Express Service: The Parts Impact

One of the most "debatable" topics that I have heard from dealers and managers this year has definitely got to be the idea of automotive dealers offering their customers "Express Service", even though each manufacturer has their own "tag name" for the process. The question is..."How does it impact the Parts Department"?

Though "Express Service" is not really new in our dealerships, a few manufacturers introduced this concept or process as far back as the late 80's and early 90's. Much was learned in those early years, some good and some not so good as well as the overall impact that it had from the beginning.

I believe that one of the biggest impacts that "Express Service" has had on our Parts Departments is the shift in the main three customer pay sales categories. These categories are usually defined as Competitive, Maintenance and Repair and for years, we have seen percentage breakdowns led by Repair, followed by Maintenance and Competitive carrying the lowest percentage of the customer pay sales mix.

Today, we are seeing many dealerships experiencing a "total reversal" of their customer pay sales mix shifting over to the Competitive and Maintenance category. One of the most obvious reasons is the quality of the vehicles manufactured today versus "yesteryear" has significantly improved. We are also seeing this trend by watching our warranty parts sales diminish slowly year after year.

So how does this all play out for the Parts Department and what is the next step? I believe that the old phrase "go with the flow" has to be the number one "brutal fact" that we have to deal with. We have to realize this shift and rethink once again where we need to focus our marketing strategies, profit margins and most importantly...our support to the "Express Service" Department.

Even though I see many dealers now offering this service, they seem to forget that if "competitive" and "maintenance" are now the leaders within the overall customer sales mix, why aren't they competitive?

In many cases, parts managers are still pricing these competitive and maintenance items much like their repair or "captive" customer sales with the exception given to the oil & oil filter. Many parts managers seem to have it "bred" into them that they have to retain at least a 40% gross margin on all customer pay sales.

I realize that in many cases, price is not necessarily the issue, but I DO believe we need to be at least "in the ballpark" on these prices. I have performed many pricing comparisons as part of the training I provide and I have personally seen prices vary on the SAME parts and services up as much as 100%!

In an "apples to apples" comparison, that would be like paying twice as much for that same apple! People will notice and then it becomes a "trust" issue and they will feel like they are being taken advantage of. Many more of our customers are doing their research and may know more than we think they do.

One of the best ways to get our prices in line is to have all these competitive and maintenance parts "weighted" to one price and at a "competitive" price. We should accept a lower gross margin on these items even though we don't want to be the cheapest, we DO want to be the best with the right quality parts.

Here's a question I have..."Why is it that many parts managers are okay with  "wholesale" gross margins anywhere from 18% - 22%, but don't have that same belief in these "competitive" customer sales?" Are we not in "competition" with our wholesale customers? Why not "wholesale pricing" to the public on these "competitive" parts and services?

Lastly, we all know that no matter how well the vehicles are manufactured today, they will still break down at some point. The average vehicle ownership is surpassing ten years so the "repair" side of the mix will always be there.

The question is, do we want to offer the best service and price on the first two categories in order to gain and earn that customers' "repair" business? Or, do we "price" ourselves out of the opportunity in the first place, only to lose that "repair" business down the road.

Request a No-Charge Express Lube Evaluation

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

Guidelines to Sidelines...Where DO We Draw the Line?

I have always been intrigued by our industry standards and guidelines because it seems to me...at some point back in time, or maybe even perhaps more recently, someone had to "set the bar" on performance in our various fixed operations departments. 


I guess we have all just grown accustom to these guidelines and run our dealership operations focused on these target initiatives.

Personally, I believe that we should all have individual standards, guidelines and goals in our stores based on the manufacturers' and industry experts expectations, but I also think that we should keep them in perspective to our individual situations.

I recently received an "Ask Dave" question from one of our "Smart Parts" Readers that I would like to share. I have also consulted with this particular Parts Manager in the past, so I am familiar with his unique situation as well as his Inventory Analysis.

This may shed some light to what I believe is how we should  use these industry guidelines, but with respect to the "individuality" of each dealer. 

The question and response are as follows:

Question:

"Dave, you know my inventory pretty well by now, but even though my First Time Off Shelf Fill Rate is doing very well and my Over Twelve Months Inventory is virtually non existent, My Gross and True Turns are still below my goals of 7.0 and 4.0 respectively. My current averages are approximately 6.0 and 3.0 for 2012 and my Stock Order Performance remains below 40%! Am I missing something here?"

