For 3 industry-leading dealerships, managing the service department is an ongoing balance of implementing processes while also remaining open to change.
“I suggest creating a parts and service booklet with core programs and promotions because it’s a great refresher for the high-tenure employees and a good reference for new employees, but just make sure you allow it to evolve,” says Chad Stoline, corporate service manager at John Deere dealership Van Wall Equipment. “Our business changes. People change. Technology changes. You’ve got to revisit that thing. Don’t let it become prehistoric.”
During the 2022 Dealership Minds Summit, Farm Equipment brought together representatives from Dealerships of the Year Van Wall Equipment (2016), Sydenstricker Nobbe Partners (2021) and Johnson Tractor (2012) to share the best practices that elevate their service departments. Panelists included Stoline, who represents Van Wall’s 25 ag stores; Chad Schaffter, director of aftermarket at Sydenstricker Nobbe Partners, a 27-store Deere dealer spread across 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.
Dealership of the Year Q&A
Q: How do I implement the dealership process at a new store without the employees feeling like it’s being shoved in their lap?
Chad Schaffter: The biggest thing I found is when you do make that change, you really have to explain the why.
Eric Reuterskiold: We don’t change to change — we only improve. If their process is better, then we will adopt their process.
Chad Stoline: I would say don’t go in and recreate the wheel on day one. Go in, be in the store, witness how it functions, watch it work and learn. It’s more be quiet, and use your ears and your eyes.
As these dealers will attest, creating uniform processes is a time-consuming but worthwhile endeavor that requires communication across departments and store locations.
Stoline and two other managers at Van Wall wrote the service processes. Early on, they introduced the process book to a store that didn’t have a lot of involvement in the writing of it, and the store’s employees pushed back hard.
“I was lucky enough to only do this at one location,” Stoline says. “[After that], we sent questions to our other locations. They understood what we were doing and had involvement.”
The questions went to approximately 15 service managers with more than 10 years of experience, as well as a few car dealers to get outside perspectives.
Stoline used everyone’s answers to write the service books, which exist as Google Docs. The books have been especially helpful for new employees, who can be directed to one central location to search for answers.
“It took a lot of effort, but in the end, it’s been a good tool for our employees,” Stoline says. “I try to find new ideas every time I go somewhere, and if new stores have a process that’s better than what we had, we get them on the Google Doc and implement them. We feel like let’s let one person make the mistake, so the other 200 don’t have to.”
Sydenstricker Nobbe had 8 months to plan before merging 2 dealership groups, giving management enough time to review processes at 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 management to implement and execute the direction and change.
Johnson Tractor is following a similar path as it starts to create a standard operating processes manual. Reuterskiold says one person is serving as a chair and writing the manual after talking with leaders in each of the dealership’s departments.
Once processes are in place, a dealership can monitor metrics to assess performance and spot changes that need to be made to improve the service department’s processes and efficiency.
Sydenstricker Nobbe uses dashboards to measure key metrics and generate performance plans for stores and technicians. The performance plans set expectations and base pay rates, and the dashboards make it easy to identify issues. Schaffter says the service departments review the dashboards daily, weekly and monthly.
“If new stores have a process that’s better than what we had, we implement them…” – Chad Stoline, Van Wall Equipment
“We can see, from a high level, that we have a problem at a store,” Schaffter says. “From there we start diving into the details and figuring out if it’s a productivity or efficiency gap. Same with our technicians. We look at where the gaps are, and how we can address those issues.”
Reuterskiold starts by looking at the financial statement, sales and net profit to get a general idea about what’s happening at Johnson Tractor’s stores. If he identifies a department that’s starting to slip, he’ll dive into the data on individual technicians and their efficiency.
A few years ago, he noticed one of the dealership’s best technicians was becoming less efficient. He went to the tech’s manager and found out the tech was starting to mentor the new hires.
“His efficiency started to drop off, but it wasn’t because he was doing a bad job. It’s because he’s helping out all these other people,” Reuterskiold says. “There are things you have to dive into because on paper, they don’t tell the story. That led to that particular technician becoming a service manager.”
Van Wall has been making an effort to look at the intangibles behind profit and technician performance numbers. Stoline says leadership assesses how store culture, management, communication and customer engagement impact their bottom line.
“It’s hard to gauge, but we spent some time asking, does the store and culture feel good? Is that why the store is not performing?” Stoline says.
Van Wall measures applied time (productivity) to track technician performance. Stoline says the dealership noticed it was short 10% applied time over the course of the year — the equivalent of a few thousand hours — and decided to monitor what people were doing every day to find out where time was being lost. Management allocated a technician’s time in a daily time sheet and, in doing so, cut the productivity gap in half in 6 months.
Van Wall and Johnson Tractor have an open-book management philosophy and share financials with everyone from managers to technicians. Reuterskiold says Johnson Tractor’s service meetings include a complete 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,” Reuterskiold says.
Click here to watch the full dealer-to-dealer panel “Dealership of the Year Alumni Group Service Best Practices” from the 2022 Dealership Minds Summit. This and all the Summit session videos are brought to you courtesy of DeLaval.
Van Wall’s managers work together to create a billed hour goal based on each technician’s past performance. The store’s billed hour goal multiplied by the current shop rate results in the net labor sales goal for the year. The techs see the numbers every month, giving them a better understanding of purchasing decisions and the effect of their work on the dealership.
Sydenstricker Nobbe has had a lot of churn in the service office in the last few years, Schaffter says, because the dealership is trying to put the right people in management positions. It led to “a lot of immaturity” in understanding financials, Schaffter says, so the dealership is currently focused on gross margin as the first step in teaching financials. Incentives are tied to sales gross margin performance, and the service managers are learning how everything from labor performance to service accessories affect gross margin.
“In the future, we’ll start bringing in contribution margins all the way down to fixed and net, but as an organization, we’re not to that point,” Schaffter says. “Right now, I monitor everything from a variable and fixed standpoint to make sure we’re on track and on budget.”
All 3 dealers say open communication leads to trust across departments.
“Anytime I go to a location, no matter how quick my visit, I try to visit with every employee at that location,” Reuterskiold says. “I try to convey that I care about you and your family. That sets the culture for them, especially our managers. That trickles down to how they interact with their people.”
He challenges everyone at Johnson Tractor to come up with solutions, rather than complaints. As the dealership has grown, he’s realized people can only tolerate so much needless change.
“Quit making changes, and make improvements instead,” Reuterskiold says. “Don’t make a change to make a change. If you can do something to improve, then make an improvement.”
Stoline also encourages Van Wall’s managers to make decisions right for their store — knowing they have the support of the corporate team.
“We are trying to promote our managers to think through situations,” Stoline says. “If they have a situation, also bring a solution. We’re going to back your decisions.”