Of all the challenges a dealership faces from the outside world, none are as destructive as the everyday battles taking place inside your dealership. Whether it is dissatisfied customers or apathetic employees, in almost all cases, “chaos” is the biggest threat your dealership faces every day.
The reality is that chaos is not the problem, but a byproduct of the problem, just like steam is the byproduct of boiling water. The actual problem could be not communicating expectations to employees, lack of communication to customers or the lack of processes in service, parts or sales. Regardless of the cause, chaos is a disruptive issue and you must work to eliminate it.
The cost of chaos can easily be calculated by running some basic numbers. Let’s start with service. In your shop, chaos shows up in your recovery rate. Anything less than 100% recovery per technician is caused by chaos. Let’s say you have two techs who are recovering at 80%. Most likely, poor processes or poor communication are causing you to lose 20% in your recovery rate. If your labor rate is $80 per hour, you are losing $256 per day in lost labor sales. That would be $1,280 per week, $5,120 per month or $61,440 per year. All because of the demon we call chaos.
In the parts department, examine your transaction time as well as your missing parts inventory to see the real cost of chaos. For instance, if the fastest moving parts are not within a few steps of the parts counter, your transaction time will be higher than it should be. The higher your transaction time, the more parts people you need. And, the more parts people you have, the less profit you make. Again, poor processes in parts adds staffing demands and reduces your profitability as a dealership.
If a sales person is not organized or if you don’t have defined sales processes, you will be paying for leads or the time spent creating sales quotes that are never followed up on. Sales that should happen, don’t. The real cost to your dealership is in lost sales opportunities and a higher customer acquisition cost for your marketing. All because of the chaos that is running through your sales department.
Lack of communication and lack of processes are the top causes of chaos for employees. While it may be hard to believe now, every employee you hired in the beginning was motivated and excited to be a part of your team. If they are not as motivated today, it’s the chaos that you have allowed to build up that’s pulled the joy out of their work. It’s turned a highly motivated employee into one that is apathetic to you, your dealership and your customers.
“Chaos is not the problem, but a byproduct of the problem…”
I want you to understand that communication is not about talking to your people more, but about communicating your expectations for them. It’s nice to walk by the parts counter and say, “You are all doing a great job!” However, it’s more important to walk by and say, “You are all doing a great job. Is there anything we can do to make your job easier or to help the customer have a better experience?” Then, listen to what they say.
Sure, some will say “Pay us more money and let us work less hours!” However, most of the time you will get good feedback on how to improve your parts processes and improve how the customer feels about their parts experience. Every time you improve the process at the parts counter, you reduce chaos and improve the experiences of your employees and customers.
Every step to improve service processes makes you more money and gives your service customers a better experience with your store. If you are the service manager, talk with your techs each day about ways they believe your service process can be improved. Tie performance bonuses to process improvement so that your techs are rewarded for both improving and staying true to the processes you are building in your department.
Will chaos ever be completely eliminated in your dealership? Probably not. However, by communicating with employees and involving them in process improvements, you will begin to see less chaos and more profit going to your bottom line, and that is what business is all about.