November 07 - Fixed Ops
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November 07 - Fixed Ops

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 4Table of Contentsp.6Letter from the Publisherp.32Service DepartmentService Menus—Dos and Don’tsp.34Parts DepartmentBoredom and the Art of Accessories Salesp.36Body ShopThere is a Better Way to Operate the Detail Departmentp.14p.18p.24p.26p.28p.30FeaturesThe Air in ThereRunning a clean air-compressor machine leads to higherefficiencies and lowered costs in the body shop.The Dish on ServiceA thorough approach to inspecting the vehicle and consultingwith the customer puts a new spin on automotive service.Cure for the Vendor SyndromeTraining kits on paint chip repair keep profits healthy andin-house.It’s Raining ProfitsEffective post-hailstorm management presents opportunityand challenge in fixed ops departments.Mile-High ProfitsOil changes on high-mileage vehicles can be a dependablesource of revenue.This Could be the Big One: Part 3A consultant wraps up his thoughts on life after General Motors’Simplified Maintenance.p.38AdministrationBuild Customer Loyalty for the Long Haulp.42SpotlightDealership Sells Parts Near and Farp.8Industry News andEvents Calendarp.40New Productsp.40Advertisers Directoryp.41Marketplacep. 4November 2007Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 5For information, circle 5 on RS card.

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 8Industry NewsMiller to give away Ultimate WeldshopMiller Electric Manufacturing Co. is giving away an UltimateWeldshop valued at more than $17,000. The Ultimate WeldshopGiveaway includes a welder/generator, welding and plasma cuttingpower sources, auto-darkening helmet, safety gear, welding accessoriesand personalized expert training. The Ultimate Weldshop Giveawayruns through Dec. 31, 2007, and offers participants the opportunity towin more than 1,300 instant-win prizes, including welding and plasmacutting equipment along with related accessories and gear. Officialrules and registration are at holds users conferenceBluebird Auto Rental Systems held a users conference Sept. 26 and 27at the Hilton Hotel in Parsippany, N.J. Representatives from franchisees,independents and corporate franchisors attended the two-dayconference to hear a variety of topics, including Bluebird projects, newservices from partner companies and RentWorks Version 4.____________________________________________________Bosal Exhaust launches updated Web siteBosal, a manufacturer of OE replacement and high-performanceexhaust systems, catalytic converters and related components, haslaunched a newly updated website at Inspired byfeedback and suggestions from users, the improvements to the Website are intended to make the site more user-friendly and to help generatesales for Bosal customers.The site features a new online electronic catalog that is continuouslyupdated, and includes complete diagrams for all systems and their components.A catalog search will even provide information as to whetheror not a part is available at a certain distributor. The new installer quotationsystem lets shops print quotations for customers without havingto contact suppliers for pricing. The quotations system includes laborand allows installers to plug in their appropriate discount.For information, circle 7 on RS card.p. 8 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 10For information, circle 8 on RS card.

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 11New assignments for Yokohama Tire executivesYokohama Tire Corp. announced the reassignment of several executives and one promotion.Takao Oishi assumed the new title of executive vice president of operations. Oishi’s responsibilitiesare in the areas of MIS, logistics, strategic marketing and operations. This is Oishi’s firstassignment in the United States; he spent the last two years as president of Yokohama Europeand lived in Düsseldorf, Germany.Kenichi Shirai was named chief advisor, strategic marketing. Shirai will oversee product planningand strategic marketing. Shirai, also on his first assignment in the United States, has a mixof marketing and engineering backgrounds and was instrumental in the development of the twotires. He also worked with the environmental Eco-Motion group that helped produce an all-newconsumer passenger tire that combines citrus oil with natural rubber to form a new compoundcalled “Super Nano Power Rubber,” which reduces the petrochemical portion of overall tireweight to only 20 percent.Iwao Shimomura was named senior director, corporate quality assurance. Iwao Shimomura,whose nickname is Rocky, is one of Yokohama’s foremost experts in tire development and qualitytesting. This will be Shimomura’s second stint in the United States—he worked in the company’sSalem, Va., plant from 1991 to ’94 as manager of tire development. In his new position,Shimomura will oversee tire development, technology and quality assurance.Also, Satoshi Miyata was promoted to CFO and treasurer. Prior to this, he held the position oftreasurer and has been at Yokohama, Fullerton for more than four years.______________________________________________________________________ALI recommends inspections of vehicle liftsThe Automotive Lift Institute recommends that all vehicle lifts be inspected by a qualified inspectorat least annually “in order to ensure reliability and allow the continued safe operation of thelift.” Additionally, an increasing number of local building codes and other regulations in theUnited States and Canada require annual lift inspections.The inspection should follow the specific instructions provided by the lift manufacturer.Manufacturer Rotary Lift supplies its extensive network of authorized installed with inspectionchecklists for all its products, backed by comprehensive factory training on installing, maintainingand inspecting each lift.The ANSI/ALI ALOIM-2000 national standard covering safety requirements for lift operation,inspection and maintenance also outlines a number of minimum inspection points that shouldbe examined on any lift.These include:• Examining all accessible structural components, including welds, for any evidence of overloading,misuse or abuse.• Examining electrical components and wiring.• Checking the lift controls to ensure accessibility, an unobstructed view of the lift and anautomatic return to the neutral or off position when released.• Locating appropriate lift documentation, safety instructions, vehicle lifting information,lift safety labeling and capacity labeling.• Confirming adequate clearances around the lift.• Checking all fastening devices for tightness and proper fit.• Checking the lowering speed over the full down travel of the lift.• Operating the lift through its full cycle and checking the operation of the positive stop.• Checking to see if the lift locks engage in the fully extended position.• Checking all lubrication points for cleanliness, integrity of fitting and presence of lubricant.• Checking all chains and cables for excessive slack.• Checking all potential pinch points.At the conclusion of the inspection, the facility owner should receive an inspection certificate,which should be posted on or near the lift or kept with other lift records.For information, circle 8 on RS card.November 2007Fixed Ops Magazine p. 11

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 12Industry NewsMPi and AutoSoft Inc. announce strategicpartnershipMPi has formalized a partnership withAutoSoft Inc. to integrate MPi’s electronicdealership generating solution EDGE (formerlyknown as ARGIS) with ASI’sIntegrated Dealership Management System.ASI is recognized as the third largest DMSprovider in North America.The ASI DMS is a Windows- and PC-basedDMS solution that services more than1,800 dealerships nationwide. ASI’s systemprovides full dealer communication systemintegration with all domestic and mostimport manufacturers’ systems.MPi’s EDGE provides service departmentsthe ability to perform World ClassInspections that effectively increase customerpay sales using a customized inspectionreport, Know Your Vehicle. The integrationbetween ASI and EDGE will createa high level of efficiency for participatingdealerships by eliminating the need to reenterdata into EDGE. Dealers operatingon the ASI platform can now pull informationfrom the DMS directly into EDGE andpopulate the system with all appropriatecustomer information.________________________________American Suzuki selects RetentionPerformance Marketing as an endorsedvendorRetention Performance Marketing, a divisionof CallCommand and a leadingprovider of customer retention tools tothe automotive industry, announced thatit has been selected by American SuzukiMotor Corp. as an endorsed dervice andparts marketing vendor. According toindustry research statistics, only 14 percentof car buyers return to become repeatbuyers.Infomedia, the makers of the Microcatelectronic parts catalog, providesindustry leading fixed operationsproducts for the above manufacturers.RPM’s Customer RelationshipManagement system integrates advancedcustomer segmentation with personalizeddirect marketing campaigns that enableautomotive dealers to build customer loyaltyand increase revenue. In this way SuzukiAutomotive dealers can deploy highly targetedservice reminders and other marketingcommunications across multiple channelsincluding e-mail, telephone, personalizedWeb sites and print media.________________________________For information, circle 9 on RS card.ifmsystems.com1-888-807-6008MK0513ECDMark VII launches Financial ServicesMark VII Equipment Inc., the U.S. subsidiaryof WashTec AG of Germany, a supplierof innovative solutions for the carwashbusiness worldwide, introduced Mark VIIFinancial Services.Mark VII Financial Services was created tooffer turnkey financing solutions to MarkVII’s customers. A wide variety of leasingprograms are available for new sites orreloads.p. 12 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 13In addition, and unlike most financing programsoffered by equipment manufacturers,Mark VII Financial Services offers traditionalfinancing for real estate acquisition, construction,equipment purchases and business refinancing.Brian Dunlap will manage Mark VII FinancialServices and report to Johnna Boyd, director ofstrategic projects. Dunlap holds a BS/BA degreewith emphasis in business management fromColorado State University.__________________________________Rotary Lift offers free white paper on choosingthe right vehicle liftVehicle lift manufacturer Rotary LiftConsolidated has published a free whitepaper to help dealers choose the right vehiclelifts for their facilities. “Automotive VehicleLifts: A Resource Guide” is available fordownload at white paper covers many of the factorsdealers and independent repair shop ownersshould evaluate when buying new vehiclelifts. It includes sections on the impact of liftchoice on the bottom line, the advantagesand disadvantages of various types of vehiclelifts, facility planning, lift purchasing considerations,the importance of ALI certification,advice on how to evaluate a lift manufacturerand supplier/installer, and guidelines on howto keep vehicle lifts functioning properly. Abrief history of vehicle lifts and a glossary oflift terms are also included.__________________________________E3 Spark Plugs announces donation to TheNature ConservancyCarbon emissions are contributing to globalwarming, seriously effecting what could be irreversibleclimate change. E3 Spark Plugs isattempting to reduce carbon emissions frominternal combustion engines by developing alow-emissions spark plug. E3’s “green” sparkplug for automotive, small-engine and powersportsapplications is proven to reduce harmfulcarbon emissions as much as 58 percent in smallengines while improving fuel economy as muchas 13 percent.In recognition of Climate Change Day on Nov.3, E3 will make a donation of 1 percent of companyrevenue from all plugs sold from Nov. 1 –Dec. 31 to The Nature Conservancy.E3 spark plugs reduce hydrocarbon, carbonmonoxide and carbon dioxide emissions, aclaim that cannot be made by any other sparkplug on the market. E3’s proprietary electrodedesign ensures a more complete combustion ofthe air/fuel mixture. Test results have demonstrateda reduction of emissions in all engineclasses and as much as a 58-percent reduction ofFor information, circle 10 on RS card.emissions in small engines with continued use.Fuel economy is increased on average 3 – 13 percent,depending on engine class.November 2007 Fixed Ops Magazine p. 13

