At the conclusion of the NCMi webinar on “Finding the Missing Pieces to Improve Service and Parts Gross Profit,” one of the attendees questioned our recommendation as to the necessity for sub-accounting for automotive dealerships. Robin Cunningham, the NCM Institute faculty member who presented the webinar, suggested that our next Up To Speedarticle attempt to clarify this recommendation. So, here we go!

A meaningful sub-accounting process is a primary ingredient of…

I recently had the privilege of teaching our first NCMi class that is totally focused on leadership in automotive dealerships. We began this 1½-day class talking about “employee engagement,” and the general managers attending this session began positively nodding their heads, when I started this discussion with, “Surveys show that…

                1. Less than one in four American workers say they work at their full potential.

                2. One-half say…

Wow, that’s a lot of acronyms, but you know what they all mean, right? Following are four recommendations from John Gilbert, the Fixed Operations specialist with NCM’s Retail Operations division. To increase your effective labor rate (ELR), reduce your cost of sale (COS), and improve your gross profit margin (GPM) on customer-paid repair order (R.O.) sales:

1. Check…

I am again continuing the mini case study focused on the objectives established, and challenges faced, in building processes to measure and manage OTDBs in the operating departments of an NCM client dealership group. Today, my focus is on one of the greatest vehicle sales opportunities that most dealers enjoy, but fail to capitalize on.

At one point during this engagement, I had asked the dealer principal if he was satisfied with the strategies being employed to develop vehicle sales…

We recently completed a regional NCMi® training workshop in Washington, D.C. titled, “How to Make the Phone Ring and the Door Swing in YOUR Used Vehicle Department.” One of the class exercises was for the attendees to complete a checklist to determine if they operated a “World Class” used vehicle department. Following are the questions that resulted in the most productive discussions: 

• Is the Daily Trade-Walk discipline being diligently followed?

• Is the…

Last evening, as I was thumbing through my April issue of National Oil and Lube News (NOLN), I began to reflect on why and how the folks in the independent automotive repair and maintenance business managed to take such a large chunk of service business away from the franchised dealers. Well, in truth they didn’t take it away…we gave it away…years ago…based on our focus on warranty work, our prices, and our indifference to the service…

Over the last 15 years, NCM Associates has provided hundreds of educational programs that delivered unparalleled training to thousands of dealers, general managers and department managers. However, there is one area in which we have admittedly fallen short…focused leadership training. Up until now, our primary focus has been on the “nuts and bolts” of dealership management. However, the NCM Institute faculty members, as well as many of the dealership personnel that…

It was in late 1987, and I was conducting an in-dealership workshop focused on financial and operational planning and controls. I was describing an F&I process that I had recommended to increase service contract penetration, when the general manager said, “We used to do that.” In response, I asked, “Did it work?” “Absolutely,” he answered. I was tempted to say, “Then why did you stop doing it?” but I was new to the consulting business and didn’t want to risk offending one of my few…

A few weeks ago, we published an article titled “Clear Expectations Set the Standard for Dealership Excellence.” In that discussion, I talked mostly about setting expectations. Today I’ll be presenting one of the processes that NCM recommends for managing expectations…the “one-on-one” meeting discipline.  Why should we have one-on-one meetings?  Because every employee needs and deservesto have quality, individual, interactive…

Over the last ten years, anyone who has not witnessed dramatic changes in the used vehicle arena must have his head in the sand. Why is it then that so many franchised new vehicle dealers have thus far failed to effectively adjust to these changes? So that you understand what I’m talking about, I’ll just mention two of these impactful changes:  (1) the growth of the Internet as a marketing source; and, (2) the advantages available through inventory optimization technology. Even the language…

Several years ago one of my more enlightened and proactive client-dealers said to me, “I know I don’t really need more opportunities to do business; I just need to do a better job of measuring and managing the OTDBs I already have.” He then asked for my help to develop and implement a traffic management process for each of the five operating departments within his multi-rooftop automotive dealership group. Over the next several weeks,…

Over the last ten years, anyone who has not witnessed dramatic changes in the used vehicle arena must have his head in the sand. Why is it then that so many franchised new vehicle dealers have thus far failed to effectively adjust to these changes? So that you understand what I’m talking about, I’ll just mention two of these impactful changes:  (1) the growth of the Internet as a marketing source; and, (2) the advantages available through inventory optimization technology. Even the language…

Sometime in your automotive management career, I’m sure that you’ve all been asked, “How do you know whether you’re winning or losing without a scorecard?” Scorekeeping and scoreboarding is a discipline that falls within each of the following major Elements of Effective Accountability Managementas discussed in previous blog posts:

• Plan your Work and Work Your Plan!

• Clearly Define and Communicate Your Expectations!

• Measure What You…

In late December, we posted an article titled, “How Do You Increase Service Department Sales?” In that article, I noted that there are only three ways to do this, the most difficult being to increase the number of customer-paid service transactions (customer R.O. count).  Up To Speedreader feedback indicates this is a high-priority subject, so today I’ll discuss one way to increase your customer R.O. count.

What follows is a…

Several weeks ago we published an article that discussed the 6 Elements of Effective Accountability Management. The second of these elements, “Clearly Defining and Communicating Your Expectations,” is a critically needed, but rarely well-practiced, discipline within the retail automotive industry. You’ve heard it before: people will rise to the level of performance and/or behavior that is set for them. Mind reading is not a job requirement, in spite of what some dealership managers…

When I started my retail automotive consulting practice in 1987, I chose to state as my unique value proposition, "Guaranteed 1,000% Return on Investment." During my first few years as an independent consultant, I was shocked to learn that very few of my potential dealer clients had a clue about what this meant. So I would explain that, for example, if the dealer would invest $2,500 in professional fees with me, I would provide a money-back guarantee that I would assist in increasing the…

Since we initiated the Up To Speed blog, I’ve received numerous emails that suggest that one of the biggest road blocks to retail automotive success is the dealership (or department) culture. Because this is our first newsletter of 2012, I decided it opportune to tackle this thorny issue. “Culture” can be defined as the shared values and practices of the company’s (or department’s) employees, and it’s important because it can make or break your dealership. Business cultures…

This is a pretty basic question, right? But when discussing this subject recently during 2012 annual business planning conferences with several client dealership service managers, I discovered that the answers were far more elusive than they should have been. Most of the NCM client dealers continually try to achieve 5% - 8% year-over-year improvement in Fixed Operations profitability. And those that successfully do so fully understand that it doesn’t just happen. This level of…

Most of you are probably adding the final touches to your 2012 business plan. At NCMi, we refer to this annual planning process as budgeting. Many experts agree that automotive dealership budgeting is as much an art as a science. Because industry business cycles are not repetitious, a good budget may result as much from experience, sound instincts, and good judgment as from anything else. Nevertheless, a budget is pretty much a view into the crystal ball, attempting to…