The SRC is a self-contained, functional unit intended to organizeservice reel requirements. It is available in 24- or 36-inch cabinets.The 24-inch SRC can hold up to six service reels and the36-inch SRC can hold up to eight service reels. Both feature:• Stainless steel side roll bars.• Roller guides for hose extension and retraction.• A removable drip tray.• Leg levelers.• Integrated cut-out for electrical outlet duplex.• Easy access in rear of cabinet for service piping and wiring.• Side knock-outs to attach multiple units.• Quick release concealment panels.• Powder coat paint finish in 22 colors.For information, circle 24 on RS card.L434GS General Service Four-Post Rack Lifts from HunterEngineeringThe L434GS combines a 12,000-pound weight capacity and a maximumgeneral-service wheelbase of180 inches. There are no floorobstructions under the runways, sothe area is clear for the technician,tools and equipment. The runwaysare 22 1/2 inches in width andinclude rub rails, which preventtechnicians from driving off the lift. Half-inch diameter galvanizedwire cables offer maximum strength and corrosion protection.A powerful three-horsepower pump raises the rack quickly in 45seconds and a flow valve controls lowering speed to 45 seconds,even when empty or lightly loaded.For information, circle 25 on RS card.Online Smart Selector from Miller Electric Mfg. Co.The new onlineSmart Selector uses asimple, intuitivegraphic interface toease welding productselection, basing itsrecommendations onthe customers’requirements.It uses patent-pendingsoftware and aneasy-to-use interface to make customer recommendations forMIG, stick, TIG, engine-driven and plasma-cutting products. Forthose who are unsure which welding process best fits their needs,the product explains the benefits, skill level required and commonuses of each.For information, circle 26 on RS card.May 2007 Fixed Ops Magazine p. 39
New ProductsNew LG (Little Giant) Series from CoxreelsThe new series is specificallydesigned for tubing andair/water applications. It isequipped with a continuousradius-grommet-style tubingguide constructed of bearinggrade,unique FDA-compliantC-PEP composite. Thereare no corners to pinch thetubing or rollers for tubing tocatch on, and there is a slicksurface for easy glide.The reel also features lower pull tension to reduce the chance ofstretching tubing. The product mounts to any horizontal or verticalflat surface, and weighs only 9 to 13 pounds depending onthe model.For information, circle 27 on RS card.ADVERTISERS DIRECTORYAu-Tomotive Gold Page 23Auto Basics Page 41Automotive Facilities Pages 27and 41AYES / Automotive Youth Page 25Educational SystemsCar People MarketingBack CoverDME / DealerPower Pages 10and 11Elf Oils / Total Lubricants USA Page 33Garage Equipment Supply Page 41Hanel Storage Systems Page 29Hunter Engineering Page 5Insignia Page 15Jeff Cowan's ProTalk Page 19Kaeser Compressors Page 17MPI / Mobile Productivity, Inc. Page 13NitroFill Pages 31and 41Parker TireSafe Page 41Schaefer Systems Pages 3and 41Shure Manufacturing Corp. Page 21TSD Loaner Management Software Inside FrontCoverZAK Products Pages 7, 41and InsideBack CoverPremium Sound System from DelphiDigital signal processing for optimization and equalization providefull, deep sound. A built-in XM Antenna lets listeners enjoytheir favorite XM content from the comfort their homes, andthe built-in handle let’s them take it on the go. It works withthe company’s latest XM radio, as well as several other XMreceivers from Delphi, Audiovox, Pioneer and Samsung.For information, circle 28 on RS card.SPL Amplifiers from PioneerThe SPL amplifiers are designed and engineered to generatepower necessary for extreme sound pressure levels, includingmultiple subwoofers for intense bass. Features in the line-upinclude class-D circuitry, multi-amplifier synchronization systemtechnology, 1-Ohm stability and bass boost control.The amps are 1-Ohm capable, allowing multiple subwoofers tobe connected. An included bass boost remote allows the user toincrease bass output from the front seat, ideal for quickly adjustingthe amplifiers to multiple types of music—especially thosewith lots of low-frequency beats. Bass boost frequencies are variablebetween 40 Hz to 120 Hz, at levels from 0-12 dB.For information, circle 29 on RS card.Plasma Cutting Guide from MillerThe new guide helps end-users withequipment selection and covers theadvantages of plasma cutting vs. traditionalmetal-cutting methods. The8-page guide also includes basicinstructions on plasma cutting,information about equipment operationand plasma safety guidelines.It provides