November 07 FOM:Nov 07 FOM 11/9/07 7:19 AM Page 14FeatureThe Air in ThereRunning a clean air-compressor machine leads to higherefficiencies and lowered costs in the body shop.By Michael Camberompressed air systems are criticalCfor two main reasons. First, compressedair is a utility—the energysource for most shop equipment.Second, compressed air mixeswith the product in paint spraying operations.Both air quality and supply directlyimpact the paint finish. “Re-dos” and“comebacks” increase labor and materialcosts, and interrupt workflow.Costly rework due to poor-quality paint jobsand workflow interruptions due to inadequateair supply can increase cycle times, causingreal losses in hard dollars. No one wantsto spend more on compressed air equipment,but just calculate the cost of refinishing one“fish eye,” and it’s clear that investing sometime and energy into designing the right compressedair system is far less than the cost ofgetting it wrong the first time.Once you have the right machine, these tipsshould help you run it properly.Set the correct pressureMany shops operate their compressors at145 psig or 175 psig. In fact, very few toolsrequire pressures above 100 psig. Refer tothe tool manufacturer’s manual to determineyour shop pressure and flow requirements.Select the correctcompressor typeWhile the piston (or “recip”) compressor isstill found in many automotive service andbody shops, more and more facilities are seeingthe benefits of rotary screw compressors.Rotary screw compressors have closed-circuit,thermostatically controlled cooling systemsthat provide a 100-percent allowableduty cycle with operating temperatures ofonly 170-200 degrees F. This is an importantconsideration for paint spray booths andother moisture sensitive applications, sincemoisture vapor content drops with decreasesin temperature. An important rule ofthumb is that every 20-degree decrease intemperature cuts moisture vapor content inhalf, making it easier to remove moisturefrom your system.Plus, rotary screw compressors operate atmuch lower noise levels, giving the shopowner more flexibility on compressor location.A piston compressor may provide adequateflow for a short period, but its allowableduty cycle must be considered. The dutycycle is the percentage of time a compressormay operate without the risk of overheatingand causing excessive wear to the compressor.Most shops’ piston compressors are aircooled and have an allowable duty cycle of60 to 70 percent. They are often oversizedand operate over a wide pressure band toallow the compressor to frequently shutdown and cool off because of the relativelyhigh operating temperatures (often 300 to400 degrees F).Consider maintenance andlong-term performanceMaintenance requirements and long-termcompressor performance are essential factorsto consider.Rotary screw compressors are designed sothat the rotors do not touch each other orthe rotor housing. Because there are noparts to wear, the performance does notchange over time.p. 14 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 17Discharging valuable compressed air toambient is costly, creates artificial demandand can impact the performance of toolsand equipment. Many shops compensateby increasing the compressor’s pressuresetting. Unfortunately, this just increasesthe amount of air lost to leaks, wastingboth air and electricity.An important rule of thumb is that every2-psi increase in pressure increases energyconsumption 1 percent. In addition, thehigher the system pressure the greater thevolume lost through leaks. A 1/16-inchleak loses 7 to 8 cfm at 120psig. At 150psig, it loses 9 to10 cfm. A 1/8-inch leakloses 30 cfm at 120 psig and nearly 38 cfmat 150 psig! And 38 cfm is more thanmany 10 hp compressors can produce.Identify leaks and fix them—sooner ratherthan later—to maximize efficiency.Storage and controlReceiver tanks provide a first stage ofmoisture separation, and store air for lateruse. Tanks stabilize system pressure andprovide an “air buffer” to compensate forfluctuations in air demand. Regulatorsplaced at the point of use will further “regulate”the air pressure for the specific tool.For example, spray guns using regulatorshave a steady stream of air resulting in amore consistent spray pattern.Guidelines for tanks• Pressure rating must exceed highestpossible system pressure.• Must have safety relief valve, pressuregauge and drain to remove liquids.• Must meet ASME or other requiredcode (check with local authorities).Price and true costA thorough system analysis goes a long wayin building a reliable, cost-effective system.Carefully consider each system componentand its impact on the application.Remember, value is more than initial price.Purchasing quality equipment now willsave time and money for years to come.For information, circle 12 on RS card.Michael Camber is marketing servicesmanager for Kaeser CompressorsInc., and for more than 10 years haseducated both the company’s distributionnetwork and customers on reliable and energyefficient compressed air system design. November 2007Fixed Ops Magazine p. 17

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 18FeatureThe Dishon ServiceA thorough approach to inspecting the vehicle and consultingwith the customer puts a new spin on automotive service.By Les Silverwas born and spent my child-in Winnipeg, Canada. IhoodWinnipeg is known for 40-degree-below-0 temperatures inthe winter, 90-degree-above-0temperatures in the summer, and mosquitoesthe size of hummingbirds.During the cold winters, my familyand I would gather in front of the TV(black and white and one channel, sothere was no need for a remote control)on Sunday nights and watch theEd Sullivan Show. (Yes, I am an “oldman.”) One of my favorite acts on thisshow was a guy who would set up arow of poles on the stage. He wouldput a plate on a pole and spin it tokeep it on top of the pole. He wouldthen move to the next pole where hewould repeat the process.By the time he got to the end of line,he would have about 20 plates spinningon the poles. At about that time,the first plate would be starting to wobble,so he would run back to the frontof the line and give that plate anotherspin. He would continue this process(accompanied by dramatic music, ofcourse) until his time was up.I mention this because when I startedworking with dealership servicedepartments about 30 years ago, I wasinstantly reminded of this act. Itseemed to represent the average day inthe life of a service manager—keepingthe “plates” spinning without lettingany fall off the pole and crash to thefloor.What are the “plates” that a servicemanager must spin and what are theimportant factors in keeping themgoing?p. 18 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 19There are six Big Plates and a wholebunch of smaller ones. The first three ofthe Big Plates are “customer facing” andthe last three are more “support” innature. They are:1. Quality2. Merchandising3. Service Capacity4. Personnel Management5. Expense Management6. Information TechnologyThis two-part article is dedicated to theservice professionals who work to balancethe spinning of these plates every day tokeep their shops on the move. The focuswill be to outline all the factors that haveto be juggled to keep the first three BigPlates spinning and to acknowledge thecomplexity of the job facing our servicemanagement teams today. This first partof the article will concentrate on theQuality and Merchandising Plates.The Quality PlateSpinning the Quality plate means deliveringtwo very different things.The first is technical quality. That is completingthe repair or service operationwith the technical proficiency to resolvethe customer’s request right the first time.Some of the issues that contribute to excellencein technical quality are:• Technician training and certification.• Tools.• Technician assignment.• Accurate communication ofthe customer’s concern.• Adequate time to complete the repair.• Work mix.• Compensation.• Diagnostic and repair information.The second, and in some ways the moreimportant aspect of quality, is the customerexperience. As a general rule, apositive customer experience will create apleasant environment where a customerwill want to return. This may even overcomepoor technical quality. The reverseis seldom true. Unless the problem is sosevere and the perceived skill of the shopis so great that the customer feelstrapped, most customers would not beprepared to willingly endure a poor customerexperience.Continued on p. 20For information, circle 13 on RS card.November 2007Fixed Ops Magazine p. 19

