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2019-04-01 The Right Shop Manager

The Right Shop Manager

Let's Talk Shop for BHPH - Pt. 3

By Gene Daughtry, BHPH Consultant 

     In BHPH just like any other automobile retail business, Captain Obvious sez: you are buying and selling vehicles. Whether you sell 10 rigs a month or 200 you have repair issues to deal with. BHPH customers are not always organized or have the means to maintain the vehicles they drive. As a BHPH dealer the vehicles need to function properly or we are going to get them back. In order to balance capital outlay and get having marketable vehicles, we generally are buying higher mileage older vehicles. We do reconditioning on every vehicle purchased, dealers all have different ideas what is needed at this point. Someone still needs to decide what recon needs to be done and who does those repairs. Once the vehicle is sold we as dealers are “married” to the customers, their families, personal issues and driving habits. With few exceptions our vehicles are coming back to the dealership with some drivability issue.

     You are repairing vehicles. That is about the only similarity between a BHPH dealership and other shop operations. Increasing revenues is not even on the radar of a BHPH shop operation. This is why hiring the right Service or Shop Manager is important. Maybe you do not want to have a shop, you are still going to deal with vehicles and their problems. Depending on the size of your portfolio and volume of sales, you could help streamline the vehicle issues by having a Service or Repair Manager even without a shop. I personally believe having a full shop is better but there are plenty of successful dealers that do not or have some hybrid between no shop and a full service facility. In almost every case there is someone with the experience needed to determine what, why and where to deal with mechanical breakdowns and maintenance.

     A full service shop operation does mean equipment, scanners, wifi, different or upgraded software and technicians. It also means paying $15 to $30 dollars an hour for labor vs $60 to $100. Technicians are a different breed than most of the associates we hire. Technician is a skilled position and are in demand so having a Service Manager that has dealt with them (and can find them as needed) is very important. The Service Manager in either scenario should be able to diagnose most issues and have some tools on hand to do a quick job. He/She cannot be concerned about getting dirty, sweaty or be under a vehicle confirming the technicians assessment/work or handle it themselves. In the full service shop the Service Manager will have parts to deal with, finding the right ones and not letting them “walk” out the back.

     In a dealership without a shop the Service Manager still needs to be able to diagnose, have tools, no issues with getting dirty or talking with someone else’s technician. He/She in this scenario would be fielding the customers and either directing customers to the correct shop for help or capturing the vehicle to assess and take it to the shop himself (or with a porter). Depending on the process you as an owner want followed, the Service Manager may do paperwork and take money. I have had them operate as a buyer, deal with wholesalers, process repos and even backup sales. In my experience and from discussing with other dealers, having a Service person in this position dealing with every customer vehicle and recon a third party works on saving the dealer a good amount of money. When I get to sublet in the series, we will discuss the pitfalls of using a third party to do your repairs (you will have many, pitfalls and vendors).

     Who is the right person? A service manager from the new car shop will generally not be able to handle the job your operation presents. Instead of working hard to keep repeat service or upselling business your operation will be trying to collect money and keep the rigs in the street. A manager from the Midas/Firestone/Christian Brothers world with no other experience will also struggle with this job. The Service Manager will be involved in your collections operation. The Service Manager position in a BHPH dealership should be one of the top 3 positions you have. Your ideal candidate will need experience with a bad credit, Sub Prime business.

     In your BHPH dealership the customer doesn’t have a credit card to whip out and pay whatever the Service Manager says needs to be paid. When the customer hears something is broken and needs to be repaired they will overreact, knee jerk. “You made me buy this POS!” “I didn’t want this car!” “It had that problem when I bought it!” are just a few of the lines I have heard (there are many more colorful than these). When the Service Manager or someone else tells the customer they have to pay for a repair you are likely to get the “I’ll just leave YOUR car here (or where ever it’s at)” line. The Service Manager must have the experience to anticipate this and be ready. He/She can say “OK leave it” but that shouldn’t be what you want. Your Service Manager will need to understand his/her boundaries and do all they can to keep the car rolling, quickly as possible, so the shop isn’t affecting your portfolio more than absolutely necessary.

     Your Service Manager will need to understand the collections operation and be on board to help with GPS issues, late payments and fielding customers that are delinquent but still need to be driving. I would rather hire a person from a Rent A Center that always helped his dad work on cars than a manager from a Chevrolet store that did not deal in deep subprime. Why is that? Dealing with this customer is why. Google can direct anyone with some mechanical experience through vehicle issues, but Google cannot help your manager deal with this customer. A Service Manager can be too tough or too weak on your customers (and team members).  He/She will need vendor experience so he can get the best prices, quick delivery and if necessary, one and done parts. Vendor relations is critical so favors are offered and service happens consistently without much turnover. Deep Sub Prime (or BHPH) experience is almost a must because there needs to be a callous from previous customer interactions built up.

     Your marketability can be affected by the Service Manager and operational model you have. If the person you have is too tough or your model isn’t very helpful you will limit the opportunities you get from referral or reputation. You may be selling everyone that comes in but the question is: who isn’t coming in, or even considering doing business with you? Don’t work so hard doing everything right up front just to wreck the reputation because you have the wrong person dealing with issues after the sale.

Gene Daughtry has almost 30 years of BHPH experience. He setup and operated 4 different dealerships, all with full service operations. Currently Gene represents Jilcat Proline and their super lubricant line of products, does training with Auto Master Systems, provides Service Consulting and capital help for dealers through or call his mobile 479-970-4049