How to Impress Your Customers…On the Phone

Most OPE dealerships today have plenty of competition. And, it’s all too easy for customers to drive to a big box store and get a discount that many dealers can’t match. But, dealerships can win these customers back by providing excellent, personal service to everyone who walks through their door.

Providing excellent service benefits everyone. Your customers feel truly special when you treat them with attention and respect. You and your team feel good because you know you’re doing the right thing. And, your business benefits because not only will your customers keep coming back, but they’ll tell their friends and family about the great experience they had in your store.

Big box stores usually can’t compete on this level.

So, how can you do about wowing your customers? Well, it all starts with a phone call.

1. Avoid the “Hold” Button

It’s easy to forget that providing excellent customer service starts the moment the phone rings. Often, the biggest frustration a customer experiences is when they’re put on hold. At a big box store, this is standard fare. So, make it a goal not to put your customers on hold, and never for more than thirty seconds.

2. Act Like the Customer Is Right There

When a customer calls you’re not always going to be able to answer their question right then and there. You might be with another customer, or you might need time to research their question. It’s vital that you, and your team, return each call that comes in. Forgetting to return calls reflects very poorly on your business, and customers won’t keep calling back. Treat each phone call as if the customer is right there in your store, and return their call as quickly as possible.

3. Don’t Overuse Your Technology

Today’s technology is a marvelous thing, especially when it comes to OPE office management software. These days we can track our customers’ buying habits, record lost sales, send out e-newsletters to educate our customers…all of which we couldn’t do just 20 years ago. But it’s important not to let technology get in the way of your customer service, especially on the phone.

Many larger dealerships have an automated answering service. When the phone rings, a machine picks up and directs the customer to the correct department. Although this is convenient for the dealership, how convenient is it for the customer?

Usually, not very convenient at all. In fact, most customers are annoyed by automated answering services. So why use them if you don’t have to?

4. Coach Your Team

Is your team aware of how important every phone call is, and the impact these phone calls have on the dealership’s success? Probably not. So during your next staff meeting or morning huddle, share these tips, and other rules for phone etiquette. When they realize how important these calls are, they’ll want to go the extra mile for each customer.

Last Word…

Photo © by LordFerguson

You and your team need to spend as much time as possible interacting with customers, and that includes the moment they call in with a question. The more opportunities you have to impress your customers, even on the phone, the likelier they are to come to your dealership first, and spread the word about the great job you’re doing.

Remember, many customers interact with your business for the first time over the phone. This means that you and your team really need to make a great first impression!

2 Strategies For Improving Profits In Your Service Department

Every dealership wants to be profitable. But if there’s a weak area for most owners, it’s going to be the service department. Between managing techs, managing parts, and overseeing billing, there are plenty of places costs can spiral out of control and opportunities for increasing profit margins can get overlooked.

The good news is that there are plenty of ways you can ensure efficiency and stay on top of your billing and techs in your service department.

Strategy #1: Know Where You’re At

Profitable dealerships always know where they’re at financially. Not knowing where you stand is just like setting out on long journey with no map, and no idea where you’re starting from. It’s just not a smart way to move forward!

Quality OPE office management software allows you to see within seconds exactly where your dealership, and your shop specifically, stands financially. You can keep track of parts inventory, your techs billable hours, and how much work you have scheduled in the days and weeks to come.

Staying on top of these metrics gives you, as an owner, a feeling of control that you simply don’t have without a smart system in place. Plus, having a complete picture of your shop, and where you stand, allows you to spot opportunities for growth, or areas where you could trim costs.

Strategy #2: Stop Real Time Billing

Another smart strategy you can use to make your shop more profitable is to stop real time billing.

Real time billing is when you work on a piece of equipment for ½ hour, and then you charge your customer for ½ hour’s worth of work. The problem with real time billing is that it eats away at your profits.

For instance, you may know that a certain job is going to take your A-level techs half an hour to complete, so that’s what you quote your customer. But what happens when you only have a B-level tech available, and it takes them ¾ hour to do the job? Well, you just lost that ¼ hour.

Dealers that have profitable service departments operate more like car dealerships. They have an extensive list of menu and flat-rate pricing on the bulk of the work they do.

Think about this example: if you’re replacing the center spindle on a zero-turn mower, you know your A-level tech can get this done in about ¼ hour if he’s using a lift. But, you would bill this at ¾ hour. Why? Because there’s a good chance that one of your B-level techs

will be doing this job, and it’s going to take them almost ¾ hour to get it finished.

This not only improves your profits when an A-level tech does this job, but it ensures you’re not losing money when a B-level tech gets involved.

You can manage this by making sure every piece of equipment that’s brought into your shop is looked at by a qualified technician. This way a time and a price has been put on that equipment before it’s processed for service. The advantage to this “triage system” is that technicians know beforehand how much time has been allocated to complete that particular job.

