Marcus and Peter talk about the need for dealerships to analyze their service processes from start to finish systematically. Using technology to track this data at every point and find areas of improvement can help inform what specific changes are needed to increase efficiency and customer retention.
Tactical Tips Episode #23 Transcript
BRAD: All right, this is Brad back with another Tactical Tips Tuesday. I’m super pumped, we actually have – this is a hot topic right now. So we have Marcus Aman and Peter Seymour, they’re from Bayley/ShyftAuto. They’re actually in the running to win this Automotive Ventures Finalist right now going up on Linkedin. So we’re recording this a little early. So today’s the last day of voting, but by time you guys see this, it’ll be Tuesday, and we’ll actually know who wins. So Bayley’s a cool company that I kind of stumbled across. Marcus and I met on Clubhouse, which is like a social media app, and they do some really cool things about fixing some processes and creating some KPIs within the service department for technicians and advisors and how quickly you do things, which technicians are best on each different RO. So let’s talk a little bit. I’m going to do this a little bit different. Usually, I ask the question, but you guys are way smarter than me on this. So I want to talk a little bit about things that you see or maybe even…here, let’s say “Hey, this is the #1 thing I see where people are wasting time. This is the #2 way that I see people are wasting time,” and maybe go back and forth. Let’s do this. How about Peter gives his top three and then Marcus gives his top three and let’s see how well they kind of coincide. So what are some ways that people can get more efficient on the service side of stuff?
PETER: I’m first? On my top three. So I’m the data guy, I’m the computer guy in this equation. And so my top three would be data, data, and then some more data, because the more data you have, the more ways you have to look at it, the more perspective you can get at it, the more bottlenecks you can find. So by just gathering the data and then being able to display that data in such a way that says, let’s look at this and let’s see exactly where the problems arrived. Let’s see what’s taking the most time. Is it the parts? Is it because somebody’s not getting back from the advisor? Is it because the technician doesn’t know what they’re doing on this particular type of project or a particular type of fix? And so that’s what I would say: data, data, data.
BRAD: I think that’s beautiful. So you made me think of a couple of things. Okay, so on the fixed ops side, we’re not really pulled into the marketing equations and so we don’t have KPIs or key performance indicators to measure stuff right, and so I think that’s important, is having some ways to measure different things. And then, I know you guys have a lot of clients. We have a lot of clients. That gives us bookmarks or benchmarks to say, look, this is where most of our clients have this issue. So more than likely you guys can go in and you can say, “Hey, look, we have 47 Toyota clients. This is usually what they’re waiting on the most,” right? Patrick Brown was talking about this one day when we were on the Tactical Tips Tuesday and we talked a couple of different ways where he backed data up to pull internals out of the shop and take them off site. So that is so important because how are you supposed to make educated decisions without that data, right? So, Marcus, what do you think? You know, I know you’re going to take it a different way now because he said he’s the data guy. So what are your top three, my friend?
MARCUS: Well, you think about what a dealership is measured on and there are benchmarks by the OEM that they care about and sometimes that’s a line to the dealer’s internal goals and sometimes it’s not. But you know, most every OEM and every dealership is going to care about CSI scores, right. They’re going to care about retention, getting their customers back in the door next time. And you know the OEM cares about customer and warranty paid dollars and so does the dealership. And what you have to think about is like what’s tracking today in a dealership in the fixed ops department, and a lot of it is like, you know, the hours per RO, the labor and parts gross, the warranty gross to service absorption or fixed coverage with billable hours, etc. And you have to think about it for a second. These are just results of what’s already happened, right? And you know, if you think about your dealership or your service department and you really map out the customer journey, there are about 17 key data points in a customer service visit touchpoint and you have to look at that and see if there are any spots in that journey, the customer journey, where there’s a potential bottleneck that could be holding you back. I used to be a fixed ops director for Hendrick and I worked there for years and I realized that there were a lot of process problems that current softwares that they had did not really solve or track. So I was passionate about it. I jumped into entrepreneurship with Peter to start the company we have today. But the reason I was doing that was because I realized that in service and fixed ops we’re getting two things, RO creation time, and RO closed time, and there’s an entire story in between there. And you know, if you don’t know all of the story, how can you measure it and then manage it? And if you can manage it you can make it better. But if you’re not measuring and it’s just based off of assumption, you’re just looking at the end result and you’re not able to really actually track the process. So my suggestion is you know, map out your customer journey, track that process and not just the end result, but the actual process itself to see if there’s any bottlenecks that exist that you can drill down into. An example of that is, you know, from the time an RO’s created, how long does it take a vehicle to actually make it to a bay? You know if you manage it, if you’re measuring that, and say, for instance, you have waiter express oil change tickets and it’s taken 35 minutes from the time you write an RO for that car to make it into a bay. What would it mean to your profit, your retention, and your customer service scores if you could get that time down from 35 minutes to 12 minutes or 10 minutes, or even 5 minutes? You know, what would that mean? And you know it’s constant improvement, but if you’re measuring it, you can manage it and if you manage it you can make it better.
BRAD: What does that take? Because you know where I’m at in Texas, so I’m thinking like cattle prods or stun gun. Like what’s the actionable thing on something like that? I mean is it just massive amounts of accountability? Is it tied into, you know, a pay plan? What are the ways to kind of correct something like that?