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 20A customer’s positive experience is createdby:• No waiting time when calling tomake appointment.• Immediate and friendly acknowledgementon arrival.• No waiting time to be written up.• Service advisors’ taking the time tothoroughly understand and documentthe customers’ requests.• Professional vehicle “walk and pop.”• Professional presentation of scheduledmaintenance needs.• Professional presentation of vehicleinspection needs.• Caring attitude of the staff.• Available alternative transportation.• Comfortable and well equipped customerlounge.• Keeping the customerinformed onthe status of thevehicle.• Prompt answeringof the telephoneon customer “callins.”• Explanation andestimate of additionalneededrepairs.• Meeting the customer’spromisetime.• Explanation ofwork performedand charges.• No waiting at cashier to pay for services.• Professional redelivery of the vehicle.Each one of these customer touchpoints is a moment of truth.Combined, they can create a caring andprofessional service experience. Miss afew, and the customer will never willinglyreturn.The Merchandising PlateIn the “good old days,” there was noneed to merchandise a service department.The dealership sold a lot of vehiclesof poor quality, the vehicles broke,and the customers came back to thedealership to have them fixed—primarilyunder warranty. Often, the servicedepartment was backed up for severalweeks and many dealers even refused toservice vehicles that they did not sell.Ah, the good old days!Unfortunately, these days are gone forever.The combination of improvedvehicle quality and aggressive competitionfrom the aftermarket has createdan environment where developing andimplementing strong service merchandisingtechniques is essential to operatinga successful service department.A service merchandising strategy needsto incorporate three components:1. Creating customer visits.2. Selling the appropriate labor and parts ateach visit.3. Pricing the labor and parts to be competitivewhile maximizing gross profit.There are a number of plates associatedwith each of these.1. Creating customer visits by:• Selling extended warranties.• Selling pre-paid “maintenance” packages.• Introducing all new- and used- vehiclepurchasers to the service departmentand making the first serviceappointment.• Making the next service appointmentafter each service visit.• Following up on declined” servicesfrom previous visits.• Communicating with loyal customerswhen they are due for preventivemaintenance and/or a vehicleinspection and escalate this communicationif the customer doesnot respond.• Communicating with defectors andproviding an offer to induce a “retrial.”• Capturing and marketing to “visitingowners” who have moved intothe market.• Marketing to previously unseen “onmake” vehicles that are within thedealership market area.• Marketing to previously unseen offmakevehicles that are within thedealership market area.• Marketing to commercial and fleetaccounts within the dealership marketarea.• Market and perform special eventslike car care clinics to attract newbusiness.2. Selling the appropriate labor and partsat each visit by:• Recommending scheduled maintenanceto customers when they callfor an appointment.• Performing a vehicle walk-aroundand popping the hood to recommendneeded items.• Recommending scheduled maintenancethat is needed but not includedin the appointment.• Advising the customer that a vehicleinspection will be performed.• Performing a quality vehicle inspection.• Presenting and recommendingneeded services from vehicle inspection.• Giving detailed specific price estimatesthat show the costs for eachitem recommended, making it easyfor the service advisor and the customerto prioritize and choose theservices they wish to perform.p. 20 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 21It is very important that service advisorstruly take an advisory attitude in thisarea. I believe that work that is neededmust be brought to the customer’s attention—thisis a professional responsibilityof the shop and the service advisor.However, you can do the customer agreat service by advising him or her onwhat is most critical and possibly “splitting”the needed work over a few visits.While this could impact negatively onsales per RO, it is the right thing to dofor the customer and will significantlyenhance customer loyalty.3. Pricing the labor and parts to be competitivewhile maximizing gross profit by:• Maximizing the effective labor ratethrough variable labor rates andmatrix labor pricing, resulting in competitivepricing on “quick service”items and increased effective laborrate and gross on more complex diagnosticrepairs.• Maximizing labor gross profit throughvariable technician pay rates.• Maximize parts pricing and gross profitthrough matrix parts pricing.• Perform routine pricing analysis (mysteryshop) to ensure you stay competitiveEach of these areas offers significant opportunitiesto increase sales. Generally, increasingthe number of customers is the mostdifficult and expensive and takes thelongest time to “see results” of the three.Selling the appropriate amount of laborand parts to each customer is much quickeras it focuses on customers that are alreadyin the dealership. The most immediateimpact comes from pricing adjustments.However, there is a limit to how often andhow high you can go in this area.Part two of this article will address theService Capacity Plate. Many service advisorsare reluctant to “oversell” the capacityof the shop due to the fear of having todeal with customers whose vehicles donot get completed in the anticipated timeframe. If the shop desires to increasesales, it will need to have some sparecapacity available for the service advisorsto sell in comfort.Les Silver is president and CEO ofMobile Productivity Inc. (MPi), aprovider of processes, metrics andsoftware solutions designed toimprove results in their service andrepair departments. For information, circle 14 on RS card.For information, circle 15 on RS card.November 2007Fixed Ops Magazine p. 21

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 22The ZAK Products Value PropositionWe believe it's not what's "in the bottle", but rather thepositive results our program delivers. Sure, our maintenancechemicals are leading the industry, however proper trainingis the key to higher profits, everyone should know that...

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 23Always Improving Performance TM1-800-514-6011www.zakproducts.comFor information, circle 16 on RS card.

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 24FeatureCure for the VendorSyndromeTraining kits on paint chip repair keep profits healthy and in-house.By Larry Johnsonired of paint chip repair vendorsnot showing up andTleaving you in an awkward situation?Tired of paying theirhigh fees week after week?Do you sometimes get that gut feelingthat you’re loosing control of criticalaspects of your own job? Are youthinking, “I’ve got this body shop ordetail shop with good staffing.Couldn’t I do this service better internally?More efficiently? Less costly?”Welcome to what is commonly calledthe Vendor Syndrome. As you know,there may be no alternatives for somevendor services being performed atyour dealership. However, when paintchip repair technology comes alongthat will free you from this dilemma,you need to seriously evaluate and thenimplement the technology in house. Itwill immediately provide you great freedomfrom the Vendor Syndrome thatall dealerships experience.p. 24 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 25Value of vendorsAgain, some vendors provide a valuableservice because the service they provideis too difficult or specialized to train foror to execute internally. The big fear,of course, is that if you do train yourstaff, they’ll quit and go out on theirown. We’ve all seen this happen. Thedealership becomes a training groundonly to lose the employee shortly thereafter.All at the dealership’s expense.But some technologies, such as paintchip repair, have evolved to where anyassigned staff could, in fact, learn therepair in under two hours, with fullsupport and supplies by the technologyproviders. So if the employee were toquit, another employee could step intothe gap and take over with little to nodowntime. Now that’s freedom.The benefits to this freedom will keepon coming. For example, take a look atthe paint chip repair vendors and theirvaluable services. Their service alwaysmakes the vehicles look much betterand ultimately helps sell more vehicles.It’s a proven repair service with merit.They perform a needed reconditioningservice, if they show up!Chip at expensesPaint chip repair is a type of service thatis no longer a difficult repair process tolearn or to perform or to teach employees.The benefits are significant andcan be taught in under two hours usinga training CD along with support. In amatter of a few hours, you can eliminatethose paint chip repair vendorsand gain the freedom you need to controlyour own destiny in this area.Consider the possibilities:• Eliminates paint chip repair outsourcing.• Reduces expenses by 75 percent to90 percent.• Gives the fixed operations team avaluable service to sell on the servicelane.• Increases cash flow.• Eliminates waiting for outside vendorsto show up.• Is easy to learn.- Utilizes existing staff.- Requires no extensive training.- Requires no prior experience.• Incurs minimal labor cost.• Requires no special staffing.• Incurs minimal material cost, averaging$2 to $4 per vehicle.• Incurs minimal overall cost, averaging$8 to $10 per total cost per completerepair.• Requires no travel time.• Requires no mixing or measuring.• Requires no complicated paintcodes.• Requires no spraying or airbrushing.• Requires no EPA approval.With these attributes and technical supportreadily available, you’re probablythinking the only dilemma is staffing.But remember, these systems weredesigned around this very dilemma.Anyone can learn and do the repair successfully.The only requirement is thatthe staff person not be color blind.Other technologies that can be broughtin house inexpensively are available, aswell. The real issue is whether you areready to take back control of yourexpenses and start utilizing yourstaffing more efficiently. If so, seekingfreedom from paint chip repair vendorsis exactly what you need. Innovativesolutions will cut your cost, increaserevenue and keep your department ontrack. Don’t you think it’s time you gotstarted finding solutions to the VendorSyndrome?Larry Johnson is the manager ofIMAC, a provider of paint chiprepair technologies and other packagesspecifically designed for autodealerships. For information, circle 17 on RS card.November 2007Fixed Ops Magazine p. 25

