Setting and enforcing a new standard in your dealership at the very beginning of the year is the easiest way to ensure that you and your staff don’t fall back into old habits. Here to walk us through some crucial habits that dealers need to improve or adopt, in order to be successful in 2020 is Michael Roppo, President and Director of Dealer Fixed-Operations Consulting and Training at Automotive Domain Results.
VIDEO TRANSCRIPT:
Jim Fitzpatrick: Hi everyone, Jim Fitzpatrick with CBT News. Thanks so much for joining us today. Today we’re so happy to have with us Mr. Michael Roppo. I know that you have seen this gentleman before on CBT News. He is a world-class guy and he knows fixed ops like nobody else in the industry. He’s also president and director of dealer fixed operations and consulting and training at Automotive Management Resources. Michael, thanks so much for joining us.
Michael Roppo: Jim, thank you for having me again man. I really appreciate it.
Jim Fitzpatrick: We get such great comments whenever you’re on from our viewers and subscribers, so let’s kind of jump right in. You wrote an article, Eight Habits and Business Practices of Highly Successful Dealer Operators.
Michael Roppo: I did.
Jim Fitzpatrick: I want to go right through the list with you, starting with number one, strive to create the right management team.
Michael Roppo: That’s a very important thing to do. I mean you can’t run that business anymore with a wing-it plan, you know?
Jim Fitzpatrick: Right.
Michael Roppo: You have to have people that know exactly what they’re doing every day, every time, without fail, no exceptions. I highly recommend that people need to take a look at what people are in their employ, how they onboarded them, how they support them, and make sure that they have the right players in those positions at all times at every profit center.
Michael Roppo: You can’t get A level performance from B and C level players. So the thing is it’s going to require an entire different mindset. So that’s a very big point, and I think training has to be the core competency there.
Jim Fitzpatrick: Right. What do you say to the dealer that says, “I hear what you’re saying Michael, but, man, it’s tough to get good people. Where do you get them from?”
Michael Roppo: It’s tough to get great profits, isn’t it?
Jim Fitzpatrick: That’s right.
Michael Roppo: So the thing is at the end of the day you either have people that know what they’re doing and asking your valued customers the valuable questions that they need to ask or you’re going to sacrifice profitability.
Jim Fitzpatrick: That’s right. That’s right.
Michael Roppo: I think it’s very important.
Jim Fitzpatrick: There’s no question about it. To continue to turn over your management staff looking for that perfect manager isn’t the right thing either, right?
Michael Roppo: No. You got to… I think people need to do a much better job onboarding people, interviewing people, asking them the right questions, not just filling spots because somebody left or somebody put on a signing bonus down the road and they left you. I think that’s got to stop in the industry. I think people need to provide real training.
Jim Fitzpatrick: That’s right.
Michael Roppo: Especially nowadays, where everybody is everything to everyone, right? Listen, there’s a lot of… As you know, there’s a lot of consultants out there. But some of the stuff that consultants put out is insulting, so the thing is it’s got to get to a point where people are proven in the industry to provide the level of service that the customer or the client wants to pay for and the client needs.
Michael Roppo: So any consultant that goes out into the field has to know the competencies of the individuals that he’s dealing with. I just think that’s great business.
Jim Fitzpatrick: I agree. I agree. Number two, you had to empower their team.
Michael Roppo: Empower their team. That’s a good one, because you know what? You either have empowered people or you don’t. It’s not a choice today. I mean you got to be able to make sure that your people are able to make the decisions that they need to make without asking for permission.
Michael Roppo: A lot of times, especially in the front end, right, you keep going back and forth to the sales manager, back and forth to the desk, back and forth to the customer and whatever have you. People are sick and tired of being sick and tired. It doesn’t have to be that complex.
Jim Fitzpatrick: That’s right.
Michael Roppo: I think the game has changed and it’s going to keep changing, and it requires people that understand product knowledge, people that understand the competency level required to be that person that you put in that position, and they need to be checked up on constantly, because they break, right? People break. Things happen, so people need to understand that in our industry, and that’s where I think a lot of the gaps come from.
Jim Fitzpatrick: I would agree. Establish and communicate clear achievable goals. Talk to us about that.
