New Economy, New Culture

There’s no denying that 2011 was a tough year. Between the economic troubles, the inventory issues and seemingly non-stop natural disasters, we all learned that we have to be ready to respond to pretty much anything.

The fact that your store survived at all speaks volumes about your creativity, your resilience, and your ability to do more with less. How did you do that and what did you learn from it? As the market slowly
recovers from the hardships of 2011, what practices will you take with you going forward? Is your dealership’s culture and customer experience ready for the unexpected and prepared for the shifting economy?

Keith McKinzie is general manager/owner of the Sonju dealership in Two Harbors, Minn., a small town on the shore of Lake Superior. He’s crafted a culture that’s helped him double profits in his service department. In the midst of a very tough economy, McKinzie moved his dealership, which sells Chevrolet, Buick, Ford, Dodge Chrysler, Jeep, Ram and Polaris, into a refurbished store with upgraded technology in April 2011.

The closest major market is Duluth, which is 25 miles away.

“It’s a challenge to get people to drive 25 miles from Duluth for service, but we do get them,” McKinzie says. One of the reasons they make the drive, he says, is an auto butler machine. For $29, customers can get their cars washed, vacuumed and the paint sealant reapplied. It also gives his service team an opportunity to look at the tires and the rest of the car.

He also has an in-store restaurant that’s open from 8 a.m. to 2 p.m. It’s convenient for customers who are waiting on their cars and it keeps employees from taking long lunches away from the store.

To grow his business and stay up to date, McKinzie has jumped into technology with both feet.

“I recognize that customers are more technologically advanced,” McKinzie says. “The new Chevrolet Volt can communicate with your computer. The Jeep Grand Cherokee navigation system tells you the speed limit. Today’s consumer requires a longer delivery to educate them on everything the car has. We used to have to tell the customer how to preset the radio. Now we have to show them how to plug in their phone to play their music. You need to be open to that technology because it’s coming.”

McKinzie has adapted to this culture of technology in several ways in his service department. He installed a side slip tester, which instantly tests the alignment on a car’s front and back wheels as the vehicle is driven over it.

“We explain that if the car isn’t aligned right, the tires won’t wear properly, they’ll have reduced gas mileage, and it will affect the safety of the vehicle. We show them a print-out that indicates red, yellow or green on their alignment. That’s pretty nice.”

If a vehicle inspection reveals a need for tires, the parts manager looks up the tires to get the price and the specification and emails it to the service manager, who emails it to the customer at home. “We have 100 percent closing with that,” McKinzie says. “That’s teamwork with modern tools.”

Coming up next, McKinzie says, is a plan to stock the service drive with iPads.

“The idea is that when customers come in, we hand them an iPad and say, ‘While you’re waiting, play with this.’ We’re trying to figure out how to quickly load their car into it so they can look up the maintenance for their car.”

If that sounds too tech-y for your store, there are other ways to connect with customers electronically. For example, he says, there’s no reason a service technician couldn’t use his cell phone to take a picture of a customer’s car once it’s in the service bay and send it to them. It addresses one of the biggest challenges service departments face—proving to customers that the work that is recommended actually needs to be done.

“Do people sometimes not trust us?” he asks. “Yes.”

But all the technology in the world won’t make a difference if your staff doesn’t know how—or won’t—use it. McKinzie sent his entire service department staff to JM&A training. “On the service lane, we show 100 percent of customers 100 percent of products 100 percent of the time with 100 percent enthusiasm,” he says. “Our service department profits have doubled in the last two years.”

McKinzie says that with giving his service department the right tools and training, he holds them accountable to use them. Their JM&A Group service trainer comes to the store every month to make sure, for example, that the 27-point inspection is done on every car and every customer is offered tires.

They’re also responsible for sending emails to customers and now, keeping up with social media because that’s where today’s customers spend much of their time.

“We had a customer come in yesterday. She had a problem with her car and she was unhappy. Two hours later, it was all over Facebook how great we were. We have to do this.”
Like any other kind of change, there’s been some staff pushback.

“The same people who didn’t want to do email said, ‘I’m not going to do that,’” McKinzie says. “They are going to do it. They’re going to be held accountable.”

The other major shift that McKinzie has seen is with the vehicles themselves. He points to NADA studies that say the cars on the road today are the oldest they’ve ever been. That means F&I, parts and service are even more important to the success of a store than in the past. To make them profitable, customers need to feel a real connection to the staff.

When the economy tanked, customers tightened up and “pushed their oil changes an extra 500 miles,” McKinzie notes. “Today, they’re back into taking care of their car. They want to have faith and confidence in you. You have to create the value. They don’t just want to know they need tires. They want to know the value of you taking care of them.”

Find out more about creating the right culture for today's economy:
3 Steps to Creating a New Culture

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