Response:

Actually, all the facts that you state make perfect sense...let me explain...

.

First of all, the key thing that you stated was that your "Over Twelve Month" inventory is pretty much non existent. This combined with your lower than desired Gross and True Turns, low Stock  Order Performance can only mean one thing. 


You are overstocked with your most common  items which is really not a bad thing because you are on a  "Weekly Stock Order" as opposed  to a "Daily Stock Order" as many other dealers are on. This also allows you to take advantage of your factory promotions in order to gain additional discounts and allowances.

This is kind of a "double edged" sword because on one hand, you are taking great advantage of factory promotions, gaining those extra discounts and allowances. On the other hand, you are overstocking your inventory, even though, overall it's not hurting your investment as these items  have an activity cycle less than twelve months. 


In your case, you have "earned" the ability to overstock your inventory to gain additional profit without sacrificing the "liquidity" of the investment, which will always bring your dealer a great return on his or her investment.

You can slowly manage the increase of your Gross and True Turns as well as your Stock Order Performance by systematically cutting back on your Days Supply of those "fast moving" items in order to get these numbers up. 


Keep in mind that you are on a Weekly Stock Order and you  may incur "stock out" situations. The main reason that your Stock Order Performance is lower than expectation is because you have more than an ample supply on hand, thus requiring less stock order replenishment.

Lastly, if I were in your shoes, with the fact that you are on a Weekly Stock Order Program, I would make my OWN Guidelines on where YOU should target Stock Order Performance  as well as Gross and True Turns. Your overall investment is solid and "liquid" as long as you  maintain a "zero" tolerance policy on over twelve month obsolescence.

In your case, I am reminded of the "old days" when the Guideline for "Gross Turns" was 6.0 turns per year and the "True Turns"  Guideline was 3.0!...and the reason was?...Back then, most of us were on a Weekly or Bi-Monthly Stock Order as in your case at your dealership today! 


Most of these "Guidelines" were increased over time as more and more manufacturers' began overnight "Dedicated Delivery" which is not an option for you.

Keep up the great work, I know most dealers would LOVE to have those "First Time Off Shelf Fill Rate" numbers AND a solid "Return On Investment"!!! 

             

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only "Results Based" High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"Shrinking Parts Gross?...Who's To Blame?"

I recently "polled" quite a few Parts Managers as well as some Dealer Principle on what their main concerns in the Parts Industry are today and I received an over-whelming response to their concerns.

Not only are they concerned about their parts gross retention, they are mostly concerned with their "total" parts gross profit in all areas.

If you think about it, almost every area of parts gross profit has been impacted or "hit hard" over the past 10 years or so and not positively I might add. Let's take a look at some of the areas that I'm referring to.

Wholesale parts sales and gross has diminished heavily as more and more parts managers "opt out" due to low gross retention, high acquisition and holding costs, reduced return allowances from the manufacturer and even auto insurance companies taking control of parts distribution and pricing.

In many cases, it has become an accounting nightmare as well, chasing down past due accounts, excessive parts returns and often times, damaged parts that cause even more administration costs and deferred credits.

The second area to me, that has actually been hit the hardest is the evolution of manufacturers' getting into the "Quick Service" business. The higher demand for customer convenience has actually driven down parts and service sales per repair order nationwide which to me, has becomes a "double-edged" sword.


Even though I truly believe that we need to provide the best in customer service by offering "Quick Service" options as well as to remain competitive with aftermarket facilities, there is a right way and a wrong way to implement this "Quick Service" option.

In many recent studies, including those done by the National Transportation Safety Board, upwards to 15% of all traffic accidents are due to mechanical failure from normal "wear and tear" parts or lack of proper maintenance.

Another recent study by the National Automobile Association (NADA) in their 2011 "State of the Industry" Report revealed that since 2000, New Vehicle Registration fell 28.0% while Total Vehicles in Operation increased by 16.8%. This illustrates to me that the average age of total vehicles in operation is most likely ten years or older. 

With that said, it brings me back to the right way and wrong way that we should be offering "Quick Service" in the first place. It seems that the "Parts Sales Mix" has drastically shifted to "Competitive Parts Sales" versus Maintenance and Repair Parts Sales.

Oil filters, air filters, cabin air filters, tires, wiper blades, etc. are leading the way on parts sales in the "Express Service" side of things, all of which are low gross items and have to be sold in volume to make any impact in overall parts gross.