Your technicians should also be keeping track of their time with outdoor power equipment technician software, or at least some kind of time log. Many dealers will use these time logs to spur efficiency and motivation in their techs.

Your service department can be an incredibly profitable part of your dealership. By using quality outdoor power equipment office management software to stay on top of key metrics and by setting up a flat rate pricing system, you’ll ensure that your service department carries their weight in the years to come.

Are You Measuring These Key Metrics In Your Dealership?

When was the last time you looked at the gross profit margin in your service department? Or, for that matter, how long has it been since you measured the profit margin of your showroom compared to your available square footage?

It’s easy for owners to get so wrapped up in the day-to-day workings of their dealerships that they neglect to look at key metrics on a weekly or monthly basis. But, these metrics exist for one purpose: to help you measure the health and forward progress of your business. When you go without looking at them, it’s like trying to sail a ship without a rudder or a map. In other words, it’s not something you want to do unless you actually want to get somewhere.

Successful dealerships use quality outdoor power equipment office software to help them measure these key metrics. OPE office management software can give you access to vital information about your business in just minutes, and can drastically shorten the “information gathering” time you’d spend without it.

So, what should you be looking at on a weekly basis to make sure you’re meeting your goals for the year?

The most important performance indicator that you need to be looking at weekly is your gross profit margin on parts, whole goods, and service. If you do rentals in your dealership, then you also need to look at your gross profit margins in this department as well.

Determining where you need to be will vary slightly with each dealership, but in your service department you should be aiming for a gross profit margin of 50%-55%. Your parts should be 48%-53% for OEM, and for aftermarket 60%-70%.

When it comes to your whole goods, you need to analyze this number as it’s compared to the total square footage of your showroom space.

Another key metric you should be looking at is the management cost per dollar sold in each department. Some dealerships are very small, which means that owners are also working as managers. If this is the case in your dealership, then you need to take into account your salary just as you would a manager that you had working for you full time.

When it comes to the metrics you need to be looking at on a monthly basis, parts aging and inventory turns are probably the most important. Now, doing this without OPE office management software is going to be challenging, which is why so many owners find that investing in quality software is more than worth it.

The reason why it’s so important to look at these two metrics monthly is because it’s so easy to let parts and inventory slide through the cracks, especially during the busy seasons. Most dealers only look at this information at the end of the year, since that’s when they do the bulk of their buying.

Staying on top of the key metrics of your dealership is easy if you have quality software to do the work for you. Even if you don’t, however, it’s vital you spend the time compiling this information. These metrics show you clearly how your business is doing. If you discover that you have aging parts and falling margins, you can take action to fix the problem before things get out of control. And that can make the difference between a thriving, and failing, dealership.

How To Earn More Money In Your Parts Department

Photo © by swanksalot

Every owner knows that managing parts can be an incredible headache. You can have literally thousands of parts stocked, but if they’re the wrong ones then they’re not going to move. And then you’re left with a ton of cash tied up in something that’s just sitting on the shelf.

The good news here is that there are several strategies you can use to make sure that your parts department earns you money consistently.

Strategy #1: Identify Your Biggest Customer

Many dealers make the mistake of thinking that when it comes to parts, their biggest customers are the commercial accounts or individuals that walk through the door. But, this is almost always wrong.

Why?

Because the customer buying the most parts from you is your own service department.

Successful dealerships recognize this, and they earn more simply by structuring their parts department to fit the needs of their service department. Service departments, when run well, can really add to the profitability of a dealership. Your goal should be to make sure the service department has the parts they need on-hand so shop efficiency is improved.

Strategy #2: Don’t Try To Stock Everything

Many dealers try to keep everything they can in stock for when customers walk through the door. Some even strive to have parts on-hand for equipment that’s 30 or 40 years old!
What’s wrong with this?

Well, doing this means you’re trying up money and shelf space on parts that very few, if any, customers will ever come looking for. Even manufacturers don’t have a fill rate of 100%. So why should you?

Focus on the parts your shop needs first, and then on the parts that your customers come looking for most. You can track this information with quality OPE office management software, and this can really take the headache out of looking for this data.

Strategy #3: Create A Reliable Stocking Point

So how do you know which parts you should be stocking? Successful dealerships make it a rule not to keep a part on-hand unless three customers come looking for it within a 70-day period.

This information can be almost impossible to track without good OPE office management software. Your software can record this as a “lost sale” every time a customer comes asking for it, which will allow you to see what people are looking for and which opportunities you’re missing to add revenue to your dealership.

It’s important to stick to the formula of three customers within 70-days. When someone needs a part, many dealers will place an order and then add an extra part on to keep on-hand. But this is how a parts department gets bloated, tying up more revenue and shelf space than it needs to.

Sticking to the guideline of three customers within 70-days will ensure that your department doesn’t get out of control with parts people just aren’t looking for.

Although managing parts can be challenging, using smart strategies and having good OPE office management software can make all the difference.