specifications for Miller’s complete line of plasma cutters.It also includes information about Miller’s exclusive Auto-Line and MVP (multi-voltage plugs) technology.For information, circle 30 on RS card.New Accessory Tool from 5square.comThe new tool helps auto dealers increase gross profit opportunitiesby driving front-end accessory sales. It is built right into theoverall the company’s Web-based system and greatly expandsupon the previous accessory sales functionality.With one click, managers and customers can choose from a listof available accessories for a specific vehicle with direct links toimages that enable the customer to visualize the accessory. Eachaccessory can be directly linked to a URL and the sales personcan quickly bring up a picture and product description with allpricing information, so the customer can see exactly what theyare purchasing and the value proposition.For information, circle 31 on RS card.p. 40 May 2007Fixed Ops Magazine
MarketplaceFor information, circle 32 on RS card.For information, circle 33 on RS card.• Premium Fluid Maintenance Programs• Industry Leading Equipment Placement Programs• Service Advisor Sales Training• Technician Training• Innovative POS Materials• Effective Customer Retention Programsemail: email@example.com:www.zakproducts.com1-800-514-6011For information, circle 34 on RS card.For information, circle 35 on RS card.For information, circle 36 on RS card.For information, circle 37 on RS card.Feature your company, product or serviceon this Marketplace page and reach theFixed Operations Directors at every newvehicle dealership in the United States withour monthly circulation to 24,000 readers.Contact Nick West at 877-349-3367or Nick@FixedOpsMag.comFor information, circle 38 on RS card.For information, circle 39 on RS card.May 2007 Fixed Ops Magazine p. 41
Spotlight OpsFriends Work Waysup in Fixed Ops CareersBy Sarah HumphreysAs many fixed ops personnelknow, starting at the bottomof the department can alwayslead to something bigger.That was the case for both DannyVarela, service director, and TomDuval, parts manager, at New PortLincoln Mercury in New Port Richey,Fla.Duval stocked shelves at a machineshop, then partnered to buy an autoparts store and then another, whichsold to New Port among others. Thedealership’s parts manager at the time,who had become a friend, beckonedDuval to join the dealership. That was20 years ago.“I started out at the back counter workingwith the technicians at the beginning,”Duval says of the entry-levelposition. “I did the back-counter work,filling the parts orders for the techniciansand for the body shop.”Varela got his start working with cars asa detailer but, with a degree in businessmanagement, he had higher aspirations.He moved to sales position, butwhen deals became thin during theGulf War, he saw greener pastures inthe service department.“One of the service writers was leaving,moving out of the state,” Varela says. “Ithought, ‘If they’re not going to buy newcars, they’re going to need service.’p. 42 May 2007Duval’s and Varela’s careers convergedat New Port Lincoln Mercury sevenyears ago. Both describe an excellentworking relationship.“We’re not allborn parts managersand service managers.We work dayto day.”“With a service manager like Danny, hemakes sure everything’s OK,” saysDuval. “When you get a good man towork with, it makes it a lot easier to doyour job.”“He’s an amazing kind of guy,” Varelasays in return. “Tommy’s by the book.He’s meticulous about what he does.”What both of them do is somethingthey enjoy. And they say they owe theirgood fortune to the opportunities presentedto them as they rose through theranks.“There’s always room for advancementat the dealership,” says Varela. “We’renot all born parts managers and servicemanagers. We work day to day.”Tom Duval and Danny Varela“Coming in on the bottom and workingon the counter like I did gave me abetter understanding of what the servicecustomers need and what thewholesale customers need,” he says. “Itgave me four years to get my feet wet.Starting in that position is very good.”Sarah Humphreys is editor of Fixed Ops magazine.If you know someone whobelongs on this page, contactEditor Sarah Humphreys firstname.lastname@example.org (714) 271-4224.Fixed Ops will buy you lunch!Fixed Ops Magazine
FLUID MAINTENANCECHEMICALS AREA COMMODITY.JUST LIKE MILK!(In some cases just like sour milk.)Training Service Advisors And Implementing Simple, Proven-Effective Sales And Customer Focused Processes Are Unique!www.zakproducts.com | 1-800-514-6011For information, circle 3 on RS card.
For information, circle 1 on RS card.