Welcome to 2019! Time for resolutions, gym memberships, and fresh produce for lunch. It’s also time to reexamine profits and losses — and not just in the obvious places, like advertising tweaks, support personnel, and your document providers. Instead, let’s ask six simple questions that will shine a light on your hidden profit killers.
Who is more willing to show up to work and less likely to call in sick twice a month? Is it a happy, engaged employee or someone who is simply going through the motions? Your culture can be a profit killer that you never see on your financial statement. Sales and finance pros who exude positivity by nature help customers feel the same way. “Culture” can be a very broad term that is at times overused, but its importance is paramount.
Who makes more gross, a well-trained service advisor or one who does OK enough to avoid much attention? A commitment to training tells your team that you are paying attention and that you want better results. It also lets them know you are willing to invest in them as people.
How much do you spend on bulk oil, paper towels, coffee cups, and brake cleaner? If you are a part of a dealer group, do a comparison. If you are a single-point store, talk to neighboring dealers or your state association. Consider other vendors and commit to open bidding on a yearly basis. You don’t have to drive razor-thin bargains with every vendor — and some long-term relationships are worthy of a higher rate — but you have to do your due diligence.
4. Unasked Questions
Do you pre-install wheel locks on all of your cars? If you do, how often are you asking the customer to pay for them? It’s simple: “We install wheel locks on all of our cars to prevent theft. For only $119, you can keep them.” Every customer who says “Yes” adds another $50-plus per car sold. And wheel locks are just one example.
How many support people do you have on staff that have free time? Consider asking your hourly folks to make calls, do minor repair or painting jobs, or help customers with questions. There is always plenty to do, and there is certainly time to do it.
Lastly, what does all of this look like? That, my friend, is up to you. But clear expectations are the only way to be sure your team is not shooting in the dark. Know what you want and be willing to make it happen. Make sure training happens on the regular. Put someone in charge of measuring the cost of things and spiff them to find savings. Get your folks to ask, and then ask again. Keep people moving, keep people productive.
Remember that it is up to you and your leadership team to guide and lead the team to the promised land. Never stop looking for small ways to increase productivity, lower expenses, raise gross, and help your stores be better for both employees and customers. Walk in with fresh eyes on a regular basis and find ways to make it better. Get rid of the profit killers!
Jason Heard is the general manager of Lee’s Summit (Mo.) Honda. He is a 25-year industry veteran with extensive sales and sales management experience. Contact him at [email protected]