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 26FeatureIt’s RainingProfitsEffective post-hailstorm managementpresents opportunity and challenge infixed ops departments.By Mike Morrisonf you think national newscasts areImentioning more major hailstormsin a greater variety of locationsthan in the past, it’s notyour imagination. While theincrease has been a gradual one, yearafter-yeardata are showing reports ofmore storms dumping large-sized hailmore often, and in more states than inprevious years.From March 31, 2006, to the same datein 2007 (the most recent date reportedby the National Climactic DataCenter), there were 640 hailstorms withat least 2-inch hailstones falling in 35states. The previous three years averaged601 such storms in an average of32 states.During the same four-year period of the1990s (1993 to 1997), reported 2-inchhailstorms averaged 418 per year, spreadover an average of 31 states.Surprise attackAreas that we often think of as unlikelyto have large hail have been hit repeatedlyin recent years. The extent towhich this trend will continue or growis unknown. At least for the time being,however, it appears that in a given yeara lot of vehicles in a lot of places willhave a lot of hail dents.The financial aftermath of a hail stormcan be astounding, even looking only atautomotive damage. An Ohio InsuranceInstitute report from 2006, for example,estimated that a storm that tore throughthe state in October of that year, producinglarge hail and heavy winds,would result in 17,922 automotiveclaims at a total of $50.7 million. Mostof the vehicle damage was reported tobe dents in car roofs and hoods.When a hailstorm hits, will your shopbe ready to take advantage of theopportunity?Paintless and painlessPaintless dent removal is the most efficientand effective way to remove mosttypes of hail dents from a vehicle. It’squick: Depending on the severity of thedamage, one well-trained PDR techniciancan complete work on a heavilyhail damaged vehicle in a fraction ofthe time required using conventionalrepair methods. And it incurs no productcosts. It is convenient for the dealershipbody shop and cost-effective forthe customer, making the customer andhis or her insurance company happy.PDR restores metal back to its originalcondition without filling or painting,and is widely used to repair dents anddings without damage to the paint finish.The procedure must be performedby a skilled technician who uses handheldtools to push the metal back to itsproper shape from behind the damagedarea. Damage size, sharpness and accessto the affected areas are the biggestobstacles to doing a quality PDR repair.PDR is a craft that requires extensivetraining to develop a high skill level,and ongoing training as technologicaladvances—such as specific vehicle toolingand schematics—are introduced.The right vendorTo capitalize on the opportunity presentedby widespread hail damage inyour area, it is important to balancequality work with cost-effectiveness andconvenience for the customer.Many PDR vendors cut corners byfreely drilling to gain access to theinsides of vehicle panels. A skilled techniciancan and should access dentswithout drilling, so as not to compromisethe structural integrity of the vehicle.Accessing the dented metal frombehind without drilling may add timeto the repair, but it is certainly worth itwhen the quality and professionalismof your dealership are at stake.When a big hailstorm hits, PDR vendorswho rely heavily on drilling toaccess panels may soon begin knockingon the doors of local dealerships andbody shops. The high “facility fees” theyoffer can be tempting.p. 26 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 27And the fixed ops manager has to makea fast decision when customers are liningup with their insurance checksalready deposited in the bank. Lookingat the big picture, however, it is criticalto consider the long-term impact thatthe quality of work provided by a PDRvendor can have on your operation.Failing to partner with a skilled PRDvendor can cost a business in missed revenueopportunities and in compromisedreputation.Customer acquisition, customer retentionand high CSI scores are key goals ofmost dealership repair services today.Automotive repair customers want everything:high-quality work, convenience,cost-effectiveness and assurance thatevery service you provide will produce avehicle that runs well and will retain astrong trade-in value.In the short-term, any customer mightsay, “Sure,” when you offer PDR servicethat is a little cheaper than the otherdealership in town, where the fixed opsmanager chose a PDR vendor who usuallyforgoes drilling—but whose servicescost a bit more. If the drilling on thecustomer’s car at your shop results inproblems with the vehicle down the line,though, the customer may then view hislow-cost PDR job—and your shop—lessfavorably.Don’t risk the strong customer relationships,good will and trust that you’veworked so hard to build by failing to askthe right questions when you choose aPDR provider.Other issues to consider when choosinga PDR vendor include:• Resources. Does the vendor have alarge contingent of well-qualified technicianswho can be on site within aday or two and ready to work on themany vehicles that your shop has theopportunity to fix?• Commitment to finish the job. Willthe vendor stay with you until all hailrepair opportunities are addressed, orwill he pack up soon after volumedrops off to move on to the next hailaffectedtown?• Warranties and integrity of repairs.Will the vendor stand behind theirrepairs with written warranties?Warranties are critical to maintainingyour operation’s good CSI scores.• Referral business potential. If thePDR vendor can bring a significantamount of business into your shop,that business will be gravy in terms ofyour overall profit from the hailstormPDR operation. Several factors cancontribute to a vendor’s potential inthis area, including local relationshipsFor information, circle 18 on RS card.with insurers and other relevant businesses,as well as toll-free numberreferrals if the vendor is a national orregional company. Documentationof third-party relationships is a keyfactor to look for when evaluating avendor, as is referral lead generationdata.Keeping these guidelines in mind, PDRservice for paint damage can work foryour dealership.Mike Morrison is vice president of hail at DentWizard, a developer of PaintlessDent Removal technology and supplierof PDR services to the automotiveindustry through its on-siteservices at auto auctions, rentalcompanies and dealerships. November 2007Fixed Ops Magazine p. 27

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 28FeatureMile-High ProfitsOil changes on high-mileage vehicles can be a dependable source of revenue.By Shane Terryervice departments through-the nation are feeling Soutthe weight of flat car counts,increased cost of goods anda weakening economy. Theyare searching for ways to sustain profitabilityduring these challengingtimes. Should you cut or allocateadditional funds towards advertising?Continue to squeeze labor costs? Howabout selling tires? A solution you mayhave not considered is a high-mileageoil change service.According to the R.L. Polk & Co.,vehicle population report released onFeb. 15, 2007, the median age of passengercars in the United Statesreached a record high of 9.2 years in2006. It also said that vehicles 11 yearsof age and older represent 35.8 percentof the light-vehicle population,also an all-time high. The passengercar scrap rate was 4.9 percent in2006, down from 6.4percent in 2000.These numbersshow that,more thanever, the generaldrivingpublic is holdingon to theirvehicles longer.New standardsIf you use the national standard formiles driven per year, 12,000, themedian U.S. vehicle has 110,400 mileson the odometer. How many of yourservice customers drive vehicles with75,000 miles or more? Half or maybemore? The high-mileage motor oil categorywas introduced in 2001 to capitalizeon this developing trend. Sinceits inception, the high-mileage categoryhas taken off. In six short years,high-mileage motor oil represents nearly8 percent of the total passenger carmotor oil market. To put this growthinto perspective, the synthetic motoroil category only has 4 percent marketshare after 20 years of availability andmillions spent on advertising.High-mileage motor oil was introducedto meet the demands of a maturingengine. As an engine wears, it breaksdown the oil more quickly, rendering itless capable of lubricating critical engineparts. An aging engine is prone toincreased wear, oil consumption, oilleakage and low-cylinder compression.These problems can lead to spark plugfailure, excessive deposits and loss ofpower. Seals become brittle, rings wearand valves may not seal as tightly.Diminished ring sealing allows morecombustion gases to contaminate the oil.This expedites oil oxidation, which causesoil to thicken and age prematurely.High-mileage motor oil was designedand is recommended for engines with75,000 miles or more. The formulationbegins with a standard conventionalmotor oil additive package and highqualitybase oil. Additional anti-wearadditives, seal conditioners, burn-offinhibitor, seal swellagents, cleaningagents and frictionmodifiers areadded. Theresult is a lubricantthat reconditionsand revitalizesengine seals thusreducing engine oilconsumption anddriveway leaks.p. 28 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 29It maximizes mature engine performanceand minimizes exhaust smokewhile protecting your customers’ enginesfrom high-mileage wear.High-mileage motor oil is recommendedfor vehicles with any of the following:• 75,000 miles or more on the odometer.• Sooty or smoky exhaust.• Oil leaks.• Excessive engine wear.• Engine oil consumption.• Loss of power.Besides the practical benefits to yourcustomers, it is a great profit center foryour service department. An upgradedhigh-mileage oil change brings an additional$10 to $20 of net profit per service.Let’s assume your service departmentwrites 20,000 repair orders eachyear, including oil changes. If your servicewriters upsell 15 percent of these customersto a high-mileage service, youperform 3,000 high-mileage services.Keep in mind that over half of your customerbase are prime candidates. Yourcost of goods difference is around $1.50per service and your labor rate is thesame. You charge your customers a $20up-charge for the benefits of a highmileageservice. Your service departmentnets an additional $18.50 on 3,000 services,generating an additional $55,500in net profit for the year.A good changeAs with any addition or change to yourservice department, implementationand execution is everything. Simplyadding the product to your shop and theservice option on your menu does notguarantee success. Training your staff onthe benefits of high-mileage motor oil isa great starting point. They need tounderstand how and why this service isvaluable to the customer. If your servicewriters believe in the product, it will sell.The second step toward successfulimplementation is compensation. I recommendoffering a small “spiff” to yourcustomer service team for each highmileageservice sold. You may want tooffer this for the first quarter. This gesturewill build immediate momentumand will begin to build a high-mileagecustomer base that your facility will profitfrom for years to come. To hold yourstaff accountable for ongoing performance,I would also add the percentage ofhigh-mileage services to your monthlyreporting procedures. The monthly percentageshould be a topic of discussionand accountability at periodic managementmeetings.For information, circle 19 on RS card.The substantial profit potential and thevaluable vehicle benefits have combinedto equal the current success of the highmileagemotor oil category. This successhas not yet spilled into dealership servicebays. Automotive trends andadvancements in vehicle technology continueto influence motor oil technology.You must also adapt your service departmentto the changing environment.Don’t wait to capitalize on this profitableventure.Shane Terry is president of North AmericanLubricants Co., a national automotive lubricant supplier,and is currently serving a three-year term on theBoard of Directors for the Automotive Oil ChangeAssociation as an associate memberrepresentative. November 2007Fixed Ops Magazine p. 29

