I have always found the transition from December to January to be interesting; two very different months offering unique contrasts for the retail automotive marketplace.
December offers a chance to make our final push to the goal, time to plan and strategize for the coming year, and time to reflect on the year that is ending.
January, on the other hand, is full of promise being a new year, and the first chance to set the pace. They are kind of definitive in their nature, one an ending and one a beginning.
Football is built around these two months with teams bringing themselves to a fighting climax in December; while in January, the survivors hit the ground running as it offers hope for the Super Bowl of achievement.
Recently, I attended the Digital Dealer conference and shortly after, Auto Remarketing’s Used Car Week —two unique conferences offering different perspectives on ways to improve our retail and wholesale sales, offering tools and information to help dealers achieve better results.
Like December and January, they are very different conferences.
Digital Dealer focuses on all things digital, like CRM, digital marketing, online tools, auto auctions and much more. Meanwhile, Used Car Week, as you probably know, focuses on certified pre-owned current trends and best practices, remarketing information, trends, strategies and more.
Both are fantastic conferences to attend and a must-attend on my list each year.
One auction segment that was noticeable at Digital Dealer was dealer-to-dealer auctions and trading networks.
Auctions like Auto Flipr, DealersLink and Dealers Forum, have in the past been localized and fairly small in vehicle offerings; that is quickly changing.
At Digital Dealer, I had a chance to look closer at Dealer Match and their recent entry into this auction segment.
Dealer Match offers a large searchable selection of vehicles and a 100-percent no-questions-asked buyback guarantee. And like other dealer-to-dealer auction sites, they offer a lower cost of purchase by offering a monthly subscription fee instead of the higher cost of a per-unit buy fee normally associated with traditional auctions.
The Dealer Match inventory is certainly an auction to look into in 2013. Another major player in this market is DealersLink, which offers a rapidly expanding inventory and a wide array of tools, including inventory management and search reports. It is a nicely designed site that is easy to navigate.
Another up and coming auction to check out is Dealers Forum. Their recent expansion into Arizona and soon Texas offers a good inventory mix. Dealers Forum offers a credible dealer rating system, and fast direct access for buyers and sellers to communicate via text though the website.
These Dealer to Dealer auction sites, and others in the marketplace, are definitely viable sources to consider adding as part of your auction channel selection for the new year.
Other useful planning and strategy information came from Used Car Week. A hot topic was the continued increase in sales of certified pre-owned vehicle sales — or “Certain Profit Opportunity” vehicles as I think of them — with new program enhancements and marketing from companies like Ford, Honda, General Motors, Volkswagen and others.
Rick Wainschel from AutoTrader.com offered valuable new survey and analytic information for any dealer, general manager or general sales manager looking to improve their CPO sales.
The information he and others provided would be crucial in planning and communicating to sales and management teams the current desire of customers wants and needs in CPO.
For example, New-vehicle customers are 62 percent more likely to purchase a CPO vehicle. Do your salespeople know it and show it?
New-vehicle customers and previous CPO customers are 67 percent to 69 percent more likely to pay a premium price when purchasing a CPO vehicle. Does your sales strategy incorporate this information?
I look forward to downloading more of what I saw and learned at Digital Dealer and Used Car Week over the next few columns.
While I don't know who will win Super Bowl XLVII, I do know every team will be executing the plans they have prepared and doing the best to achieve the critical results needed to win.
If those teams were automobile dealers like us, they would be seriously evaluating ways to find additional sources of high-turn inventory; inventory that has been already reconditioned like vehicles you would find on dealer-to-dealer auctions.
Like the great warriors of the gridiron, every strategy and tool must be considered when it comes to our new year of the automobile business. As for the Super Bowl, I am betting Atlanta! Till next month, see you in the lens of the lanes.
Auto dealers need to provide training for their detailers not only to improve skills, but also to make them feel needed.
One of the most constant issues for dealers with their detail departments is high employee turnover, which tends to be very costly. The value of training cannot be overemphasized if dealers are to expect any improvement.
Maximize Training — Minimize Costs
If you operate an in-house detail department and have experienced high employee turnover, you need to get the most value from your investment in training.
Find a ‘Hands-On’ Course in Detailing
Training experts working with the latest technologies say there is nothing better than “hands-on” training. If it does nothing else, it provides some assurance that the person who is supposed to be getting the training, actually gets it.
And, because detailing topics generally spark questions or side issues, having an instructor around to answer them is always a benefit.
Use Ancillary Materials: CD’s, Videos, Web-Based Programs and Books to Augment Training.
However, much of what is learned in a classroom is quickly forgotten. Therefore, having collateral materials is an important part of detail education at any level.
Moreover, these specialized materials can expand your detailer’s knowledge, covering ground maybe missed in a basic training seminar course. Of course, you have to be certain they are used.
Tap the Detailing Community for Information.