Michael Roppo: Well, the thing is, look, the industry is based on CPI. I mean NADA does a great job with benchmarks and stuff like that, but quite honestly benchmarks are too late result imitators, right? So I think people need to latch on to how is the month going instead of waiting for the financial statement, which I call the too late statement. You might not like what it says.
Michael Roppo: The critical performance indicator tracking system requires you to get involved every day, every time, without fail, no exceptions, to drive your business forward whatever happens in the economy. I’ll give you a for instance.
Michael Roppo: You know that you’re three people light today as an appointment. Well, three people light, quite honestly, at a $355 per– is a lot of money, okay? So the thing is you got to make sure that you have in your pipeline what it is that you need to make up that money to make sure that you create your map, right?
Michael Roppo: A lot of times we think of the bottom line, we think of the overall or what have you. We don’t break it down, and it’s really all about hours being sold in fixed-ops.
Jim Fitzpatrick: That’s right. That’s right.
Michael Roppo: You got to maximize your hours, so all that stuff is very important.
Jim Fitzpatrick: Which is a perfect segue to your next number four, hold regular manager meetings.
Michael Roppo: Yeah, daily huddles, man. I mean you have daily huddles, you get everybody involved, make sure that they know what’s going on, and make sure they’re able to do the things that you require them to do with the people, the best practices, and the tools that you give them every day.
Jim Fitzpatrick: What is the best time in your opinion during the day to have those huddles?
Michael Roppo: 10:00.
Jim Fitzpatrick: 10:00 a.m.?
Michael Roppo: 10:00. Yeah. Absolutely. You try to straighten out that line as soon as possible, so this way you know what your agenda is, you know what’s come in. It’s right after the morning rush and then you can break away, whether it’s a break time or whatever have you. Buy the guys coffee, do whatever you got to do, but you got to huddle up with your people so you know what’s going on and they know what’s going on.
Jim Fitzpatrick: What’s the maximum length of time that meeting should take place?
Michael Roppo: 15 minutes.
Jim Fitzpatrick: How many?
Michael Roppo: 15 minutes.
Jim Fitzpatrick: 15?
Michael Roppo: 15 minutes tops, okay? It’s what you need to do, what needs to be done, where are we, and where do we need to go? Very, very important.
Jim Fitzpatrick: Sure. Acknowledge and reward performance.
Michael Roppo: Yeah. You got to acknowledge and reward performance. We talk about the controllable area you service, right? We always look at the controllable area of service the way ADCON used to tell us years ago.
Michael Roppo: Quite honestly, the people that are in control of those controllables are the service writers, the service advisors. So the thing is you got to let them understand how those numbers work every single day and you got to make sure that they’re able to influence those numbers every single day, because you either cash in or cash out of your business every single day, and people GAP up on that. And when I say GAP, it means give away profit.
Jim Fitzpatrick: I love it.
Michael Roppo: It doesn’t pay very well.
Jim Fitzpatrick: Yeah, which is a perfect segue to number six, which is manage by numbers.
Michael Roppo: Manage by the numbers. Everybody needs to know what numbers they need to reach, okay?
Jim Fitzpatrick: Yeah.
Michael Roppo: You have to make sure that any time that you put an estimate together your in the profit zone. That’s why I love the profit zone, right? So the thing is this. When you’re in the profit zone, that means the gross profit percentage on the level of service that you provide, the gross profit percentage on the pricing that you basically are charging customers, making sure you’re providing value to those customers for that price, making sure that you’re charging the right prices, and making sure that you’re paying out the right prices to get the work done, because I see that a lot.
Michael Roppo: A lot of people… You know, you’re paying out… It’s a two hour job and you’re paying out 2.5, it starts devouring that value.
Jim Fitzpatrick: Yeah. There’s no question. So top performers, they lead their teams seriously, seriously now.
Michael Roppo: Okay. Top performers are always involved with their teams. I think they need to understand their teams from a standpoint of what best practices are. One of the biggest things when I look at these surveys, for instance, is… And I’ve said this before, keeping the customer informed about the status of the vehicle while it’s in your possession. That’s a very critical one that I see people failing all the time.
