Charlie Polston is a fixed operations profitability and customer retention consultant with BG Products. He has led hundreds of workshops across the U.S. and Canada, and led a number of sessions at the National Automobile Dealers Association (NADA) annual conference.
What do you see as the biggest challenges facing fixed-ops departments right now?
I think the greatest challenge facing them is catching the vision that preventive maintenance is the future of the automotive business. Any car dealership that is not selling preventive maintenance is going to suffer tremendous financial hardship in 2010 and in the coming decade.
Most dealerships do warranty work, and they fix broken cars. The battle cry of the automotive industry for the past 100 years has been that, "Cars will break and we will fix them." If that is what your service department is doing right now, you are in deep trouble.
Instead of, "Cars will break and we will fix them," the new business model they must embrace should be, "We hate broken cars, and therefore we are going to offer preventive maintenance to our customers so that their cars won't break."
How are dealers making that transition?
There are two ways to make that paradigm shift—the easy way and the hard way. The hard way is that dealers have found that selling new cars is no longer profitable. Selling used cars is no longer profitable. The future of their dealership rests in fixed operations through the service department. Unfortunately, and this is sad, I think the reason a lot of dealers have finally seen the importance of fixed-ops is that there is no where else they can go to make money.
Most service managers are not business people, but many of them have done it the easy way. They've been willing to take advice, to listen to consultants, and to change their business model from repair to maintenance.
What have been the most important technology innovations in the service department?
Probably the most cutting-edge technological innovation would be the tablet PC. But really the tablet PC is not the innovation; it's the software that goes with it. When that is used right, it creates a "forced march." The advisor has to do Step A before he can move to Step B.
But there is something else that many dealers get confused about. Everybody is looking for the silver bullet and it doesn't exist. They want the technology to drive the process, and it doesn't work that way. The process has to drive the technology. If somebody is a lousy manager and a lousy leader, you can have expensive technology and still be a lousy leader. The average multi-point inspection form costs about 15 cents. If a manager can't get his advisors to walk around the car and fill out a piece of paper that costs 15 cents, he won't be able to get them to do that on a tablet PC that may cost $10,000.