If you have a problem, chances are another dealer out there knows how to solve it and is willing to share that information with you. You can also get this from your chemical supplier, and even online from the many detail Internet forums.
Questions of Labor and Environment Shape Training
The labor base is getting … baser. The demand for training needs to be addressed at both ends of the spectrum —that is, to give both the experienced detailer the opportunity to grow and to provide the novice with “need-to-know” material.
One key issue in training is to simplify information for newcomers to detailing, which will benefit the dealer in the end.
You need to attract good people who want to work in the detailing department. And, they need a good understanding of the principles of detailing; to know the basic terminology and the basic chemicals.
But there is a lot of material being taught that's not necessary for them to know, which will puzzle a novice. If anything, the training that is available is inadequate. Courses need to involve a little chemistry, so detailers understand what they are using. Other issues that need to be stressed are safety and environmental responsibility. The need to have MSDS sheets on all chemicals, and know what they mean.
Then, there is the issue of wastewater. You need to know that this water cannot, by law, go into the storm drains or on to the ground. It is a violation of the Federal Clean Water Act and punishable by huge fines and clean up costs.
Adequate Pay Reduces Turnover
Hire the best people (not “experienced detailers”), train them properly and pay them what they are worth. If you pay people minimum wage, then you will have high turnover. In short, “high turnover” is euphemistic for "underpaid.”
Specialized Training
At the other end of the spectrum is specialized training. At present, there is no real specialty training available in the detailing industry. But you could hitch-hike on specialty training in other industries: collision repair, trim and restyling, carpet cleaning, janitorial. All these industries, through their associations and suppliers, offer phenomenal training resources for specialty training.
It is becoming clear that detailers need more opportunities to learn. For example, mold is a huge issue in all areas of cleaning and detailers “need to go there.” Mold spores have always been present, but all kinds of things have been blamed as allergens. But experts are realizing that mold may have been responsible for illnesses in many cases.
Odor is another, yet the typical answer to odor is a fragrance to mask it when there is so much more to know. Even steam removing is a science involving chemicals, tools and methodology.
Look for Training Opportunities
There are many sources for training. The Internet has opened such a huge window of opportunity for information that no detailer has an excuse to not have the knowledge they need. It is out there.
For some resistant to research, there are videos and manuals available to purchase that give the detailer ready-to-use information. Our company, DETAIL PLUS Car Appearance Systems (www.detailplus.com) offers training videos, manuals and on-site training for the experienced or new detailer.
These materials can be used to develop your own in-house training program, or used to train and improve new or existing detailers.
Many detail industry suppliers offer technical articles on their websites. The idea is to empower customers. Your detailers have no excuse for not using these resources if you expose them to the information.
They might say that they do not have a computer or Internet, but that is a feeble excuse. Today, everyone has a computer and Internet connection, which is becoming as common as a TV or cell phone.
Personally, I believe in the ultimate importance of education and training to ensure long-term success for the detail industry. At DETAIL PLUS, we believe that those who seek to educate themselves are the ones with sufficient vision to thrive in today's competitive market. That is why, as a company, we are out there to provide all the information we can. We do not necessarily seek a profit for our efforts in furthering industry education. Instead, we try to play the role of a coordinator by making viable education available to everyone. We see industry trade journals and Internet forums very important to the dealer.
However, the ultimate guidance and counseling are best provided by your detail chemical supplier who is in daily contact with your dealership. If they do not provide you with this education, you should demand it, or buy elsewhere.
It is said that compressing training into one or two periods tends to limit retention; up to two-thirds of the information can be forgotten, with 66 percent lost within 20 seconds of transmission. Therefore, manuals, videos and multimedia resources must be used as tools to refresh the memory.
Dealers must absolutely demand that their suppliers expand their offerings of these training materials, especially very specialized training information. If you do, suppliers should respond or lose your business.
Summary
In short, take advantage of existing opportunities to refresh or augment the basic detail training of your staff. Expand their knowledge of useful information, and make them explore specialized areas of technology. You need to be on the lookout for new sources of information and to communicate about detailing with your peers to see what they are doing to improve the area.
If I can help, contact me at buda@detailplus.com
I spoke with a friend recently who was driving around from dealership to dealership just looking for vehicles to purchase for his store.
Now, he is a pretty sharp used-car buyer, and I know he does not like to waste his time.
So you and I might be asking, “Why is he driving around from dealership to dealership?”
He, like many of us, is in real need of inventory. And like some of us, he is just frustrated enough to try the door-to-door car-buying approach.
It still amazes me even today, 20 or so years later, what a significant impact the Internet has had on the retail automotive industry.
And yet even after that amount of time, programmers and developers are just beginning to come up with more tools that allow us to find more customers, sell more vehicles and improve the ability to search and find the vehicles we all need — consumers and wholesalers alike.
But if Google can search the earth, and Apple can find you or any of your friends out there, why isn't there something that will allow all of us to find the vehicles we need more simply?