Michael Roppo: Look, it gets to the point if the customers are calling you and asking you this real valuable question called what’s going on with my car, clearly you’re not doing your job, all right?
Jim Fitzpatrick: That’s right. That’s right.
Michael Roppo: So the thing is it’s your job to keep the customer informed about the status of what’s going on with their vehicle while your technicians are working on it.
Jim Fitzpatrick: That’s right. And in terms of communicating to the customer, best if you text nowadays? Everybody just wants to be able to be in a meeting or at a coffee shop or whatever and receive a text, here’s what’s happening, right?
Michael Roppo: Texting. There’s no lying in texting. Texting is so good that people walk into poles because they look at their phones like 98 times a day. They can’t avoid-
Jim Fitzpatrick: That’s me. That would be me.
Michael Roppo: That would be me too.
Jim Fitzpatrick: I know. You have here they never cheat, which I think is interesting. That’s number eight.
Michael Roppo: They never cheat? Well, you know what? I look at that from… Quite honestly, when you’re looking at numbers constantly, at the end of the day there’s a saying in the industry that goes something like this. It goes liars can’t figure and figures don’t lie. If you know somebody that’s no doing their job it’s going to show up on the bottom line every single day. You do not have to wait for a financial statement to tell you dude, it just didn’t work out man.
Michael Roppo: The thing is that’s what cool about our industry, right? We get called out every 30-31 days. The saying goes you’re only as good as your last month, right? So I say get in front of the month on the first day of the month and act like it’s the last day in the month every single day.
Jim Fitzpatrick: That’s right. That’s exactly… You’re dead on.
Michael Roppo: You create your environment, right?
Jim Fitzpatrick: You’re dead on. It’s difficult to do some times, but no truer words have been spoken.
Michael Roppo: Those are the… You know, that’s a very important point and that’s a good segue into why you need to be in a tremendous amount of control, right? We expect certain people to do certain things. Then we hire these trainers, and they’re all good people, most of them, right? There are some violators out there, but there’s people that come into your dealership, they put the phones on hold, put the customers on hold or whatever have you. They even bring you away to have these seminars, right?
Michael Roppo: But the idea is to get people trained in their environment when the phones are ringing, the customers are complaining, you’re talking about price. I mean they have to juggle… Listen, the service advisory job today is a very, very difficult job.
Jim Fitzpatrick: I know. I know.
Michael Roppo: You can’t have training positions going on when there’s customers expecting a level of service that you need to provide to them.
Jim Fitzpatrick: Right. That’s exactly right. And probably one of the most important roles in the dealership is the service advisor today, because that’s the one that’s going to sell all of the future cars to that customer, right-
Michael Roppo: That’s correct. You know there’s a saying-
Jim Fitzpatrick: … and bring the people back.
Michael Roppo: There’s a saying in the business that basically sales sells the first car and service sells all the rest. Quite honesty, I think that’s total BS. I think excellent service, even in sales, sells all the cars.
Jim Fitzpatrick: That’s a good point. That’s a good point.
Michael Roppo: To give good service you got to know the expectation of that customer. If they’re putting too much money into that vehicle, quite honestly it’s your turn from the service side to say, “Okay, Mr. Jones, you know what? I think it’s better if we put you into another vehicle,” and turn them over to the front end, okay?
Jim Fitzpatrick: That’s right. That’s right.
Michael Roppo: So the thing is, you know, you might have to transfer some gross in the process, because a service manager or a service advisor is not going to do anything to transfer their gross to a different department. We’re held accountable every day.
Jim Fitzpatrick: That’s right. That’s right. Yeah. Good point. Michael Roppo, president and director of dealer fixed operations consulting and training at Automotive Management Resources, you are the man. For dealers who are listening to Michael right now, give him a call, reach out to him, because I’m telling you I’ve seen it first hand, he can change your life in your service department for the better.
Michael Roppo: I appreciate that.
Jim Fitzpatrick: So, Michael, thank you so much for joining us on CBT News. It is always a pleasure.
Michael Roppo: Thank you. Thank you very much Jim, my pleasure.
Jim Fitzpatrick: Thanks.
CBT Automotive Network, the number one most-watched network in retail automotive. This has been a JBF Business Media Production.