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 30FeatureThis Could bethe Big One Part 3A consultant wraps up his thoughts on life after General Motors’Simplified Maintenance.By Hal Scottn the most recent installment ofIthis story, we talked about the$83,300 you miss per year or$6,940 you miss per month.This is where we find most ofthe rest of it.You have to find it in expensecontrol—increased focuson other maintenanceservices that you areweak on sellingtoday, and anincreasedc u s -tomer pay non-competitive labor rate.Since flat-rate book time is the onlyhigh road, it has to come from laborrate on skilled repair work so that BigEd’s doesn’t steal your brake jobs.Now you have to figure out how manyhours and dollars of skilled repairwork you do each month. You willhave to analyze your work mix. Youmay be able to get help from customizedreports utilizing your in-housecomputer system with this project, butthis will probably require a tediousreview of every customer pay repairorder for a month and then annualizingthose numbers. You will have todecide what non-competitive laboris.Stay on the high roadThe dealers that we took our averagesfrom came out close enoughto call it “thirds.” One-thirdbasic maintenance, one-thirdpackaged repairs like brakes,struts and shocks plus generalrepair like alternators andminor oil leaks, and onethirdmore difficult or noncompetitivelabor such asreprogramming computers,electrical diagnosis andrepair; computer diagnosis,transmission and enginediagnosis and repair, T-caseand differential diagnosis and repair,difficult fluid leaks, water and windleaks, and squeaks and rattles. You willhave to decide what belongs in thiscategory but, again, stay on the highroad.O.K., let’s use that one-third of customerpay labor. If you know theflagged labor hours, great. If you justhave dollars, divide the dollars by yourdoor repair rate less $5 and get anapproximate number of non-competitiveflag hours.Divide $6,940 by your difficult repairflag hours for one month, which forour example is 772. That comes to $9per hour, so now you will have to raiseyour labor rate at least $9 dollars perhour on just the difficult repairs andwe will create an additional $83,300for the year. Your service consultantswill get a small raise out of this, andthey should because they have to sell aslightly higher-priced repair. You willneed to add their extra commissionson top of the $9, so add a little moreto make sure you’re safe. Ten dollars isa nice round number, so if I werecharging $95 per hour for this workbefore, the new number is $105.However, this is a break-even figure,and if your dealer is after you for a littlemore help with your declining fixedcoverage, make it $110.p. 30 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 31You’ll pick up an extra 45K or so and itshould be seamless. Remember toalways quote total job price, not partsand labor or labor time. This is the priceyou will need to charge to keep the lightson and give your dealer a fair return ontheir investment.And you got all upset over SimplifiedMaintenance.While this isn’t an easy exercise, itshould be one of the best changes thatyour service department and dealershipwill ever make. Finally, completely abovethe fray. Now your store’s serviceintegrity is second to none. Youhave taken the high road and customerswill soon learn that it’s theindependents, lube and tire (oh,and donut) shops that performunnecessary services. Isn’t it great tobe back?By the way, Dad was right. When yougive up something you want and thinkyou need for the right reasons, it usuallyopens up another door that leads to betterthings. In this case, the payback isincreased trust, integrity and profits.Can you say win-win-win?What they wantAccording to General Motors, customerswant:• Convenience• Quality/Value• TrustIf they get it, they are 85 times more likelyto return to the dealership to purchase.There are only two ways toensure customer trust when selling fluidchange services.• Show the customer the manufacturer’srecommendations in print.• Show the customer that a fluid is inpoor condition at his or her vehicleduring the initial write-up.Here’s another thing my dad told me. Ifit looks bad, smells bad and tastes bad,it is bad. The same is pretty much trueof all the fluids in the engine compartment,although most consultants bornafter “the Duke” quit being the mosthighly regarded male role model shouldprobably pass on the taste test.Color, translucence and smell are compellingand trustworthy reasons to sell orbuy a fluid change. I have seen manyfluid condition comparison tools butthe one shown in the photo below is thecleanest and most professional lookingtool we have seen to date. Thistool came from an automotivechemical supplier.We expect service consultantsto perform a quick walkaroundon each vehicle withthe customer present. Aquick pop of the hood anda dab of fluid from eachsystem that has a dipstickonto this fluid conditioncomparison tool quickly shows thecustomer how his vehicle’s fluids compareto new fluids. Every customer’svehicle, beginning from first-visit new,should be checked in front of him.Telling the customer that his fluids lookgreat establishes trust and honesty. Dothis procedure two visits in a row for acustomer and he will question you if youtry to skip or short-cut it.This is a very powerful trust-buildingtool. Don’t ruin this trust by selling typicalslightly browned and normally slightlyburnt smelling transmission fluid at35,000 miles. This is where you tripleyour customer’s trust by explaining thatwhile the fluid isn’t as bright red as newfluid, it is normal and acceptable fortheir current mileage and that you’llcheck it again on the next visit.If a fluid is abnormally discolored,burnt, metallic or opaque, it’s time toexplain to the customer that an abnormalityexists and the fluid should be furtheranalyzed by a technician orchanged. If the customer is a regular and“If it looks bad, smellsbad and tastes bad, itis bad. The same ispretty much true of allthe fluids in theengine’ve been showing them him fluidsince the fluid condition was good, thefluid service sale will be automatic. Thisis the highest road of fluid change sales.This is customer retention.Time for a changeIf this fluid change service is outside ofthe manufacturer’s recommendationparameters, tell the customer this andexplain in detail why it was done in thecomments on the repair order just incase someone wants to know why thisservice was sold at some later date.Consider taking a digital photo of thefluid comparison tool beside the customer’srepair order then save the digitalphoto as the repair order number ina file on a computer in the service drivefor easy retrieval.This is also the tool that tells you andthat guy who hauls 2 tons of rock up thesteep hill 39 times a day that he needs atransmission fluid change every 15,000miles. And everyone feels good aboutdoing it because his truck actually needsit.Let us know if you’ve been successful inmoving your service satisfaction/retentionor profits to the next level. Goodluck!Hal Scott is president and CEO ofHal Scott Consulting, providing on-siteA-Z fixed operations training. ”November 2007Fixed Ops Magazine p. 31