You can’t afford to randomly search anymore. When you spend time driving around or unintentionally walking around, somewhere you are missing buying opportunities.
For me, this thought was the catalyst to figuring out how much more effective I could be by investing my time in purchasing online as opposed to only going to one physical auction.
The auctions are constantly improving search tools, allowing you to refine details for more exact inventory matches. This includes partnering with companies like FirstLook and vAuto, and online purchasing tools like Auction Genius.
It should be easier than ever before to purchase inventory, but it isn't. If anything, it seems harder, which is largely due to a shortage of available inventory from the past few years.
In addition, it is a more common practice these days for people to sell potential trade-ins themselves through Craigslist. At this point, you might be wondering where I am going with this. It's OK, I am, too.
There is a way to find inventory! You can get there without driving, going right to where the inventory is waiting.
After you are done power searching on Manheim/OVE.com, ADESA OpenLane, etc., try this: go to Google; then go to advanced search.
From here, you can search specifically for the vehicles you are after, and even see specific sites you might find them on, like Craigslist. Yes, I know these are retail sites and not wholesale dealer sites.
To that I say: think about it; you are looking for good, clean cars to buy. Not every seller on Craigslist or any other site really wants to go through the painstaking process to sell their own car.
They often just try to see if it will sell before they go shopping, usually without much success. And you have the cash to offer them!
I know this is not the easy way to purchase our inventory, but when you need inventory and you can't find it, this isn't that much work compared to walking the auction yard or driving around to dealerships.
Speaking of dealerships, I just found three vehicles my friend could use not far from where he is with one Google search. So, I think I'll give him a call.
For now I hope this might help with your inventory search needs. Until next month, see you in the lens of the lanes.
This article is for those auto dealers who recognize they have problems in the operation of their in-house detail department and want to do something about it.
Without a doubt, some dealers do have problems in the operation of their detail departments, serious problems. All one has to do is look at the entire dealership and then look at the condition of the detail department: an embarrassing, disorganized mess. This is astriking contrast to the other departments that are clean, organized, well run and staffed with well groomed, efficient personnel.
Why is this? Read on.
Seeing the Problem but Doing Nothing About It
Auto dealers are not unique among businessmen who see problems in their businesses but do nothing to change them. For a number of reasons business owners recognize problems, but they simply live with them.
This article will present some thoughts on why dealers have problems in the operation of their in-house detail department. But, why they don’t do anything to correct the problems will be left to you to answer. After all, it is your problem, isn’t it?
A Faulty Paradigm
To begin, most dealer principals and everyone else in the dealership hold a faulty paradigm about the detailing service. In short, the detailing department is the “stepchild” of the dealership. It is there; it is needed; but it is largely ignored and disrespected. Why else would it look like it does in an otherwise organized and pristine looking dealership?
So, if you want to eliminate the problems in the detail department, you must view it as an important and critical part of the dealership. This means insuring that the proper management time is devoted to it; that it has the latest and best technology; that it is supervised by a competent manager (not detailer); and finally, that it isstaffed by well-trained competent employees (not typical detailers).
Bad Management or Lack Thereof
Ask any business owner the most important aspect of their business, and they will tell you its people. A dealership is no different. It is top sales people that sell the cars, well-trained technicians that service them, and it is highly skilled managers that supervise these people.
Unfortunately, the detail department in most dealerships has none of these.
If the dealer principal hired someone to oversee the department, like a service manager, or used-car manager, they really don’t want the job in the first place and do very little to manage it effectively, if at all. They do not see the detail department as a part of their responsibility and even if it were, “who wants the responsibility of that pig pen?”
Then there is the detail shop manager, typically a detailer who has had no formal training in the “art of detailing” and certainly, little or no training in people management, production, quality control, profit and loss or the other critical skills a department manager/supervisor should possess. They prefer to have their face in the side of a car, detailing, certainly not managing anything.
Staffed by Typical Detailers
In over 30 years in the detail business, as the owner of two detail centers, I can say without reservation that detailers are “typical” and are not the type of personnel anyone should hire. In fact, as I have pointedly asked dealers themselves, “Would you hire this type of person for a position anywhere else in the dealership?”
The usual answer is “no!” So why hire them for the detail department?
Most would say, experience, but the problem is that their experience is only good if you let them do what they want. In other words, each and every detailer in your dealership will be in control of what they do and how they do it. Is it any wonder there are problems when the inmates are running the asylum?
This situation was what caused one dealer to say to me, “I’ve been a slave to my detail department for years.”
Selective Hiring & Training
If you are going to overcome this people problem, you have to set hiring standards. And once you have a staff of competent people with potential, have them trained in the skills they need to be journeymen detailers.
Primitive Technology & Lack of Organization
What you see in most dealership detail departments is the most primitive technology one can find in any auto service business. It is this technology that results in the disorganization, inefficiency and mess in most shops.
