A one-two punch

Mike Sires addresses Knockout Customer Service for jobbers and the Big 16 for service dealers at Nashville Convention

Mike Sires believes the Network's jobbers and service dealers stand at the crossroads: keep up with the latest industry trends, technology and training, or slowly fade into oblivion.

"If you are not continually investing in training, technology and your personnel—and if you're not paying attention to what's going on around you in the aftermarket—you're going to be fighting over breadcrumbs," says Sires, president of Shawnee, Kansas-based Profit Partners, Inc. "You may be able to hang on for awhile, but eventually, you'll be gone."

Sires, one of the few truly hands-on authorities in the automotive aftermarket, has been successful at every level of the industry: service-center owner, and executive manager and owner in jobber and warehouse operations. Today, he's one of the most respected industry trainers in the country.

At the upcoming Network National Convention in Nashville, Sires will deliver two seminars: one outlining the figures service dealers should know to improve their profitability, and the other instructing jobbers how to develop lasting customer relationships by raising the bar on customer service.

Service Dealers: 16 Is the Magic Number

As part of his Big 16 seminar, Sires will cover the 16 numbers a shop owner needs to know to operate a successful business today.

Sires computes the 16 numbers into an Excel program and converts into it a formula. This vital information includes the number of bays, techs, invoices, hours of tech production, hours of operation, labor revenue and parts revenue, as well as the following costs: labor, parts, payroll and facility.
If an owner can carefully track those 16 numbers, Sires guarantees that shop can run profitably.

"With these numbers, the shop owner can figure out what it costs him per hour to run his business," Sires explains. "He'll know how many hours per bay, per day to break even. I can tell him how many hours per technician they each have to produce.

"With the Big 16, they'll know for the first time in their careers what they're real control number is. When they come in each morning, they'll know the exactly how much they need to produce to make a living. I've seen hundreds of shops implement this formula and turn things around."

Sires believes many shops are this close to making money. Often, the difference in a shop becoming profitable is as simple as raising their labor rate from $55 to $67.50 an hour, or by increasing bay production by an hour a day, or increasing their parts gross profit from 38% to 42%.

As part of the Big 16 training, Sires emphasizes a shop's two profit centers: labor and parts.

"Labor should be your primary profit center, and parts your secondary," he says. "Pay your overhead based on your labor profit, while the parts profit takes care of what I call ‘the quality of life': investing back into your shop through equipment, putting money into retirement funds, etc."

To be successful today, Sires maintains, you've got to be not only a great technician but also a great businessperson.

"In the 1950s, ‘60s and into the ‘70s, all that was necessary was doing the job right the first time and you'd survive just fine. They've gone from tangible to intangible types of work. Tangible work is when you sell someone a tire, while intangibles are performing diagnostics."

As vehicles continue to become more technical and the car dealerships continue to be aggressive, shops have to completely change how they compete, Sires says. Most shops today are complaining of the economy, low car count and the lack of qualified technicians to hire. Sires feels these areas of concern aren't going to get better overnight, so service dealers must focus on the things they can change.

"If our people are going to survive, they must start conducting business in a whole different manner," he says. "They must start selling maintenance versus breakdown, and they must start training their in-house team to conduct business in today's business climate. This means they need to have systems and procedures that everyone can follow."

Jobbers: CARE Enough to Deliver Knockout Customer Service
According to Sires, customer satisfaction is "worthless." Yes, Network jobbers, you read that right. But allow Sires to explain.

"That's right, customer satisfaction today is worthless…but customer loyalty is priceless," he says. "If all you're doing is taking care of today's customers, that's not good enough. That's the lowest rung on the ladder of customer-service acceptability. You've got to hit the highest rung, which is developing customer loyalty."

During his jobber seminar at the Convention, Sires will explain how to Deliver Knockout Customer Service. It all starts with CARE: C.ommitment A.ssurance R.esponse E.mpathy

Commitment: The word "commitment" usually has positive connotations in our society; however, Sires maintains that it can a negative for businesses making blind promises that they're not even aware of.

Sires claims most companies make unconscious commitments to their customers, who quickly become disgruntled when their expectations are not met. For example, the commitment can be as simple as a business ad in the Yellow Pages stating that a store is open from 8 a.m. to 8 p.m.

"That ad is promising the customer that an employee will be there by 7:45 a.m. in preparation to open to the store by 8 o'clock sharp—not 8:15," he says. "And if you promise ‘friendly, courteous' service in your ad, you'd better deliver on that commitment. The customer takes those words seriously; they see it as a commitment you've made to them."

Even something as simple as the business name on the side of a delivery truck can be viewed as a commitment, Sires says. And if the only exposure a potential customer has to your business is being cut off by your delivery driver, then your store probably hasn't made a good impression.

"I tell counterpersons and drivers this all the time: ‘Remember, you are the company. You represent the company; therefore, you are the company.'"

Parts Plus and IAPA stores with multiple locations should ensure that commitments and customer service are consistent at each place of business. In Sires' experiences traveling the country, the customer-service experience at one store often greatly differs at another location.
"You are only as good as your weakest link," he says.

Assurance: This area of service involves knowledge of the customer and understanding the different types of personalities you deal with on the job. By understanding customers' varying personalities, you can better grasp what their expectations of customer service are, Sires says.

"You've got to know your customers," Sires says. "You've got to be able to read the customer standing in front of you. You've got to be able to read them when they walk in the door and when they call on the telephone."

Another aspect of assurance is knowledge of your organization. You have to understand your company's policies and procedures. You have to understand your systems as well as the strengths and weaknesses of your team.

Assurance also includes knowledge of your product lines, Sires stresses.

"With all the different lines and all the different products we carry, it's tough for a counterperson to keep up," Sires says. "So they constantly have to be investing in their parts knowledge. They can't stop learning because of all the products and product enhancements that are coming nonstop. Everybody must continue to improve their knowledge of product features and benefits."

Response: How fast does a customer want a part and how fast do they need it? And everybody's different. Is the customer willing to wait for it? Or does the customer need to have it now? It doesn't matter if it's a walk-in customer or an installer: You've got to understand the urgency if your response is to be spot-on.

Empathy: Express a concern for the problems and needs that each customer has. Treat everybody with empathy, but keep in mind that everybody is a little different.
When in doubt, treat everybody like you want to be treated when you're a customer, Sires says.

"Better yet, treat everyone like you want your daughter, mother and wife treated when they're a customer at a place of business. If you can to that, you'll probably deliver knockout customer service."

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