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 32Service DepartmentService Menus—Dos and Don’tsBy Tyler Robbinss I travel North AmericaAworking with dealers, manufacturersand suppliers, Iam asked over and over if Ihave a service menu thatincreases sales.It’s an interesting question:Service Menu increase sales?Can aIn thinking about this question, itshould spark other questions aboutwhat you want to accomplish withyour menus.Service Menu DOs Include pricing, ideally for eachindividual service as well as the packageprices. Not only does it demonstratethat you are up front and honestabout your pricing, it lets the customerknow the individual prices, so,should they want, they can buy individualservices. Offer some kind of incentive to thecustomer to buy the package—especiallyfor the various mileage intervalservices. Realistically, we have overlaprepairs, as well as genuine time savingsin performing the packages; passthat time savings on to the customer.p. 32 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 33“ Inform the customers of other servicesyou provide. As obvious as we think itmay be, customers don’t necessarily knowthat you offer appointments, car washes,loaner vehicles, shuttle services, accessories,etc. Inform customers of various otheramenities you provide, including largewaiting rooms with WiFi, premium coffees,juices, plasma TVs, separate “office”spaces, breakfast, sandwiches, etc. Inform the customer of other productsyou provide. Extended-service contracts,tire-and wheel road hazard programs,accessory installations and car cleaningsupplies, as well as do-it-yourself types ofaccessories such as license plate frames,trailer hitch covers, key rings, etc. If youhave a “boutique” that includes someclothing and general merchandise, informthe customer of that, too, in the menu. Do your best to give the customer asmuch information about your companyas possible. It builds credibility and confidencein your company. Include all of your contact information—phoneand fax, direct lines, Webaddresses and e-mail, and instant messengerif you have it.Sure, you want your service menu to helpincrease sales—and it will. But realistically,your menu has to give the customerreasons to continue to do business withCustomers know thatevery service operationoffers all of the checksand inspects for free.”you. And not just in your service department,either. If you can increase customerpurchases throughout the entiredealership, you become a “destination”for the customer for anything and everythingautomotive.Service Menu DON’TsOther than the obvious DON’Ts thatwould be the opposites of all of the DOs,here are several key points to remember: Avoid phrases “Dealer AddedServices” or “Additional DealerRecommendations,” or even using thephrase “Minimum and MaximumServices.” The wording itself simplysounds like the dealership is performingexcessive services. Utilize somethingmore regionally based: MetroRecommendations or Tri-CountyRecommendations. They sound andARE more relevant and build credibility. Avoid the fluff. Customers know thatevery service operation offers all of thechecks and inspects for free. Don’t try tojustify your “menu” with this fluff—itonly makes you look like you don’t havereal content to offer. Although some of your vendors willsubsidize the cost of the menus if youinclude their logo or some informationabout them, avoid it when possible. Or,at the very least, limit it dramatically.Remember, it’s your menu and nottheirs. Look at the menu from a customer’sperspective. The last thing youwant is to confuse them at all with rentalcarlogos or flush marketing. Customerswill lose focus on your products and services.The bottom line is that your menu isyour greatest tool. It’s your advertisementand it’s your commercial.Unfortunately, far too many dealers simplytreat it like an internal memo. Asservice management, it should be yourprimary focus—your number-one objective—andit is necessary to take the appropriatetime to ensure that you are puttingtogether the document that will helpgrow your business!Once you’ve created that menu that isworthy of a proper presentation, realizethat as good as that menu is, without anexplanation, it’s just a pretty document,nothing more.Display it as often as you possibly can,and with the appropriate presentation.At the time of vehicle delivery, every singletime the customer comes in for service,have copies in the waiting lounge andnear the parts counter.Finally, does your team know how topresent your service menu? Do theyknow how to handle the customers’objections? Do they know why a customershould do their maintenance? Dothey know why they should do these serviceswith you? If you hear your serviceadvisors saying, “Because the manufacturerrecommends it,” or “We have factorytrainedtechnicians using OEM parts,”then trust me—they don’t know how toproperly advise your customers.If your team needs it, get the appropriatehelp. You will quickly see the maximumbenefits from your service menu.Tyler Robbins is president ofAutomotive Training International(ATi), a company that provides serviceand accessory training throughoutNorth America. November 2007Fixed Ops Magazine p. 33

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 34Parts DepartmentBoredom and the Artof Accessories SalesBy David Copp Stringerhave a suggestion. On the lastISaturday of the month, go intoyour dealership and spend aboutan hour (try to make it thebusiest hour) hanging out in theshowroom. Sit down, walk around—and watch. What will you see? Unlessyou work at an accessories-active dealership,you’ll see exactly what my wifeand I saw a few weeks ago when wereplaced the family minivan.How many customers are sittingaround waiting? And waiting? Andwaiting? With nothing to do and notmuch to look at except each other andeveryone else sitting around doing thesame thing.That’s what my wife and I saw. Boredcustomers, excited about their newvehicles with no way to turn that enthusiasminto more dealership profits.Time poorly spentOur time at the dealership was minimal.We knew what we wanted, calledour local dealer and did the deal overthe phone. Kati and I didn’t set footin the store until it was time to signthe papers and switch the plates.Otherwise we’d still be there, staringat each other and those around usdoing the same thing for the 20 to 30minutes it took to process the paperwork.Not surprisingly, a friend of mine hada similar, probably more typical buyingexperience. Unlike my wife and me,she didn’t know which model shewanted and didn’t have a local dealershe knew well. She did things the oldfashionedway, helped along by thedealer, the manufacturer and commercialWeb sites like KBB, ConsumerReports and 34 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 35She took six weeks test driving six differentmodels. She visited at least two dealersselling each brand (two domestic, twoimports).From the start, even though she wasn’tsure which model she’d buy, she didknow she wanted a few accessoriesincluded in the deal: upgraded sound,self-dimming mirror, rear bumper guards,bigger wheels and maybe a few other niceto-have-but-not-necessaryitems.She told each dealership up front shewas a buyer, which model(s) she wasinterested in and which features she hadto have, whether or not they were standardon the models she was considering.At each dealership she sat around, alonemostly (after the third store, her husbandstayed home) for 20 to 60 minutes whilethe salesperson and tower did theirthing.Even knowing she was a buyer willing toadd profitable accessories to store coffers,the dealerships had nothing to pique herinterest in even more goodies. Therewere displays hidden in the far corners ofthe showrooms, but she usually had tofind them herself. There were modelbrochures, of course. The had lists, limitedpictures and no prices. None hadthe accessory range or showcase thatcould have impressed her enough tomake the dealership even more money.Not too surprising, we both had thesame showroom experience. We bothhad the same reaction: “Why am I sittinghere bored when I could be choosingaccessories to make the new carmine?” In my case, I showed the salespersonone of our accessory sites on hercomputer. Her reaction? “That’s socool. How did you find out about it?”My friend did something similar.Through our association, she was familiarwith point-of-sale accessory sales sites.At each dealer, she asked the salespersonwhy they didn’t have something shecould do while they were taking care oftheir business and told them about mine.Without exception, the sales people wereenthusiastic, saw dollar signs escapingtheir pockets and explained that sadly,they had nothing to do with store policiesand business rules.Both of us bought new cars. We both hadour own financing, but she rolled an extra$1,000+ in OE accessories into her deal.Accessories she had to ask for and thatwere never suggested by any salesperson orsales manager involved in her search.More potential profits were lost becauseher husband might have stayed involved(and maybe talked her into leather) hadthere been something interesting and“instructive/constructive fun” to preventthe boredom and discomfort of staring atother bored—and increasingly impatient—customers.Things not purchasedWe both saw lost opportunities: singlewomen (they’ll feel the dealership’s concernfor their safety when someone offersan extra alarm and safety bundle).Families with young children (an interiorprotection package will safeguard theirinvestment where a family with kids needsit most!). Young swains out to buy theirfirst pick-up or SUV (the only thing hotterthan this vehicle will be you when youcrank up this super premium system withmonster bass! Just add it to the sale whenyou finance!).These customers could have easily becomedealership service bay and parts loyalists,appreciating an approach to their personalvehicle needs—and to the attention theirpersonal wants got, as well.The moral of the story? My dealer mighthave increased his profit with accessorysales had Kati and I been sitting in frontof a computer screen oogling all the neatstuff we could get. My friend’s dealershipmade accessories money in spite of themselves.Both could have made even morefrom all the other customers waitingaround staring at each other instead ofplaying with an accessories configuratorand liking what they saw.Back to your experience. When you tireof watching people watching each other,walk up to a few of them. Casually askhow they’re enjoying their new vehiclebuying experience. Ask if they’d like tohave something interesting and entertainingto do while they wait. Ask others ifthe vehicle they’re considering hasabsolutely every little thing they’d like onit, do they have plans for add-ons, wouldthey consider adding an item they like if itweren’t standard equipment? No hardsells, just ask questions. I think you will beamazed.Even if you don’t talk to customers, you’llhave to agree those folks look like they’drather eat tacks than sit around a car dealership.Giving them the opportunity topass time browsing the aisles of a colorfuland interactive store accessories catalogwill at least give them something entertainingand informative to think about.What would a customer-friendly accessoriescatalog do for the end of the storewhere the real money is made?My friend traded with a small dealershipwithout huge parts and accessory inventories.She had to wait a few days to get heraccessories installed. In the meantime,she got to know their parts manager andis developing a comfortable relationshipwith the back end of the store. They’re allgetting a piece of her accessories money.And if I know her, she just might be crazyenough to travel 27 miles to the dealershipfor service because she appreciates theirefforts. Who knows?My point is that keeping customers waitingis painful. Keeping them bored (andtherefore feeling like the wait is evenlonger) can be critical. Keeping themengaged and getting them invested in their“just right” new vehicle, however, willmake you a very healthy profit.David Copp Stringer is president ofInsignia, an integrated, whole-dealershipprocess for increasing store profitsthrough accessory sales. November 2007Fixed Ops Magazine p. 35