It stands to reason if the dealer doesn’t really care about the detail department , they certainly aren’t going to invest any money in modern technology and equipment. Even if they do care they don’t have any knowledge of the type of equipment that might be needed on where to purchase it.
They certainly cannot ask the detailer; they know less than the dealer. They are the ones still using the primitive technology; they know nothing else.
The biggest culprit in a detail shop is the method of dispensing and using chemicals in squeeze and spray bottles. Check out any shop, there are hundreds of bottles lying around here and there, unmarked and often uncapped.
Not only is this an OSHA violation, it results in chemical waste, theft and chemical misuse, which can result in an expensive mistake on a high-end vehicle.
How are carpets and upholstery cleaned in most shops? They are cleaned with a bucket of shampoo and a nylon scrub brush. The result: inadequate cleaning, wet carpets and upholstery and moldy smells. Vacuuming is done with a $50 shop vacuum.
Some dealers do purchase soil extractors, but one unit for a shop with three or more bays will cause nothing but inefficiency and distraction because the detailers are always “waiting for the extractor.” Then, they are standing around being paid for doing no work.
An extractor is only one part of the carpet and upholstery cleaning process. Also needed are pneumatic friction shampooers and hand scrub brushes to be used in conjunction with the extractor, as well as proper chemicals. Many detailers use engine degreaser to clean carpets.
Then there is the paint. Few detailers know the difference between single stage and clear coat/base coat paint finishes. They don’t know how to identify paint finish problems, and they don’t know the proper tool, pads or chemicals to use to correct the problems. This results in swirls in the paint finish.
The typical paint finishing tools are the archaic 10-pound electric buffer and wool cutting pad which are great for the lacquer paint finishes of the 40s and 50s.
The discussion could go on, but to not belabor the point, suffice it to say that few in a dealership are aware of the new, advanced technology and methods that are available to upgrade a detailing operation that will keep a shop organized, efficient, turning out quality work in a reasonable time frame.
This article probably raised more questions than answered. And, it might be a bit harsh in tone, but that is intentional. As an advocate for the professional detailing industry, I have a passion to see this industry grow and prosper. And, because dealers are so critical to the growth of the industry, I challenge you to look seriously at this problem-child in your dealership and realize that you can solve the problems and create a professional appearance department in your dealership, but you have to see and care.
Low hiring standards in most dealerships remains a cause for problems they experience in their detail departments.
Almost every dealer I consult with says the same thing about employee problems in the detail department: “It just isn’t realistic for us to have hiring standards for detail shop employees. Detailers are all the same, they are transient, so we take whoever walks in the door when we need them.”
Unfortunately, too many dealers have long followed this same philosophy in their hiring practices for the detail department. Well, I am here to tell you that if you keep following these same hiring methods, you will continue to shoot yourself in the foot and end up with a permanent limp.
The Great Depression
When the Great Depression hit this country with tornado-like force in the 1930s, many major companies slashed their advertising budgets. Some even stopped advertising altogether. On the surface, this seemed the most logical business decision considering the state of the economy.
There were two notable exceptions to this common practice, the Campbell Soup Co. and Procter and Gamble. They continued advertising and were even the sponsors of the first radio programs.
So what has all this history got to do with hiring detail employees?
Without a doubt, everyone today knows these companies. Their names are household words, and they are two of the largest advertisers in the U.S. Why? They raised the bar in spite of the tough times.
Neither company lowered the bar, so to speak. Yes, they made adjustments while maintaining a high level of performance. That is what I want to tell you, don’t accept as fact that there are not good people to hire in your detail department, or that you have to take what is out there.
This reactionary mindset will continue to undermine any improvements you want to make in your detailing department.
Remember, keep doing what you’ve always done and you’ll get what you’ve always gotten.
Good Employees Produce Profits
You have all heard the cliché so many times it might become meaningless to you. Let’s put it another way: Would you purchase second rate or out-of-date equipment for your service department or bodyshop? When you build a new dealership facility, is it designed to look worse than the competition? Of course not, you try to have the best.
Then why is it OK to hire second rate people for your detail department? Why is it OK to have second rate primitive equipment, and worse, little to no management or operational standards for the detail department?
If you settle for second best, you get second best. Almost every dealership I have visited has a second best detail department.
If you want something better from your detail department, you must first expect more. People who expect more, get more.
We’re as Good as Anyone
So, you might counter, “Our detail staff is just as good as any other dealership.” And that’s fine, if you want to get by as you always have. But is that really what you want?
Wouldn’t you like to have a clean, organized detail department, manned by reliable and dependable employees, who turn out quality work quickly and profitably? Of course you would! But you must set some standards for this problem child — the detail department.
If you don’t know what these standards should be, then get help. There are many industry consultants who can assist you.
Note that I said consultants and not detail chemical companies.
How to be Better Than the Others
One of the best ways to have a detail operation that is better than other dealers is to do a better job of hiring and managing than they do. It’s also better to have the right equipment that saves time and reduces labor.