MARCUS: Well, today, in and most stores, once an RO is printed, sometimes it goes into this black hole of abyss, like RO’s printed, it may go to a dispatcher who dispatches it. But the advisors and the people that are working up front have little information to know where that car’s at in the process. It could be sitting in the parking lot for 55 minutes before it actually makes it into the shop. But being able to understand those things is important. So, you know, using modern technology to track these things gets rid of assumption. You know, today, if you go into a dealer and ask a service manager how long is it taking for cars to make it to lifts, you know they’re going to say well, “we do pretty good here.” Well, pretty good, is it an hour is that 15 minutes, what’s pretty good? If you’re you’re measuring it, you can hold people more accountable, right, so it’s not about tracking people.
PETER: I would say too, you know the cattle prods. So is it the carrot? Is it the stick? Right? You can look at it either way. But one of the things that we do is we take the data and then we can we use it to compare even technicians against other technicians and allow them the gamify. And the technicians, you’d be surprised, will be like “Yeah, I did that in 10 minutes. Can you beat it?” And they really try to go against each other as a well as reward them if they’re the best of the week and they’re turning the most hours or making the most money for the shop. So by collecting the data, I’m looking at it and then using it to compare against each other, or on a dealership-wide or on a dealership group-wide, or even national-wide. You know, how am I doing compared to other different technicians, and even to the point where we say well, this technician’s really good all the time, except for when they come across this particular oil change and are twenty minutes more than anybody else. Why? Let’s get them some help or maybe let’s dispatch that with somebody else.
BRAD: So that’s very interesting that you say that because, you know, in a past life I did a lot of hiring and firing for a call center and stuff like that. So you made me think of a thing that we used to say, if you’re seeing a technician struggling with a certain type of job, it could be an opportunity for training. When we have opportunity for that, and we really don’t have a lot of defined career paths for technicians. You know, we have every damn training you can think of when it comes to salespeople, right, you could go to closing school, you can go to this, you can go to that, you know, and I know the guys, so I know I’ve been to them all, right. And so I think that’s cool because you have to have that data to figure out that being able to self-assess is one of the greatest things to growing right, being able to self-assess, like when you’re selling a car and you’re going through the sales process and you get to the present numbers and you’re like, “Oh crap, I didn’t build enough value in the car during the vehicle presentation, because I didn’t hit on the hot buttons, because I didn’t do this” and so it’s almost like this ring light that I got up here right, you’re actually putting the light on it and you’re just lighting up for them to see. And people want to be better than they were the day before, and that’s a really cool thing that we’re able to do. The thing that came to mind, Marcus, when you were talking is if I just said I’m in a Decathalon, and I just said, well, I came in third, well, I want to be first, but I’m not focused on each individual event. How am I going to be first if I just say I’m going to go from third to first, but I don’t focus on each individual thing separately? And so I think that’s super important because that’s how I think of things. I think it’s very important because a lot of these guys know every part of a car. A lot of these guys know every part of a dealership and they just need some tools. They need some tools to figure out how to measure different things and I think it’s cool that you guys make it easy and that you do some consulting to make it easy and to find those processes. So what else you got from me, Marcus?
MARCUS: Right, yeah, I would say that you know, it’s understanding each customer’s journey too and you know, because customers defect like crazy from dealers after the warranty period expires, right almost 75% of them, and you probably know that number better than I do.
BRAD: Yeah, that’s 70. About 70% defect after the free services are up.
MARCUS: And why is that? You know, price may have something to do with it, but it could possibly be that sometimes it’s coming in for 2-hour oil changes.
BRAD: That’s part of it, absolutely!
MARCUS: And you know part of it is like great customer service. Are we really providing that? And if we are, then hopefully we’re able to retain our customers because we’re providing a decent experience. But you have to measure the process and it’s different than just writing a ticket and looking at the invoice to see how much we made off the customer. I’m a fixed guy at heart, so I’m all about CP dollars and CP gross. I’m all about it, but we have to understand a customer’s journey when they come through our door. You know, from the time we write an RO, how long does it take it to make it to a bay? How long, when it enters the bay, does it take a technician to start the MPI, because that has a direct effect on CP. If we can get the MPI done fast, we get it over to the advisor or the parts or whoever maybe to go ahead and present those recommendations to a customer. And it’s critical to measure those things. So like when a technician’s done with this MPI and he sends it over to an advisor, how long is a technician waiting to get an answer back from the advisor or from the parts department or whoever it may be? Because what we do not want to do is have that technician waiting for, you know, 20 minutes, 30 minutes, 15 minutes just to get an answer back on an air filter or a cabin filter or fuel induction service or whatever it may be. You know they get paid on flat rate majority of the time, you know. So time is money. And then a car backs out of the bay. How long does it take us to invoice that ticket? Is the ticket just sitting on a service advisor’s desk because they’re handling phone calls, waiting on new customers that are driving in on the phone with an extended warranty company for an hour, you know, selling work the customers that are in the lobby, like we need to understand those things too. And then how long are bays idle for without cars in them?
BRAD: Yeah, so if you want to list, here’s what we’re going to do, if you want to list of all of these KPIs to look at, Marcus, what’s a way people can reach out to you and if they don’t want to be setting up like five million egg timers in their shop to keep track of this. What’s the best way to reach out to you?
MARCUS: Marcus@getbayley.com or you can go to our website at getbayley.com.
BRAD: Yeah, and then check out the Automotive Ventures poll. Super excited about that. Marcus, I thank you and Pete for coming on today. Man, I really appreciate the information. I think that’s great stuff. So if you want to get a list of these KPIs, shoot Marcus an email. You can also reach out to me. You can find me at email@example.com. I can get you connected with these guys. But they’re doing some really, really innovative stuff in the fix ops arena. So you guys have a great day. Thanks for coming on.
PETER: Thanks, Brad.