For 3 industry-leading dealerships, service department management is a continual balance of implementing processes while remaining open to change.
“I suggest creating a parts and maintenance booklet with basic programs and promotions, as it’s a great reminder for long-time employees and a good reference for new hires, but just be sure to let it evolve,” says Chad Stoline, corporate service. John Deere Van Wall Equipment dealership manager. “Our profession is changing. People change. Technology changes. You need to review this thing. Don’t let it become prehistoric.
During the Dealership Minds Summit 2022, Farm equipment brought together representatives from Van Wall Equipment Dealers of the Year (2016), Sydenstricker Nobbe Partners (2021) and Johnson Tractor (2012) to share best practices that improve their service departments. Panelists included Stoline, who represents Van Wall’s 25 farm stores; Chad Schaffter, aftermarket manager at Sydenstricker Nobbe Partners, a 27-store Deere dealership in Missouri and southern Illinois; and Eric Reuterskiold, president and CEO of Johnson Tractor, a 9-store Case IH and Kubota dealership based in Janesville, Wis.
Dealer of the Year Q&A
Q: How can I implement the concession process in a new store without employees feeling like they’re being pushed to their knees?
Chad Schaffer: The most important thing I found is that when you make this change, you really need to explain why.
Eric Reuterskiold: We don’t change for the sake of change – we only improve. If their process is better, we will adopt their process.
Chad Stolin: I would say don’t go in and recreate the wheel on day one. Come in, be in the store, see how it works, watch it work and learn. It’s more about shutting up, and using your ears and eyes.
As these resellers will attest, creating uniform processes is a time-consuming but worthwhile endeavor that requires communication across departments and stores.
Stoline and two other Van Wall managers wrote the service processes. Early on, they presented the process book to a store that hadn’t had much input into its writing, and the store employees responded forcefully.
“I was lucky to only do it in one place,” says Stoline. “[After that], we sent questions to our other sites. They understood what we were doing and got involved.
The questions were posed to about 15 service managers with over 10 years of experience, as well as a few car dealerships to get outside perspectives.
Stoline used everyone’s responses to write the service directories, which exist as Google Docs. The books have been especially helpful for new hires, who can be directed to a central location to search for answers.
“It took a lot of effort, but in the end it’s a good tool for our employees,” says Stoline. “I try to come up with new ideas every time I go somewhere, and if new stores have a better process than what we had, we get them on Google Doc and implement them. We think it takes let one person make the mistake, so the other 200 don’t have to.
Sydenstricker Nobbe had 8 months to plan before merging 2 dealer groups, giving management plenty of time to review the processes of both organizations. Schaffter says they brought teams to each location to go through the store’s “process bible.” From there, Schaffter set the strategic direction for the parts and service department and worked with each division’s leadership to implement and execute the direction and change.
Johnson Tractor is following a similar path by beginning to create a standard operating process manual. Reuterskiold says one person serves as chairman and writes the manual after talking with leaders from each of the dealership’s departments.
Once processes are in place, a dealer can monitor metrics to assess performance and spot changes that need to be made to improve after-sales service processes and efficiency.
Sydenstricker Nobbe uses dashboards to measure key metrics and generate performance plans for stores and technicians. Performance plans define expectations and base pay rates, and scorecards make it easy to identify issues. Schaffter says service departments review dashboards daily, weekly and monthly.
“If the new stores have a better process than we had, we implement it…” – Chad Stoline, Van Wall Equipment
“We can see, at a high level, that we have a problem in a store,” Schaffter says. “From there, we start to dive into the details and figure out if it’s a productivity gap or an efficiency gap. Same thing with our technicians. We are looking at where the gaps are and how we can address these issues.
Reuterskiold starts by looking at financials, sales and net profit to get a general idea of what’s going on at Johnson Tractor stores. If he identifies a department that’s starting to slip, he’ll dive into data on individual technicians and their effectiveness.
A few years ago, he noticed that one of the dealership’s top technicians was becoming less efficient. He went to the tech manager and found that tech was starting to mentor new hires.
“His efficiency started to drop, but it wasn’t because he was doing a bad job. It’s because he’s helping all these other people,” Reuterskiold says. “There are things you have to dive into because on paper they don’t tell the story. This led to this particular technician becoming a service manager. »
Van Wall made an effort to examine the intangibles behind technicians’ profits and performance. Stoline says leadership assesses the impact of the store’s culture, management, communication and customer engagement on its bottom line.
“It’s hard to assess, but we spent time thinking about whether the store and the culture feel right? Is that why the store isn’t working?” Stoline says.
Van Wall measures applied time (productivity) to track technician performance. Stoline says the dealership noticed they were missing 10% of application time over the year — the equivalent of a few thousand hours — and decided to monitor what people were doing each day to find out where. time was wasted. Management allocated a technician’s time in a daily timesheet and in doing so, halved the productivity gap in 6 months.
Open book management
Van Wall and Johnson Tractor have an open-book management philosophy and share finances with everyone from managers to technicians. Reuterskiold says Johnson Tractor’s department meetings include a full financial statement for that store and department.
“It’s important for technicians to know what impact they have on the business and how they can make a difference,” says Reuterskiold.
Click here to watch the full dealer-to-dealer panel “Alumni Group Service Best Practices Dealer of the Year” from the 2022 Dealership Minds Summit. This video and all videos from the Summit session are brought to you courtesy of DeLaval.
Van Wall managers work together to create a billed hours target based on each technician’s past performance. The store’s billed hour target multiplied by the store’s current rate gives the net labor sales target for the year. Technicians see the numbers monthly, giving them a better understanding of buying decisions and the effect their work has on the dealership.
Sydenstricker Nobbe has had a lot of turnover at the service desk over the past few years, Schaffter says, because the dealership is trying to get the right people into leadership positions. This has led to “a lot of immaturity” in understanding finance, Schaffter says, so the dealership currently focuses on gross margin as the first step in teaching finance. Incentives are tied to gross margin sales performance, and service managers learn how everything from labor performance to service accessories affects gross margin.
“Going forward, we’ll start to bring contribution margins down to fixed and net, but as an organization, we’re not there yet,” Schaffter says. “Right now, I’m monitoring everything from a variable and fixed perspective to make sure we’re on track and within budget.”
All 3 dealers claim that open communication leads to trust between departments.
“Whenever I go to a place, no matter how quickly I visit, I try to visit every employee in that place,” Reuterskiold says. “I try to convey that I care about you and your family. It sets the culture for them, especially our managers. It carries over to how they interact with their people.
He challenges everyone at Johnson Tractor to find solutions rather than complaints. As the dealership grew, he realized that people could only tolerate so many unnecessary changes.
“Stop making changes and make improvements instead,” says Reuterskiold. “Don’t make a change to make a change. If you can do something to improve yourself, then make an improvement.
Stoline also encourages Van Wall managers to make the right decisions for their store, knowing they have the support of the company team.
“We try to get our managers to think about situations,” Stoline says. “If they have a situation, also provide a solution. We will support your decisions.