The single best predictor of a company’s overall excellence is its ability to attract, motivate and retain the best people. You do this in your sales and service departments, so why not the detail department?
More Objections
If I had a dollar for each of the objections I get from dealers about hiring better employees in their detail departments, I could retire.
A common excuse is, “I let my general manager run the dealership and they aren’t convinced that it’s worth it.” Or, “I don’t have anyone willing to manage the detail department. The service manager doesn’t want it, and the body shop manager has got his hands full.” Or, better yet, “The department could not justify the salary a good shop manager would require.”
You, as the dealer principle or GM, must realize that when someone won’t do what you ask it is because they don’t understand what is in it for them.
Yes, you are the owner and you can command them, but you and I both know that no one does anything they don’t want to. They will pretend to cooperate, but as is usually the case in most dealerships, they do a sloppy job of it. Just look at your detail department.
What this illustrates is two things:
1. This type of behavior is typical.
2. If you want someone to do something new, you had better take the time to explain what they have to gain.
It is no longer acceptable to say, because I said so. It is futile, and in the end, the inmates end up running the institution.
Conclusion
So, if you want better employees in your detail department you need to get the managers in your dealership to buy into this positive philosophy. If they don’t see that better employees will be better for them, their department and the dealership, then nothing will change.
Detail shops are not profitable because of employee turnover, which also erodes morale. There is also a strong correlation between employee retention and customer retention. Think about it, what will happen if you keep hiring second best people in your detail department?
The greatest cause of employee turnover is not low unemployment or downsizing, it is plain and simple hiring mistakes. And how many hiring mistakes have been made in your detail department?
Most dealerships continue to employ the unemployable and try to train the un-trainable.
The process used by most dealerships when hiring detail employees is to hire experienced detailers. One of their standard interview questions includes, “Which two days of the week begin with T?” If the interviewee answers “today and tomorrow,” the dealership hires them.
In most dealerships, the detail manager usually hires employees for the department. In most cases, this person is not much of a manager. Instead, he is usually the best detailer. They might know how to detail, but most do not have a clue how to manage employees, let alone interview and hire proper personnel.
Even if the service fixed operations manager does the hiring, do they know what they are looking for in a detailer? Usually, all they are looking for is a warm body. After all, it is just the detail department. If the owner does the hiring, what criteria does he use in determining who to hire? Normally, all they are looking for is someone who knows how to detail.
Employing the “Unemployables”
The typical detailers that are hired are most often “unemployables.” They work in detailing because that is the only place that will hire them. They might get hired working at a carwash or get a job washing dishes, but even today’s modern carwashes won’t hire the typical detailer because they tend to be transients, with all types of social problems and a jaded work history.
Let me ask dealers this question: Would you hire the people in your detail department to work in your dealership? Most dealers or general managers that I ask say no. My question is, why hire them in your detail department? Look at all the reasons you would not hire these people to work in the dealership. These reasons are why you have problems in the detail department.
In my experience operating retail detail centers and consulting for dealers, the typical detailer comes with so much baggage that no company will hire them, except organizations that do not have high standards. Is that you?
If you established a few simple standards before hiring detail employees, such as a valid driver’s license, a good driving record, prior job references, a high school diploma and drug testing, you would find that most of them could not even meet the aforementioned criteria. In fact, if these conditions are presented in an advertisement, most will not even apply for the job.
If you keep hiring these “experienced detailers”, you will continue to have the problems you have always had. You will never move beyond where your detail department is now. There is no opportunity for growth with these types of people. In fact, you are lucky if the typical detail employee will stay with you for more than a few months.
Training the Un-trainable
Many readers might be saying, “You are wrong, I have a couple of really good, hard working men that have been with me for years.”
Yes, that can be true in many cases. Many dealership detail departments have a few good employees. You want to get these employees to grow and improve, get work done faster with better quality and produce more cars per day, right?
Then, you hire a detail-training consultant to provide an advanced detail-training program for these good employees.
The problem is, unless the trainer tells the detailers what they want to hear, they resist everything he tries to teach them. Most do not want to change anything. They want to keep using the same chemicals, following the same procedures and using the same equipment. They fear change. They resist it, and in most cases, go right back to what they were doing after the trainer leaves.
If you think that bringing someone in to train your existing detail staff for improvement will work, think again. They will not change, unless you threaten them by holding a 2 x 4 over their heads. That might not even work; they might just quit.
What Do You Do?
The obvious answer is that you should not hire detailers or anyone with detail experience. If you do, you will have an unemployable, un-trainable employee who will be in control of your detail operation.
Hire people with good values, and you can teach them the detailing skills they need. Like a great coach once said, “There is only one way to have a successful team: First, you must get discipline; then teach fundamentals; then you can teach them anything.”
And that is what you must do with your detailing department. You must have employable and trainable people who will respond to discipline. Then you teach them the techniques they need to know about detailing. Finally, you will have a productive team player and employee.