This added to the fact that manufacturers are reducing maintenance requirements more and more each model year. Warranty repairs have also reduced over the past few years as new vehicle quality has improved, thus resulting in another overall parts gross reduction.

What are we missing here? Well for one thing, the manufacturers are happy because the're keeping their projected maintenance costs down, but are we so focused on "getting them in and getting them out" that we are missing basic inspection items on these "older, out of warranty" vehicles?

Could we be actually contributing to that 15% of these automobile accidents that are caused by mechanical failure or lack of proper maintenance because we fail to perform a proper inspection?

Some of the most common causes of these accidents in the study on mechanical failures were; brake failure, worn steering linkage, tire issues, worn ball joints and wheel bearing failure just to name few.

I also realize that various manufacturers' maintenance guidelines are minimal and may contradict many dealer maintenance guidelines, but ultimately, the servicing dealer is responsible for the doing what's right for their customers, whether their vehicle is under factory warranty or not.

We should never take the Courtesy Inspection Process lightly, even though the customer may be in a hurry to leave.

All of the above have impacted the parts department's sales and gross heavily. Fewer wholesale opportunities, fewer warranty repairs and a "Parts Sales Mix" that is shifting to lower parts gross and retention. Even "over-the-counter" sales are becoming more competitive as customers are "price shopping" more than ever.

With the majority of parts sales in most dealerships coming from the Service Department, the "right way" to provide excellent service and maximize our parts opportunities is to get back to basics.

If we do have to have an "Express Lane", we need to provide the same service as our main service drive with quality service advisors, technicians and equipment to perform the necessary maintenance and repairs.

 We CAN provide the convenience AND reduce the sense of urgency on getting the customer "in and out". In my opinion, we should never sacrifice quality for quantity, we just need a better plan.

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM. The only Results Based High Return Training, Coaching, and Consulting company in the world!  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

"And Like a Good Neighbor?"...One Parts Blogger's Opinion

Like many of you, I have recently been reading a lot of blogs and articles concerning the recent implementation of the State Farm Parts Trader Pilot Program. It has obviously created quite a stir in both the Collision Center service industry as well as for parts providers.

The State Farm Parts Trader Program is already in the pilot stages in a few markets in the United States in many Collision Centers. Many automotive dealer's parts managers have already dropped out of the program for obvious reasons. 


I’m not going to comment on the particulars of the program as many prominent industry “bloggers” and writers have done so well in getting the message out, but I have done my research and here’s “One Parts Blogger’s Opinion”.

Many of you may or may not know that I do a fair bit of travel throughout the United States and Canada, providing Service & Parts Training in automotive dealerships. When I started reading and researching the State Farm Parts Trader Program, it drew my attention quickly as this program has a lot of similarities to the collision industry in a couple of Provinces in Canada.

In these Canadian Provinces, the automobile insurers control the purchase, sale and distribution of collision parts to the collision centers, all the way to the eventual repair of the customers’ vehicle. 


As in the State Farm Parts Trader Program, collision parts are put up for bid for parts suppliers and the winning bidder becomes the area’s OEM parts supplier.

Even though the intentions of their program are similar to what State Farm is claiming to achieve, many of these concerns paint a different picture and goes beyond any article or blog that I have read thus far concerning the State Farm Parts Trader Program.

As expected in the concerns I have read, lead times and cycle times increased as well as the administrative time while parts profits decreased. 


What I did not consider is how these changes would affect the overall method of doing business in the Collision industry or what it may lead to in the future. It has already changed the automobile collision industry to some degree with our good neighbor to the north.

One of the areas, for the most part that has not been mentioned to my knowledge is the possible changes in the way the insurance claim is written in the first place. 


I personally know quite a few experienced insurance adjusters that are being replaced by lesser experienced, lesser paid adjusters to cut costs. This may also lead to even more supplements, longer cycle times and administration costs.

I believe there is a distinct possibility that we will also see the eventual elimination of the adjuster position as we know it, being replaced by digital imagery for authorization. 


Who knows?...in the near future we might even see collision centers having to perform “tear downs” prior to the initiation of writing the claim in the first place.


I also wonder if this direction in the parts end of the collision industry will eventually include paint and materials as well. To me, it only makes sense to include paint and materials in the overall equation right along with the overall control of the parts warehousing, pricing  and distribution idea.

