Increase Net Profit By Bridging The Gap Between Parts And Service

The first thing that we thought one of the ways to bridge the gap between parts and service, that they don't see themselves as silos would be wonderful. And to first bring them together. What better way to bring them together than with a shift meeting?

Yeah, so like when we're in a service department, we'll have a shift meeting every morning. And a lot of times the more progressive parts managers will come to that meeting. So 6:45, you know, 15 minutes before we open, the parts manager will come participate in that meeting. And then in some stores we'll have a shift meeting with the tax and the parts manager will come to that also. And then the service manager going to the parts meetings. So whenever there's a meeting in fixed ops, both managers are there supporting each other.

I think that's great.

You know, when a parts manager shows up to a shift meeting, that, that's a different kind of parts manager. That's somebody who cares. And sometimes the first time they go, they get beat up a little bit, especially the tech one. But what happens is if they show up the next time and the next time the, the team starts to believe that this person cares, they're not, you know, just hiding in an office, avoiding everything they, you know, they want to know and they'll address whatever comes up. Even if you don't like the answer, you would rather have somebody be there and show up than to hide.

Yeah, I think that in some of the best places that we've been to, I've seen actually when the service managers on vacation, the parts manager runs the whole thing.

Oh yeah, that's really cool. Yeah, it's really cool.

So yeah, so there are progressive parts managers out there and that's the kind of stuff that they're doing. So. So shift meeting you want to participate in? I think sh. Shop meeting is really good, not just for the parts manager, but I think for the, for the back counter people to participate in that because they're a big part of production.

Well, and also like extra, extra credit would be if the parts and service managers are going to the sales meetings every Friday together and talking about accessories. You know, if you're preloading any cars, talking about those handing out spiff money if they sell accessories.

Oh, coming from the parts manager instead of from the sales department.

Oh yeah, the parts. I always, yeah, the parts and service manager go do that and pay that money.

Yeah, that's brilliant. Because then you don't see the, then you don't see the parts and service manager as an obstacle. They're a Source of income. That's a really good way to look at it.

Well. And you're constantly bringing the possibility of accessorizing or personalizing vehicles to the front of their mind.

Agreed. I like it. So the next thing on our list is. And it sounds like we're getting a little meeting heavy here, but I promise we're not. Is that monthly that the service and parts department have a joint financial meeting.

So you sit down, you get your. Your financial statement, you make two copies, one for yourself, one for the other manager. So you both have them, and you go through, you know, what's our net to gross? What are our margins? What are our gross profit percentages? Where could we be selling more? How could we help each other and really have an understanding that you're in it together? And what comes out of those meetings is usually the service department can figure out ways for parts to hold more gross on stuff. And the parts department can figure out how when they're selling parts, the service department can get more labor. So they start adding to. People are calling on a part. Hey, we can install that for you. They start recommending the service department, and they start feeding work that way. And also, just like sometimes the pricing in the back counter is different than the front. You just start to figure out things and how you can help each other make more money. Headcount deliveries. Like some. Sometimes I've seen come out of that meeting. Like a shuttle driver. Also could be a parts driver, and they can split overhead that way.

Or parts driver can shuttle. Yeah, the back and forth part of it.

There's a lot of synergy if you want there to be. And support people, all of that.

Yeah. This is a really good time for me to talk about one of my mentors, Steve, who you know, my general manager way, way back in the day. We had fun.

I'm gonna say his last name.

Steve Camp. Love him. Steve. Sharp dresser, sharp dresser, great dude.

Great leader, total gentleman.

Our genius, for sure.

So, no, you might have gone too far. Car genius. Like, he designs cars. He sells cars.

What about just the car business? That he's a genius in it? Is that fine?

Well, you're implying that he can design a car.

That's how you receive the message. Not necessarily how I sent it, but. So Steve had a. He's like, what the hell are those two people talking about? But. But we had a meeting every month, and all department heads. So new car, used car parts, and service all had to get together. We all got the statement a few days before the meeting. And our job Was not only to look at our own department. We then had to talk about what suggestions we had for the other department. So it forced that interaction. And so I was looking at the used cars, and I'm like, okay, so here's where the expenses not matching up here. This gross margin looks a little bit low. So as a service manager, I was making suggestions to sales. The sales manager was making suggestions to parts, and we all literally was kind of like training for becoming a general manager because you learned how the whole thing worked, but, like, the way that the department heads came so close and, like, they looked at themselves as a cohesive unit after that, it was a. It was a genius thing. So I've seen this work before. The long story short. Yeah.

And I think I went to one of those.

You did.

Yeah. And also I think that's where I learned that you had been in sales.

Yeah.

And wasn't it Steve that encouraged you to go to service?

Yes.

Yeah. I remember having that conversation with the two of you, because I think I knew you a little while before I knew that.

Yeah. I don't think that we. It definitely isn't something usually a little.

Later in the game. And it kind of surprised me.

Yeah. I liked the sales side, but I wanted to be a general manager, and I just. I didn't know anything about service or parts, and I needed to learn.

Yeah.

So I'm super grateful for the way that my journey came out, and Steve was a big part of that. Yeah.

But if, like, if you just think about this, you guys, like, if you.

Both sit down parts in a service manager, and you're like, hey, we're going to look at this. How can we. How can we do better? And you're helping each other. Just the energy and focusing the. The light. You know, whenever you shine a light on something, it's going to get brighter, it's going to have energy, and it's going to get better. Just the act of you guys dedicating two hours a month to that will. Will have incredible outcomes. The outcome will be incredible. You got to consistently do it. You got to put it on your calendar. But it's magic. Like, especially the collaboration, like, most of the time you're kind of alone in that. So having somebody that will be a friend and give you another opinion on things or push you, where you kind of are like, I know I should do something there, but I don't want to get rid of them or whatever. Having that kind of accountability person.

I agree with that 100%. And it's a vested interest in each other too. I mean, this is probably going off the beaten path, but I would say that for general managers out there, I would seriously consider pay plans where parts and service were tied to each other too. For the management should be a little nubbin for the well being of both departments.

Thanks so much for watching this clip of Service Driving Revolution. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 Ask SDR and we'll answer your question on the show. That's 8333 Ask SDR. For special deals on our books and training, head over to offers Chris Collins Inc.com now that's offers.chriscollinsinc.com I'm Chris Collins and I'll see you in the next video.