Completely inexperienced individuals can be taught to detail vehicles in no more than three days, and they will know more and do better work than the typical experienced detailer.
We have proven this all over the world with the employees that we have trained. Those who know nothing but have a willingness to learn can learn. Those with prior experience always want to revert to what they think they know.
If a dealership can justify establishing a full-line body and paint shop, why not a full-service detailing department?
You have probably never even considered this question. You probably look at detailing as a necessary evil just because it is needed to sell used-cars.
And in the last few years, detailing has become an even more critical aspect for profitable used-car sales. With auto manufacturers offering extended warranties on many late-model used-cars, quality detailing is a must.
So, your in-house detail department must perform the best work possible. Unfortunately, this is usually not the case with most dealerships.
Growing Retail Market
In addition to the dealer's in-house need for detailing and other cosmetic car care services, there is also growing demand for detailing and cosmetic car care services from retail customers.
Consider that in 1980, there were 4,000 detail shops listed in the USA Yellow Pages. Today, that number is approaching 15,000. Furthermore, more than 80 percent of the carwashes in the U.S. offer some type of detailing service. According to a report, more than 11 percent of the 5,000 Quick Lubes in the country offer detailing, and more than 55,000 body shops provide some form of detail¬ing service to the public.
Finally, many auto dealers have recognized the consumer demand for detailing and are selling detail services to their customers.
Unlimited Potential & Profitable Business for a Dealer
So, you have an in-house need for detailing and cosmetic car care services, and your customers have a need for the services, the question is: "Why aren’t you offering detail services to the public?"
Why do some dealers operate a body shop? It is used for their in-house needs but more so because body and paintwork are in-demand services by motorists and profitable.
Ask yourself this question and then honestly answer it: “Why don't you set up a full-service detailing department in your dealership?”
If you want help with your answer, do not hesitate to call me, because I believe that if every dealership set up an in-house detail department, dealerships would enjoy profits beyond their wildest expectations.
The Full-Service Appearance Depart¬ment
What I am talking about is a department that can provide every cosmetic service that a dealer now requires for their used-cars.
Then think of the public! They also need detailing as well as many of the other cosmetic car care services you need.
What services would a full-service appearance department provide?
• Complete Auto Detailing
• Rock Chip/Scratch Paint Touch-up
• Windshield Rock Chip/Crack Repair
• Gold Plating of Emblems
• Vinyl/Leather Repair & Dying
• Dashboard Repair & Dying
• Pin Striping
• Door-Edge Guard
• Window Tinting
• Carpet Plugging & Dying
• Paintless Dent Repair
These are services that can be performed by employees you can hire for $10.00 to $12.00 per hour and who can be trained very easily, with the exception of Paintless Dent Repair.
Best of all, you can get any needed training from the company where you purchase the systems.
What is The Cost?
This is always the $64,000 question! In this case, the answer is not as bad as you would expect, assuming that you do not set up a professional detail department with a shop vacuum, electric buffer and a few plastic bottles and rags.
Consider that you might pay an outside shop $85 to $125 for a complete detail, but the public will pay from $150 to $300 for the same service. In fact, the public is far less demanding about the detailing services than you are, and they pay more.
Gold Plating systems will range in price from $1,395 to $2,500. Windshield Repair systems from $300 to $5000; and by the way, the low-cost systems work as well as the high-dollar systems. Paint touch-up systems can range in price from as low as $500 to $600 or $5,000 to more than $10,000, depend¬ing on the system. Window tinting, pin striping, vinyl and leather repair, along with other similar services, require an investment in the product for the most part but very little expensive equipment.
Your biggest investment in a full-service detail department is your commitment in time and effort, and finally, in the quality of people you hire. To make this a successful venture you must hire the same quality people you hire for other areas of your dealership.
How Much Revenue Can You Generate?
Total revenue generated is dependent on how much work you currently send to the outside, which then would become in-house work with the adoption of an in-house detailing department
From the retail side, it is my experience from operating freestanding detail shops that you can generate at least $20,000 to $30,000 per month in detailing services alone. If you add the other cosmetic car care services there is no reason this number could not easily reach $50,000 or more.
Keep in mind that a free-standing detail operation, like a body shop, has to promote, advertise and work to get people in the door, but you already have them in the door each and every day. And you already have them on your mailing lists. Yes, the potential is staggering when you consider what you have to work with.
It wasn’t that long ago that as a dealer, I could buy all the inventory I needed using technology like ADESA Live Block, Manheim Simulcast, OPENLANE, OVE and SmartAuction.
I even had remarketers storing inventory that I could sell from. But those days are gone!
The strategies I used for the last five years are what many used-car managers are now using today.
I believe inventory today might be as hard to find as a win for the St. Louis Rams. With this in mind, and considering the current nationwide shortage of used-vehicle inventory, I was asked to write about the following topic: “Where do you find good affordable inventory?” That’s a good question.