In conclusion, I think we are definitely heading into a new evolution in the collision industry and it may be here to stay. Fewer Collision Centers, Satellite Repair Facilities, Central Parts Warehousing and Centralized Digital Estimating Centers are just a few of what I see coming in the future. 


The one thing that NEVER changes, but will be highly affected by all this is “Customer Service”. I for one believe that these evolutionary changes will impact the  ability to provide the excellent service to collision centers and ultimately, the consumer.


Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM.  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

Is Your Dealer Management System (D.M.S.) Telling The Truth?

Recently, I was asked by a Service Manager to perform an evaluation of his dealership's Parts Department. He  was very concerned because it appeared to him that they never seem to have the "right parts at the right time" and he was tired of putting his customers in rental cars while they waited for parts to come in the next day.

On top of that, his shop productivity was suffering because of all the technician "down time" going back and forth to the Parts Department, bringing vehicles in and out of the shop or just waiting for the Parts Department to chase down a part.

Unfortunately, I have heard this from MANY Service Managers' around the country and led me to the title of this month's "Smart Parts" article. It all begins with the Parts Manager's "belief system" and just how he or she is  reporting to the Dealer Management System. (D.M.S.)

In this particular dealership's Parts Department Evaluation, I first noticed that ALL D.M.S. parts orders were receipted as STOCK!...No "Customer Orders" reported, No "Emergency Purchases", No "Lost Sales", or as I refer to as "Potential Missed Opportunities".

The only "clue" or variation that I detected was that over 50% of the receipts were "Outside Purchases"! Aha!....a little bit of the actual truth is coming out now! 

In this case, less than HALF of the parts orders are being filled by STOCK, let alone the "Customer Orders" that are being ordered, receipted and classified as STOCK as well. These "Outside Purchases" are receipted differently because the original order was not generated by the D.M.S., they were purchases through other vendors or dealers to fill a potential "Emergency" situation.

Here's where the "Common Sense" of this evaluation is now coming to a head! Does it make sense that ANY Parts Department would have NO Customer Orders, Emergency Purchases or Lost Sales? Better yet, have you seen ANY Parts Department fill over 99% of their orders from STOCK, or at least, that's what this report indicates.

This would mean that over 99% of the time, this Parts Department fills the order from STOCK on the first demand for a 99% "First Time Off Shelf Fill Rate". I guess the old saying is true..."Garbage In, Garbage Out"! Remember, just because the information is on the report, it doesn't necessarily mean the information is true or accurate. 

Many Parts Managers report in this same way because in their minds, that's the way they order ALL their parts to get the best discounts and allowances. They don't realize, or often care about the adverse effects their reporting procedures have on CSI, additional expense, lost productivity and most important, profitability.

On most dealerships, Service Departments' lose at least 15% in shop productivity, not counting the added expense due to these improper reporting practices, which by the way, highly outweigh a little extra parts discount.

Lastly, many of these types of situations are becoming more common because of what I call the "Double Edged Sword" which is the manufacturers' "over night dedicated delivery service".

 It's obviously a good thing because parts are more available with shorter lead times, but the bad thing is that more and more parts managers are stocking less, overriding basic set ups and controls because they don't have to stock it now...they will just order it overnight!

The D.M.S. Parts Monthly Analysis Report can tell us a lot, or expose a lot. Bottom line is that we need to be reporting correctly and honestly in order to have efficient and proper "First Time Off Shelf Fill Rates" and a higher parts "Return on Investment"

Need to know more?....Contact us at www.smartpartstraining.com


Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM.  Dave can be reached at Cell 786-521-1720 or E-mail at dave@smartservicetraining.com Vist our Website at www.smartpartstraining.com

Maximizing Parts In-Coming Phone Calls

Have you ever wondered how many phone calls are coming in to the dealership Parts Department on a daily basis? How many of these calls actually end up in parts sales?

Are we "maximizing" our opportunities by measuring our "Parts Phone Call Closing Ratios?" Lastly, are the Parts Counter people "trained" to sell parts, or are they just "order takers"?

These are just a few of the questions I had to ask myself on a recent dealer visit when the owner asked me to find new ways to increase his overall parts sales and gross. I decided to get "back to basics" on just where we could improve on opportunities that might go unnoticed.

I realized that the biggest opportunity that most dealerships miss in the Parts Department is "In Coming Parts Phone Calls". 