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 36Body ShopThere is aBetter Wayto Operatethe DetailDepartmentBy Bud Abrahamince the first automobile hitSthe roads in America, therehas been a need for detailing.Dealers may not havestarted out detailing carsbut as old cars were traded in andnew ones purchased the dealer hadto cleanup these trade-ins.As the number of automobiles onthe roads grew and there were moretrade-ins, more people were neededto clean them. So detail areas wereset up in dealerships, although theywere rather primitive in terms oftechnology. But the dealer recognizedthe need to refurbish the growingnumber of trade-ins.With a very few improvements intechnology, the majority of automobiledealerships today are still operatingtheir in-house detail operationthe same way as was done 75 to 80years ago. They are using heavy electricbuffers, wool buffing pads,cheap shop vacuums, a few brushesand rags, and chemicals dispensedfrom plastic bottles.However, in today’s competitive market,this old technology and the attitudinalparadigm that most dealers,and the entire dealership for thatmatter, has about detailing is costingdealerships money. High laborcosts, high chemical costs, low production,slow turn-around time and,most important, the inability to selldetailing services to the public.Higher demandsBecause selling used cars today isvery profitable, dealers want a vehicleproperly detailed at a low price.But that is an oxymoron. We allknow you get what you pay for.Dealers who have an in-house detaildepartment often hire minimumwage people and pay low wages, orpay by the vehicle, piece work, andexpect the detailer to care about thequality of the job.p. 36 November 2007Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 37However, if a dealership can change itsparadigm about detailing, it can achievethe results it wants. New technology hasbeen developed that will do away with allthe shortcomings of the primitive detailtechnology that has been used in detaildepartments for years. This new technologyand correspondent management systemswill put the dealer in charge of whatis done, what is used, how it is done andhow long it will take—something thatdoes not happen today.This new technology can literally automatethe detail process. In addition, newdetail technology and management systemswill allow the detail manager andthe department supervisor to activelymanage the detail department with realtimeinformation and interactiveresource allocations.Some of the capabilities of this new technologyand operational systems are:• A clean, organized shop.• Elimination of hundred of plasticchemical bottles.• Elimination of manual handling anduse of chemicals.• Organized work areas for each detailer.• Faster turn-around time by utilizingtwo-man detail teams.• Control over the detail process bymanagement, not the detailer.• Ability to both complete all in-housework and sell detailing services to thepublic for profit.In addition to the benefits mentioned,there are several more very importantbenefits, depending on how a given dealershipmanages the detail department.It's hard to place dollar savings on thesebenefits, but operationally they areimportant, and will save or generatemoney.AccountabilityIn most dealership detail departments,the technicians play the “pointing game”or the “he said/she said” game. When adetail shop is set up and operates on aprofessional basis it allows no one toescape from accountability. After thedetailer logs in, every action is time anddate stamped. The history log is maintainedfrom the time the detailer starts onthe vehicle until it is completed. The detailmanagers and fixed ops manager can viewthe step-by-step status history in real timeor after closing and identify every actiontaken during the detail process. This typeof information allows management to betterunderstand where improvement isneeded and what the department and individualdetailers excel at.“We all knowyou get whatyou pay for.”CommunicationCommunication is always difficult toimprove in any department. However, if adealership detail department is set up properly,it encourages and captures writtencommunication. Not just by the actionslogged during the detail process. The usedcarmanager or salesmen are encouraged toput in writing the special needs of the vehicle.This should be a requirement for theused-car department on every car going tothe detail department. As they say, “Verbalorders don’t go.”Increased awarenessIs your detail manager always up to dateon what work is required to completethat day? If not, why not? Why is it sohard to keep a pulse on the detail shopactivities? Today, the detail manager mustwalk around the shop, do spot checks orstudy log sheets to see if everything to bedone that day is on track. He can’t bedetailing cars. To find out why promisedtimes are missed takes a great deal oftime and effort.Now that we have discussed the benefitsof an updated, well-managed detail shop,“What if youcould sell twodetails a day at$175? What doesthat mean toyour profits?”let’s talk about the return on investmentfor the dealership. The costs of implementingthese changes is small in comparisonwhat you are now losing. A hightechdetailing system can cost between$30,000 and $50,000, including installationand on-site training, depending onthe number of bays to be equipped. Butthe monthly payment for such a systemwould be more than covered in labor andchemical savings, not to mention higherqualitywork, faster turnaround time andthe ability to sell detailing services to thepublic.Consider if each detailer gained only onehour’s productivity per day. What thatwould mean to your dealership? What ifyou could sell two details a day at $175?What does that mean to your profits?Transformation of a dealership detaildepartment can be simple and painless.You have to first commit to seeing thevalue, want to do it, realize and acceptwhat is needed and—especially—be willingto get the right people. The ones youhave now may be the “wrong ones.”A change in your detail paradigm will dowonders for your dealership and moveyour detail department from the early1900s into the 21st century.Bud Abraham is president ofDetail Plus, a Portland, Ore.-basedmanufacturer of car appearancesystems and products. November 2007 Fixed Ops Magazine p. 37

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 38AdministrationThe Long HaulBuilding customer loyalty is the best way a dealershipcan set itself up in trying times.By Kelly PriceMany dealers agree it is veryhard to stay focused onlong-term goals when it isbecoming more and morechallenging in this marketjust to keep your head above water. Asnoted in an article in Automotive News(Feb. 12, 2007), “The Detroit 3’s chronicsales slump has begun to hurt a revenuemainstay for dealers: service andparts.”This suggests that car dealers representingthe “Big 3,” as well as all manufacturers,must develop programs thatfocus on improving retention of a customer’spotential parts and service business.By developing solid retention programsto compliment a good salesprocess, dealers can avoid the pressurethat this market is putting on the bottomline.p. 38 November 2007 Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 39Chatter on challengeIn recent months, many industry publicationshave championed the success ofe-mail campaigns, direct mailings andnewsletters. These kinds of communicationshelp the customers stay focused onthe selling dealer as the primary sourcefor customary maintenance and theyaddress one of the primary questions ona car dealer’s mind: How do I retain thecustomer I sell a car to today in my partsand service departments for the longhaul?The retention challenge is further complicatedby fear that focusing for tomorrowwill potentially diminish a dealer’seffort to hit the ball being thrown at youtoday—selling automobiles and preservingfront-end gross. Retention programsare so vitally important that dealersmust be willing to sacrifice short-termprofits for the extremely rewarding longtermgains. Additionally, with the rightcommitment and attention to a goodprocess, these short-term sacrifices willbe minor or temporary, or they may notexist at all. Indeed, dealers begin to realize—andthere is evidence to show—thatthey are not sacrificing at all; they areinvesting.Data published by many sources help usto understand the importance of keepingyour customer in your servicedepartment. Most dealers will rememberan article in the August 2006 edition ofFixed Ops Magazine that showed thatthere is a 76-percent probability of sellingthe customer another car in thefuture if the selling dealer retains andperforms all of the recommended factorymaintenance.Conversely—and startling—if the sellingdealer loses the customer’s recommendedfactory maintenance business andonly performs the warranty services necessaryon the car, the opportunity to sellthe customer the next car drops off dramaticallyto only 14 percent! The conclusionbecomes obvious: A dealership willprosper and build loyalty only if it focuseson retention programs that can bringthe customers into service for all of theirroutine maintenance.The ability to survive and be profitablein the long term rests, in part, on theshoulders of the service department.In this retention effort, specific challengespresent themselves. For example,how does a service department retainthose customers who are inclined to visitthe “quick change” facilities that seem tobe popping up everywhere? Thankfullythere are several proven ways that a dealercan tie the customer to the servicefacility. Some are more effective, simpleand profitable than others, and it is upto the dealers to find programs thatwork—and work best for their facilities.Many dealers have chosen the “loyaltycard” approach based on the same philosophyas a “frequent flyer” program.Loyalty programs work because manycustomers are familiar with the processfrom other types of commerce. Largegrocery and convenience retailers capitalizeon customer loyalty by offering keychain cards that save the customermoney every time they go through thecheck-out lane. Credit card companiesoffer customers the opportunity to earnpoints and dollars if they simply remainloyal to using the card for all of theirpurchases. In a car dealership, loyaltycard programs tend to be slightly lowerin upfront cost, but may have somebackend expenses such as future discounts,free oil changes or other services.Dealers also need to account for theinvestment in maintaining the recordsnecessary to implement and support theprogram.Other programsAnother type of retention program thatis rapidly gaining favor in the marketplaceis the concept of offering a lifetimewarranty on all new and pre-owned carsa dealer sells. In addition to creating aneffective sales and marketing processthat differentiates the dealer, lifetimewarranties are a very effective serviceretention tool. Bob Mancuso, who representsa program called “WarrantyForever,” says that the program offersthe dealer a unique and innovativeapproach to marketing, and then ties thecustomer’s routine maintenance businessto the selling dealer for life.Warranty Forever is a comprehensivepowertrain warranty that is given to thecustomer at no charge. In return, thecustomer must perform all of his or hermaintenance with the selling dealer or apre-authorized facility. The program alsoprovides the dealer with detailed reportsthat help them to better understand thedriving and spending habits of their customers.And it communicates with thedealer’s customer through an emailreminder system that encourages thecustomer to maintain contact with theselling dealer and return to the sellingdealer for factory-specified scheduledmaintenance.Although the upfront investments inlifetime warranty programs are slightlyhigher at the point of sale, there is verylittle, if any, expense once the customerdrives away in his or her new car. Inaddition, with some lifetime warrantyprograms, the dealer has the ability toparticipate in the long-term profits ofthe program!Whether a dealership implements a loyaltycard, a lifetime powertrain program,or another service retention process, thefact is that it needs to implement something.In this challenging marketplace—with less loyal and more educated customers—dealersare realizing, sometimespainfully, that an over-emphasis on shortterm profits may lead to an increasedinability to compete that may requiredifficult choices in the future.Kelly Price has more than 18 years of experience indealership training, specializing infinance, sales and service, and iscurrently the director of operationsfor National Automotive Experts,a finance and insurance productsprovider and administrator. November 2007Fixed Ops Magazine p. 39