Think of it in football terms. Not many games are won by teams that just run the ball; how much you need to run or pass is determined by how the game is going. For me, the running game represents inventory at the local auctions, trade-ins and other local sources.
Passing represents the inventory outside the market area. Most of us don’t need 30 cars in one day as much as we need 30 of the right cars, at the right cost every week.
By finding vehicles at the right cost, we will have more consistent cash flow (happy admin), better inventory management (happy sales team) and faster reconditioning turnaround (better profitability). Transportation is a cost factor, but there are excellent shipping solutions available. So do not be afraid to look outside the market.
Another option to find inventory is buying it off the street. If you’re groaning — stop. The vast majority of vehicles we want are in the hands of our customers. We have acquired and consigned some of the nicest inventory through this channel. Extra car deals come from people coming in to sell their vehicle, which simultaneously creates extra momentum needed to attract drive-by interest.
The old adage “customer traffic breeds customer traffic” is true.
Also quit hogging the ball — I mean inventory. I have been just as guilty. You get trade-ins that history has shown won’t sell on your lot, but you keep them to fill a space. It’s time to start paying attention to what sells from your inventory and how fast and what does not.
Historical data does not lie. A great inventory management system is a “must” these days. FirstLook or vAuto are tools that will redefine what “affordable” means for your dealership. If you use them, they can give you a whole new perspective on the probability of selling a car, which is everything when it comes to managing your inventory needs.
Also, it is time to set up a trading group. This is a group of dealerships that work together to buy and sell inventory from each other. Why would you do that? With inventory supply short, it will give you the ability to sell what you don’t need and possibly buy a reconditioned vehicle in return that will sell.
How are you going to do this with all you have to do each the week? Call OPENLANE and ask about their new Custom Trading Network. It will smoothly accomplish dealer-to-dealer inventory sales, and they manage the transaction side of things.
OK, so you have read to this point, and you are still thinking, “Nah, I don’t have the organizational structure or the time to do this.” You need help. No not psychological, just help. I have worked with a lot of professional, knowledgeable, franchised-focused wholesale brokers that are good at helping dealerships work their inventories with significant improvement.
There are also other ideas, like offering buyback programs, running a consignment program or running an on-site public consignment auction. If you have other ideas that are working for you, I would like to hear them. I think it comes down to many hours of hard work, including late-night searches and early morning online auctions outside your market place.
At its core, it’s about having a plan — a clear, well thought out plan. Work it and stick with it. Keep your eyes on the field. If you’re not doing any of this, and you have all the trade-ins you need, call me! Actually I would say get in the game, because you are missing profitable growth opportunities for your company. Search and buy what's right for your real inventory needs, keeping an out-of-the-box strategy in mind. Those are my thoughts on inventory for now.
I have to run now, or pass. I have four auctions starting. See you in the lens of the lanes.
It is the start of a new year! While I know that means another year has ended; I get energized knowing that a new, fresh, untouched financial statement is around the corner to record new achievements, new records and improved results.
Yes, I admit I am a bit of an optimist. But I choose to believe that each year, January will be the best month of the year. This has only happened twice in 24 years of my dealership management. It is the setting of the new benchmark that challenges me.
And why not be optimistic? We are in a business with flaws. We have car deals that unwind, new factory inventory that arrives damaged, successful employees that become disenchanted, ever increasing customer expectations and ever changing rules and laws. Not to mention natural disasters, economic swings and other factors. You may ask, why do I bring this up?
Are the management teams you employ focused on the goals ahead, or are they just saying “yes” again? Have you planned to take it to the next level and thought through where the inventory or process improvements will strategically come from?
I have discussed some of these questions with auto groups that have a track record for consistent improvement. Three of these auto groups have surpassed their set goals for the year.
For them these aren’t goals, they are a mission. These same companies are finalizing where their next level of performance will be for 2012.What is the key to their success? The key, of course, is planning. And for them it is planning all the way to the micro level of their processes. Everything is monitored and measured daily. I am sure this may not be a revelation. However, their daily, weekly and monthly focus is where the continuous momentum is maintained.
For a lot of us, there are always things to be worked on or improved, including finding the right salespeople, aligning management teams, getting rid of aged or obsolete parts’ inventory, improving service absorption and achieving higher levels of technician training. Need I mention improving warranty claims retention, and so much more?
But it all comes down to processes. When I look back at any point in time when my operations ran at their best, it was because the processes were in place and well understood by the employees. And everything ran well — as long as we remained focused. These are the hardest parts of the equation for most of us.
The new year is upon us. Before we know it, the first financial statement will be printed and will set the pace for our year. If Clint Eastwood were in our position he might ask, "Do you really want to improve those sales numbers. Do you?"
Do you really want to get on top of that inventory situation that is always an issue? Do you really want those dealerships to run on all eight cylinders? The only successful way I've seen it done is to get the best strategies in place that will start the year off right and combine them with solid processes that can't be circumvented.
