Previous Installment:
In Part 1, Clements discusses the importance of having a compelling vision of success for your dealership.

Why do you exist as a business? The answer is to make money, but not just a little money, you want to make lots of it. I have had money and not had money — and I know that more seems to be better than less.

If you walk into your dealership each morning focused on making money, you will find your day is more enjoyable. The same holds true for your employees. They want to be a part of something that will help them make more money.

I was visiting with a dealer not long ago and he said to me “Bob, you know what my problem is with my employees? All of my employees are only here to collect a pay check.” I said back to him “Why do you come into work every day?” He said, “Well, I want to grow a business.” I laughed and said, “That’s not it.” He said, “I guess to get a paycheck.” I asked him how big of a paycheck he wanted. He said, “As big as I can get.” 

It should be no secret that your plan for success should be related to money. If it’s not, it’s time to reevaluate why you are in business. To make more money, you need good employees who make sure you have happy excited customers that are willing to come back again and again.

Taking Care of Customers

I can’t tell you the number of times a technician has tried to “help a customer out” by blowing out their air filter rather than putting a new one on. Or I have heard a parts person say to a customer, “Here is the part you want, but you don’t want to pay that much. Why don’t you buy it from this website?” You might laugh, but I have heard parts people say that.

Why do people come to a dealership? Because they want their equipment taken care of by professionals. They want OEM parts for their equipment, not aftermarket. They want technicians who have been trained to service their equipment. They want to talk to sales people who actually understand why one product is superior to another and the value it can bring them.

Your vision clarifies the purpose of your dealership for you and your employees. For you, it’s the reason you get up every morning and take the risks you have to take as an owner or manager. For your employees it gives them purpose and a sense of accomplishment and, at the end of the day, a feeling that they are part of something bigger than themselves. When your employees understand your plan for success, they understand that they don’t need to ask for a raise every year. They know that when we make more money as a dealership, we all make more money.

Having a strong vision and then putting a plan in place to bring the vision into reality will become a game changer for your dealership. Your vision and plan for success should make your employees go, “Man, I want to be a part of that.”

Rewarding Employees

In the dealerships that we consult with, we take 30% of all new money generated and give it back to the people who generated it. We then keep 30% of the new money and count it as net income.

Every department is measured separately when it comes to the new money generated and each department gets to share in the profit. This is one of the best ways to get your employees on board. You will also see that they will quickly understand that as customer loyalty rises with your dealership, so will their bonuses.

Create a High Performance Dealership with Bob Clements is a new series brought to you by Yanmar.

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Planning for Success in Each Department

If I am going to be successful as an owner or manager, I have to have a vision that everyone is going to buy into. It’s like a football team with its offense, defense and specialty teams. They all have to do their jobs and be focused for the team to win.

Offense doesn’t worry about the defense. Defense is not worried about scoring, they are only worried about the keeping the other team from scoring. They know that if they can keep the other team from scoring, they can let their quarterback do his job, which is to score points. And, special teams are there just to mess up everyone’s life. Just when you thought you had the ball, you don’t have it anymore.

It’s exactly the same thing in your dealership. While each department has a slightly different purpose, each one needs to be focused on the same big vision.

As you take the dealership vision and begin breaking it down by department, you will find that each of those departments will have a slightly different take on what the vision means to them. I think the most important thing to remember when you cast your department visions is that the vision should reflect how you want your customers to perceive their experience with that department.

Think about it this way, if a customer were talking to a friend and telling them about your service, parts or sales departments, what would you want them to say?

Let’s start thinking about the vision for the service department. I want customers who leave the service departments we consult with to say, “They are a little high, but they do great work.” The customer might mention the price we charge, but it will always be followed up with the quality of the work that was done. Most people are more interested in having their equipment working correctly than getting it back cheaply and having it still not work correctly.

So your vision for your service department is to have your customers raving about the quality of service you do and your timeliness in getting the work done.

In regards to parts, you want customers to walk out of your dealership saying, “They have great prices and they seem to have everything I need.” In many cases, you don’t even have to tweak your margins on items to do this. When you look at things like oils or filters, it wouldn’t surprise me one bit if you were in fact already lower on a number of those things.

The next step is simple: Communicate that to your customers. You can put a sign out that says “Check out our prices” and compare it to the prices that are in the box stores. That alone goes a long way in communicating that you have great prices.

Keep in mind, your parts department is typically the area of your dealership with the most new customer contacts. If they walk up to your parts counter and see that your prices on high-demand items (such as oil and filters) are less expensive than they typically buy at the big box stores, you will be the first place that comes to mind the next time they need those items.

I always encourage dealerships to have a wide and shallow parts inventory. By this I mean, you should have a lot of different parts available, but not a huge amount of any one part.

Now, don’t get me wrong. You need to have all of the wear parts for every machine that you sell or have sold in the last 5 years. If you have sold it, you will have customers coming in to look for the parts for it. It is your responsibility as a dealership to keep those parts in stock.

Sales is another important area. It goes back to what do you want your customers say about the experience they have with sales? My goal is to have customers walk away and say the dealership is fair to deal with and has great products. The brands you represent denote quality and reliability. The only thing we have to do is to create a sense of fairness. That really comes down to your willingness to “work” with them at some level to help them buy. I encourage dealerships to offer some sort of preferred customer program to make people feel like they got more than just the equipment — they got a little something extra.

In our dealerships, the preferred customer program gives them priority service in our shop and a discount on labor. I would encourage you to think about ways you can add value without adding cost to either you or your customers.

Relating Everything to Vision

Every area of your dealership needs to relate back to the vision of the entire dealership. For instance, if your vision is to have customers leaving your dealership “wowed,” your service department has to communicate with customers and avoid comebacks on repairs. This means that your shop can’t only contact the customer when it’s time to pick up the equipment, there has to be communication all along the way.

In the parts department, you need to carry wear parts for the equipment you sell. There is no reason that this should ever not be the case, and this is one of the quickest ways to frustrate customers.

Success in your dealership will not happen without a plan that involves casting a vision and then working with your managers or your people to bring it to life for your customers.