Jul. 13, 2009 – Bold Idea No. 2: A specialist who can cut expenses and boost sales
July 13, 2009
Filed under Features
A dealership in BikeTown, Ohio, has implemented a process that reduces its parts and service departments’ staff by half but doubles its P&A sales through service.
Harley-Davidson Bike Town Dealer Principal Tom Wronkovich says through this concept, called PALS (Parts and Labor Specialist), he was able to increase efficiency and still provide exceptional customer service.
PALS combines parts staff and service writers into one position, making the process smoother for both the customers and employees. A PALS employee, who is trained to sell P&A as well as schedule bikes for service, acts as one point of contact for a customer.
The process came about because Wronkovich noticed the service writers were busy in the early morning and later afternoon, while the parts associates were busiest from 10 a.m.-4 p.m. From that information, Wronkovich and longtime dealer consultant Mel Selway, president of P.A.R.T.S., brainstormed the concept.
Due to the PALS being trained in both positions, it has increased the number of parts and accessories being sold per repair order.
“That’s a big thing because the most profitable item we sell in this store is an hour worth of labor,” Wronkovich said. “When a customer comes in, they assume that we’re going to sell that part. Now the customer assumes we’re going to install that part as well, so it’s worked out well for us. We’ve seen some huge, huge increases in parts being sold to repair orders, which is incredible.”
Getting staff onboard
Since PALS have a more diverse role, it takes more time to get them trained, says Wronkovich.
“He or she is learning not only what parts go on the motorcycle, but they also have to be able to quote labor times and service oriented-type questions,” he said. “We need a good six months to where they’re decent, and it takes a full year to where they’re in full stride.”
It’s worth the extra training because Wronkovich says they have a higher retention rate with the new position, which can be partially attributed to higher pay.
“If the PAL sells just a part over the counter, he makes 3 percent of that gross profit,” he explained. “If he actually sells it to a repair order, we double it.”
The higher pay was a way to get employees on board because Wronkovich says at first there was some pushback.
“Anytime you have a change,” he said, “we anticipate some fallouts, which actually worked out pretty well.”
One way to get the employees onboard was showing them their paychecks if they would have been a PAL.
“This is your paycheck this time around. This is your paycheck if you would have been a PAL,” Wronkovich said. “You run those for like three or four months, every time they get paid. All of a sudden, they’re going, ‘Why wouldn’t I want to do that?’”
Another challenge was figuring out how many PALS were needed.
A typical dealership Bike Town’s size would have at least three parts people and two-three service writers, but Wronkovich notes they now only have three people total.
Once the program got under way, Wronkovich called Selway again with the concern of the PALS’ workload. “He and I talk on the phone quite frequently,” Selway said, “just bouncing ideas off each other.”
The two then developed the PALS Gatekeeper. He or she answers the PALS phone and filters the calls by asking the customer CRM questions before transferring, if needed, the call to the PALS. Selway says Wronkovich and his team brainstormed FAQs the gatekeeper could answer, which helped with the efficiency issues.
“I find that in a lot of dealerships they’re reluctant to have a separate cashier or have someone do the administrative tasks,” he said. “If I’m a seller, I need to be selling.”
To also heighten efficiency, the dealership created a PALS hotline, says Wronkovich.
“You can call (the PALS) directly and dial right into the parts department as opposed to going into our switchboard operator,” he noted. “It was inefficient when they’d call in on the telephone, where they would get transferred several times to the point of frustration. The call transfer thing was just huge.
“You sold all these parts, you get the bike in, but now all the service writers are on the phone,” he continued. “The PALS have the schedule right in front of them, when the bikes can be scheduled, the times they’re available, when it can be picked up. It’s real time. They can track things much more efficiently.”
As customers grow accustomed to the process, Wronkovich says often times they’ll only talk to specific PALS because they know the customer’s history. When that happens, PALS are more inclined to introduce new products to customers who’d be most likely interested.
“‘So and so just got this Street Glide, he’d really like this,’” Wronkovich said of the PALS. “They’ll e-mail or call him, stay in some sort of contact with him.”
A key to implementing PALS
An important factor to making the PALS concept successful is having the correct layout of the dealership. At Harley-Davidson Bike Town’s previous location, Wronkovich says there was a small gap between the parts counter and service department.
“Mel (Selway) is very big in terms of efficiencies: how many steps have we taken, keystrokes, the whole nine yards,” he said. “We looked at that when we were designing this store. Right off the bat that was one of the challenges. People probably had to walk another 15 feet at the old store, and here they literally drive right up to the parts counter. The first PALS station is maybe
6 feet, if that, from where they ride the bike in.”
It can work without the parts and service departments right next to each other, but Selway says it’ll most likely take customers longer to get accustomed to the PALS process.
“If your dealership is set up where parts is in one segment of the building and service write-up is 150 feet away, rather than around the corner, it might be more difficult,” he noted. “I talked to (another dealer), and he said he started implementing a version of the PALS concept after I mentioned it to him. He said even though he has separate barriers, the customers are getting more acclimated to come to the parts counter and the staff takes care of them at that position.”
To help customers get accustomed to the PALS concept, Wronkovich says they designed a handout that explained what the dealership was doing and why, as well as the benefits for the customers.
“It’s proprietary to our store,” he said, “and it’s something that makes us different and sets us a part. We keep promoting that.”
— Karin Gelschus