For those of you that have already thought through this and have your plans and processes in place, sincere congratulations! For the rest of us, we have work to do.
With January arriving, just how prepared will your management staff and employee teams be when that first customer drives on the lot or walks through that door? Are you really sure? In year-end tradition let me leave you with a thought, or should I say, a song …"Should Old Acquaintance be Forgot, and Never Brought to Mind?”
I'll see you in the lens of the lane!
Reduced employee loyalty, no job security and increased competition for good employees are all reasons why it is a challenge for dealers to keep quality employees in the detail departments.
As detail employees enhance their skills, they will relocate from one dealership to another for better pay and treatment.
This situation is costing dealers’ money. It costs money to hire, train and retrain detail employees. The situation is sure not like it was a few years ago when there were more employees than jobs.
As a dealer principal or general manager, have you ever taken the time to ask your detail manager how things are going only to get a grunt and shrug of the shoulders? Do you ever feel that your detail employees would rather be left alone than have you or anyone checking on them? Do they do things “their way” instead of your way? Do you even have a way? If this might describe your situation, then you may be looking at an exodus of detail employees. To prevent this, you need to do something to motivate and retain your existing detail employees.
You don’t care. This doesn’t matter, you’ll replace them in a week! But if you care, read on.
Employee turnover in your detail department affects your dealership more than you realize. The costs associated with recruiting and training new employees and the impact turnover has on quality can be felt.
For example, if your sales people know there is high turnover in the detail shop, their confidence in the detail work will diminish, and so will their sales. Even though your detail employees are not usually responsible for car sales, they do play a direct role in sales.
When working with detail employees, you have to realize that this type of worker often thinks and acts differently than other dealership employees. As a result, most dealers aren’t certain how to deal with them. They soon discover that the incentives that motivate employees in other departments don’t necessarily work with detail employees. So a dealer must learn the techniques that motivate a detail employee. The following are some incentives that will help you motivate your current detail staff and encourage them to stay with your dealership.
Provide Adequate Equipment
Detail employees would like to have the latest innovations in equipment, not just a 10-pound electric buffer, shop vacuum and soil extractor. While the dealer will think of detail technology simply as the tools to get the job done, the detailer looks at new technology as a way to be more productive. And if they are working on a flat rate or by the car, productivity is critical.
The best way to keep detailers content and eager to work for your dealership is to provide them with the best and latest tools and technology. It also shows you care.
A good detail employee will be highly motivated by having the most advanced detail equipment available. If they aren’t, they shouldn’t be working for you. For the good detailer, the more advanced the equipment is, the more willing they’ll be to do the work that’s necessary.
Provide Rewards
Rewarding detail employees goes a long way in keeping them motivated. In addition to the common rewards, such as comp time and bonuses, consider giving more unusual rewards, such as the use of a loaner car for a weekend or a dinner out with the wife or girlfriend, etc. Also, recognition within the dealership is an unbelievable motivation for detailers, such as a photo and plaque that says “Employee of the Month.”
In most cases, the cost for any of these rewards is an extremely low price to pay for a motivated employee. And since most workers talk, the public recognition you will get as being a progressive, leading-edge employer will be priceless. When other skilled detailers learn of the perks you provide, they will be doing all they can to become part of your dealership.
Give Them an Opportunity to Learn New Skills
Too many dealerships are fearful of spending any money on training for their detail employees. They mistakenly believe that if they send their detailers to training seminars to learn new skills, the employees will master the new skill at the dealership’s expense and then leave to work for themselves or another dealership. While this could happen, if your employees are motivated to work for you in the first place, they will be eager to put these new skills to use in your dealership.
What is more important is if you neglect to keep your detail employees abreast of the latest technology, you run the risk of turning out bad work. As the automobile businesses become more competitive, successful dealerships will have employees with the most up-to-date skills and knowledge. That’s why continually training and educating your detail employees is a must.
On the same note, if you send your detail employees for training, be sure the new skills they learn will be of value to your dealership. Having them learn new detailing skills using equipment you don’t have only makes them anxious to find a shop that has it, which means they might leave your dealership.
If your detailers approach you about training, acknowledge that training is a good idea and then find training that will be beneficial to you and the employee. By doing so, you’ll be keeping your employees happy while guiding them to the most essential training opportunities.
Challenge Your Detail Employees
If you don’t give your detail employees enough work to keep them stimulated, they’re going to lose interest in your dealership and leave. Likewise, if you give them too much work and stretch their capabilities too far, they’ll become frustrated and quit. The key is to create a balance that pushes them to do more yet doesn’t overburden them.
As today’s economic climate continues to fluctuate, dealerships will continue to need the most skilled detail employees to stay competitive. So, in order to keep your employees motivated and turnover low, equipment, rewards, education and challenges are the concepts that you have to master. When you take the time to provide these little extras for your detail staff, they’ll reciprocate by remaining valuable members of your team.