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 40New ProductsAES-260 Basic Retail Soft Touch Car Wash from AUTECThis base model soft-touchmachine is built with allstainless-steel construction,with stainless steel guiderails, treadle ramps, tirestops and galvanized track.Other features includewater-based hydraulics withtank heater, quick releasedoor panels, fore and aftmitters with full mitterretract standard, and onboardor off-board rinse capability.The car wash system is built on the company’s best-selling 425platform. Recommended bay size is 36 feet long and 16 feetwide, with short bay operations available from the factory. Itaccommodates a maximum car size of 110 inches and 84 incheshigh. Specially designed water-based hydraulic fluid makes themachine environmentally friendly in all circumstances.For information, circle 20 on RS card.ADVERTISERS DIRECTORYATcon Page 41Automotive Facilities / AutoStone Pages 29and 41Broadway Equipment Page 41Car-O-LinerInside FrontCoverCar People MarketingInside BackCoverDealerPower / DME Pages 8and 9IMAC Paint Chip Repair Page 21Infomedia / Microcat Page 12Insignia Pages 15and 41Jeff Cowan's ProTalk Page 5Kaeser Compressors Pages 13and 41Langka Page 21Mobile Productivity / MPi Pages 17and 41NitroFill Page 7Parker / TireSaver Pages 19and 41PurigeN 98 Page 25Rotary Lift Pages 10and 11Sally Whitesell's Service Solutions Page 27Schaefer Systems / SSIBack CoverTSD Loaner Management Software Page 3ZAK Products Pages 22,23 and 41Microsoft BizTalk Server 2006 R2 from Microsoft Corp.The server features core service-oriented architecture and businessprocess management technology. It includes advancementsfor radio frequency identification and electronic data interchange,and extended interoperability such as Enterprise ServiceBus Guidance and Line of Business Adapters. Together, thesecapabilities make it easier for companies to connect systems withintheir own organizations and across those of trading partners.The product delivers extensive SOA and BPM capabilities as partof the overall Microsoft application platform. The platformspans products and technologies to develop, deploy and manageapplications and IT infrastructure across the organization locallyand worldwide.For information, circle 21 on RS card.Pulsed MIG Aluminum WeldingSystem from Miller Electric Mfg. Co.The new aluminum welding systemfeatures a newly enhanced weldercombined with the new XR-Aluma-Pro gun for 4000- and 5000-seriesaluminum feeding and welding performance.This new system comeswith everything necessary to weldaluminum “out of thebox,” includinga 25-foot air-cooled gun,reversible 0.035-inch to 3/64-inch u-groove drive rolls and a Teflon intermediateguide.The welder includes new pulse programmingto meet the specific welding requirements of 4000-and 5000-series aluminum, while providing a more forgiving arcand increased consumable life. When combined with the pushpullgun, special calibration software syncs the motor speeds inthe gun and power source to provide optimal feeding.For information, circle 22 on RS card.The Nav300 GPS Device from DelphiThe new device that integrates the latest cutting-edge hardwareand software into a lightweight,portable package with an easy,intuitive interface at an extremelycompelling price point. The productincludes Bluetooth connectivity,a ZAGAT Survey Guide, textto-speechnavigation, voice command,lane assistance and roadsigns, speed limit warnings, brandedpoints of interest and an entertainmentsuite.For information, circle 23 on RS card.p. 40 November 2007Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 41MarketplaceFor information, circle 24 on RS card.For information, circle 25 on RS card.For information, circle 26 on RS card.For information, circle 27 on RS card.(866) information, circle 28 on RS card.For information, circle 29 on RS card.• Premium Fluid Maintenance Programs• Industry Leading Equipment Placement Programs• Service Advisor Sales Training• Technician• Innovative POS Materials 1-800-514-6011• Effective Customer Retention ProgramsFor information, circle 30 on RS card.For information, circle 31 on RS card.November 2007 Fixed Ops Magazine p. 41

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 42SpotlightDealership SellsParts Near and FarBy Sarah HumphreysWhen a dealership sits in arural area and doesn’tdon’t have a large body ofpotential customers inthe immediate vicinity to sell parts to,what can it do? Sell to the world!That was the thinking by PartsManager Tim Ferreira at Gary RomeHyundai in Holyoke, Mass., when hedecided in 2005 to create two Web sitesthat would market genuine Hyundaiproducts to owners and enthusiastsacross the globe.“We’re in a small community inWestern Massachusetts, and we wantedto broaden our horizons throughoutthe United States and get more business,”says Ferreira. “The best way todo that was to open an e-commerce siteand open ourselves up all over theworld—so we’re not limiting ourselvesto just Western Massachusetts.”The site www.hyundaiaccessorystore.comsells apparel and merchandise, includinglogo items, mud guards and bugdeflectors; www.hyundaiperformanceautoparts.comsells performance parts,like catalytic converter back exhaustssystems. The fully functional e-commercesites have taken orders fromcountries including Germany, Canada,Venezuela, South Africa, Spain,England, Fiji and Puerto Rico.Potential customers, who are both individualsand other dealerships, aredirected to the site through E-bay, aswell as listings on 295 directories andp. 42 November 2007Tim FerreiraCommission Junction, a Web-basedcompany that gets the sites listed onothers’ sites.“So if people go through a searchengine like Google, chances are they’llfind our Web site,” says Ferreira.The strategy has worked. The site hasonly been functional since July 2005,but word has gotten out. Web sales in2006 were just over $100,000 andFerreira says 2007’s are projected togrow to $250,000. Doubling again,2008 revenue is expected at $500,000.While that may sound like a lot of revenuefor a parts department farremoved from a major metropolis,Ferreira says it adds up to about 15 percentof his department’s sales, but nextyear it will add up to 25 to 30 percentof sales.“It’s a lot of moneybut it’s a small percentage,”he says.“We started offsmall and now we’regetting better. Themore we’re doing itand the more accessoriesHyundaioffers, the morewe’ll sell.”Ferreira says thedealership has justabout outgrown itsbuilding. One ofthe reasons, heexplains, is the serviceprovided by him and his staff.“The main thing I’ve learned over yearsis that it doesn’t matter what you sell;it’s all about customer service,” Ferreirasays. “They can buy from anywhere inthe country. The reason they do businesswith me is that we go out of ourway to take care of the customer.”Sarah Humphreys is editor of Fixed Ops magazine.If you know someone whobelongs on this page, contactEditor Sarah Humphreys atsarah@fixedopsmag.comor (714) 271-4224.Fixed Ops will buy you lunch!Fixed Ops Magazine

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 43For information, circle 3 on RS card.

November 07 FOM:Nov 07 FOM 11/9/07 7:20 AM Page 44For information, circle 1 on RS card.

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