After performing a "Mystery Phone Shop" of the Parts Counter Staff I noticed that not only are the people answering the phone not trained in "how to" answer the phone, but they never asked me for the sale!

I do know that it's not "New News" and  we have all heard the infamous "Parts Hold" scenario, but there is a proper way to answer the phone, even if the in coming caller has to be placed "on hold" for a moment. 

The interesting thing about calls to the Parts Department versus calls coming in to the rest of the dealership is, in most cases, it's the ONLY department that doesn't have a "back up" person like a receptionist to answer these calls when they are busy!

They are EXPECTED to answer the phones, take care of the technician counter, look up parts, prepare estimates and so on.

The problem is that most other people in the dealership seem to think they stand around most of the day and are not being productive, but I can assure you that they have many, many moments during the day when they are expected to multitask.

So where is all of this leading to and what are the answers to the questions asked in the beginning?

First of all, we have to train our staff to answer the phones properly with a Phone Script that includes not only a friendly greeting or how to properly ask a customer if they wouldn't mind being placed "on hold" for a moment, it must contain specific questions that will help to measure the "Sales Closing Ratio" for proper follow up as well as building "Parts Sales Incentives".

Secondly, we already know that most Parts Counter people keep a "note pad" close to where the work, near the phone to write information down when the phone rings, or maybe to write down information from technicians or customers at the counter.

We are simply going to create a "Scripted Note Pad" for the Parts Counter Person that will provide a friendly greeting reminder and specific questions to ask that will give us all the information we need to follow up with customers and measure our "Sales Closing Ratios".

Here are some specific items that should be included in your Parts Counter Person's "Scripted Note Pad":

• Friendly Greeting with Introduction 
• Specific Friendly Greeting for Customers who are put "On Hold"
• "How Can I Help You?"
• Customer Phone Number (for follow up)
• Vehicle Information (Year,Make, Model, Vehicle Identification Number, etc.)
• Part(s) Requested? Y/N
• Parts In Stock? Y/N    If Not, Parts Ordered? Y/N
• Customer Installing Part(s)? Y/N (Possible Call Transfer to Service)
• Price Quoted? Y/N
• Discount Given? Y/N (Offered in Lieu of Losing the Sale) 
• Sold Part(s) Y/N
• If Part(s) Sold, include Invoice Number
• If Part(s) NOT Sold, Give Reason (i.e. cost, availability, estimate, etc.)
• Close The Sale ("Thanks for Calling, My Name Is ___________)

The results of the implementation of this Parts Counter Person "Scripted Note Pad" were astounding! We created a simple excel reporting system to measure the "Closing Ratio" of these in coming calls with the "Scripted Note Pads".

Each Counter Person was required to turn in their "Scripted Note Pads" at the end of  each day for follow up. The Parts Manager reviewed all the "Scripted Note Pads" and actually phoned customers who had elected not to purchase for the reasons noted. Lo and Behold, the Parts Manager was able to "capture" sales that would have gone unrealized!

Customers were AMAZED that the Parts Manager was actually calling them back to follow up, asking why they didn't purchase. One customer in particular called for prices on brake pads and did not purchase because they were "price shopping" and didn't know the difference between the "factory" brake pads versus the lesser expensive economy brake pads.

The customer was actually a Service Customer that owned two vehicles purchased AND serviced at the facility! The Parts Manager actually "sold the service appointment" to the customer and the vehicle was serviced the next day with the "factory" brake pads at the dealership!

I believe that we need to "re-think" our philosophy on parts sold over the phone, or our "over the counter" parts sales. In many cases, I have found that "Counter Retail Sales" have traditionally been a "high gross, low sales" category on the dealers' financial statement.

Are we really "maximizing" our "over the counter" Parts Sales opportunities? Is your Parts Counter Staff  "trained" to sell?

In most dealerships, the "over the counter" retail sales average less that $10,000.00 per month, with an average gross retention of 38% - 42%. With that said, I wondered if we focused MORE on this opportunity and tracked the "Closing Ratios" of these in coming parts calls, even if we did have to give up a little gross percentage.

Would I rather have 40% of $10,000.00 or maybe 30% of $40,000.00? Gross pays the bills, but it seems that we get caught up on the "NORM" with percentages and low counter sales instead of being competitive, training "ALL" our sales staff and retaining our customer base. 

Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM.  Dave can be reached at Cell 786-521-1720 or E-mail at dsp0417@aol.com Vist our Website at www.smartpartstraining.com

  

Dealing With The Cycle Of Change

Over the past few months, I have highlighted articles that were based on "change". I couldn't help myself when I was recently asked to write an article about the "state of the union" so to speak concerning not only the Parts side of our business, but our industry in general. 


This was an exciting task because when you think about it...the more our industry changes, the more it stays the same! This "Cycle of Change" is constant and we have to be ready to adapt to these changes just to keep up with the competition, especially in the aftermarket. 


The "state of the union" in our industry has always seemed to revolve around NADA (National Automobile Dealers Association) and they have been a staple on our industry's standards and guidelines. This is where "the more things change, the more they stay the same". The "change" part of this phrase is how NADA is constantly giving us new information to help us with "dealing with the cycle of change". 


The "same" part of the phrase is where their consistent wealth of information along with their many groups of dealers that provide these standards and guidelines. Even though NADA is not sponsoring this particular article, I could not help but pass this information on as a great resource for strategic business planning.


In preparing this article, I decided to go to NADA's most recent "State of the Industry Report" for 2011 and I was amazed how much information was available as I "drilled down" some specifics.


 I have used this information in the past, but I had to stop and think that "years ago" we were not privileged to this much data, graphs and comparisons unless the dealer was an NADA Member, which of course, many are today. Even the average consumer has the same access to this information which has always been a "secret" in the past. 


I started my research for this article and here are some of the facts I found not only about the Parts side of the business, but also some pretty interesting observations about the "dealership as a whole" in their many national comparison reports. The results are compiled from NADA's latest "State of the Industry" Report for 2011, which compiles information through 2010.

• Overall Parts & Labor Sales: Up 5.2% (Due to Warranty & Internal Increases)
• Customer Labor Down: 4.8%
• Number of Dealerships Open with Weekend Hours: 46%
• Average Number of Hours Open for Service:  56
• Dealers with a Collision Center: Down 10% since 2000
• Total Vehicles in Operation in United States: Up 16.4% since 2000
• New Vehicle Registration in United States: Down 28% since 2000
• Newspaper Advertising as a % of Total Dealer Advertising: 2010: 22%  2000: 52%
• Internet Advertising as a % of Total Dealer Advertising: 2010: 23.7%  2000: 4.6%
• T.V. and Direct Mail Advertising: 5% - 6% 2000 - 2010  

NADA also stated in this report...."The recovery from the recession continued at a modest pace in 2010. Dealers continue to compete with independent service outlets for far less frequent periodic service and repairs required on newer, more sophisticated vehicles..."

So what does all this information mean? I know many of you are probably thinking..."So what?....this isn't new information!!" The real question is what are we doing with all this information?


 I know one "bullet point" that sticks out to me is that the "Weekend Service" option is slowly becoming a new standard and if your Service Department is NOT open as many hours as possible on the weekend, you are probably losing business to the aftermarket. 


How about the fact that many dealers are eliminating their Collision Centers?...does the cost of operating the Collision Center outweigh the bottom line? These are all great questions and they are just a few items that are in this report which I could have spent hours researching and planning.

One last one to bring up...New Vehicle Registration is down, but the overall Vehicles in Operation are up! I know that we all know that the average vehicle life span is up, but why aren't we "targeting" more advertising for these "older vehicles" and not just the customers in the first, second and third tiers who may have missed their last service? 


I realize retention is one of the primary issues today, but we need to "enhance" that target and utilize the internet more in our advertising budgets. The internet is less expensive and one of the primary sources of communication and will be for years to come. 

So, based on the NADA information above, how much of your dealership advertising budget is dedicated to the internet? These are just a few "bullet points" on the information that is provided at no cost by NADA at your fingertips.


 I would even go as far as to say that most dealers and managers probably know about the availability of this information, but how many actually use it to build your business plan and most important...how to "Deal With The Cycle of Change".

If you haven't visited the NADA website recently, you need to!...simply go to www.nada.org and go to the "Data" section to look for the "State of the Industry Report 2011" The latest industry standards and guidelines are also readily available at the NADA website. 


Dave Piecuch is the Vice President of Automotive Consultants Group Inc. and is the Head Coach for Smart PartsTM.  Dave can be reached at Cell 786-521-1720 or E-mail at dsp0417@aol.com Vist our Website at www.smartpartstraining.com