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BG Products LPP- Scarff Testimonial Ad - October 2010 Placement Dealer Magazine Full Page - 8.25” x 10.75” Full Bleed - 8.5” x 11”
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BG Products LPP- Scarff Testimonial Ad - October 2010 Placement Dealer Magazine Full Page - 8.25” x 10.75” Full Bleed - 8.5” x 11”
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The Puget Sound DealerOfficial Publication of the
Puget Sound Automobile Dealers Association16101 Greenwood Avenue N Bldg 2100
Seattle WA 98133Phone: 206 542-3551Fax: 206 542-7561
Email: [email protected]
PresidentSue ByersBob Byers Volvo, Seattle
1st Vice PresidentJason CourterHonda Auto Center of Bellevue
2rd Vice PresidentJim MorinoAcura of Lynnwood
3rd Vice PresidentSara CarterCarter Subaru, Shoreline
Immediate Past PresidentCraig CampbellCampbell Nelson Volkswagen, EdmondsCampbell Nelson Nissan, Edmonds
TrusteeSteve KleinKlein Honda, Everett
Mike ScarffMike Scarff Subaru of Auburn
PSADA StaffJames R. HammondExecutive Director
Ron OlsonA-YES State Manager
Joyce NicholsExecutive Assistant
Linda HalversonOffice Manager
Susan LeonhardiSecretary
A Message from the Editor
What Turns Service Customers Away?
InsidethisIssue
For information on advertising in this publication contact
Jim AitkinsBlue Water Publishers, LLC
360.805.6474
7 Message from the President - Sue Byers8 Unraveling Overlapping Employee Leave Laws13 Outstanding Dealership Ideas!15 Improving Performance With Objectives17 Poorly Trained Customer Service Personnel Cost You Money!19 Tasks To Do Before Year-End23 Gary Micallef - You Gotta Come See Him25 Introduction to Cash Reporting27 Torque Certification - Why Your Techs Need It29 What Type of Questioner Are You?33 Beware of Your Default View Settings34 Operational Best Practices37 Solutions for More Secure Retirement Plans38 Cash Flow Timing and Best Practices43 Carter Subaru Recognized as AYES National Dealer of the Month
Many, many years ago at the NADA Convention, one of the Super Workshops was on “How Your Service Department Answers the Telephone.” It was a startling and eye-opening session. The trainer had a live phone on the stage. He asked the dealers: “If you called your service department right now, would you like how you were received?” Then he got a lot of them to go on stage and make the call. There is nothing like a first-hand experience. He made believers out of the crowd when he said that 65-70% of people calling in won’t bring their car in for service because of the way they were treated on the phone. Is this true? Not for everyone, but, it is true for a lot of companies, not just dealer-ships. For over ten years PSADA’s Service Advisor class has been collecting data with its “Mystery Phone Shopper” segment. The data base, comprised of hundreds of participants, supports the data reported in that NADA Convention Super Work-shop. Two out of every three people said they would not bring their car in for service because of the way they were treated on the phone. So what happened on the phone? Here are recurring comments from the research: person on the other end made me feel stupid; was transferred five times; put on hold for over ten minutes; person on phone was in a hurry, didn’t want to talk; not helpful at all; very rude and intimidat-ing over the phone; was told gruffly, “This is not going to happen today!”; phone not answered even after 30 rings; and, not courteous. These are real answers. We have all had these experiences elsewhere, but we don’t want them to happen in our stores. The telephone is probably the most important business tool of all time. A little training with telephone and people skills can go a long way with the bottom line. So, how are your people receiving your customers on the phone?
James HammondExecutive Director
Cover photo by Adam Buchanan
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FJoyce Nichols Retires –
We Will Miss You!
Message from the President
Sue ByersBob Byers VolvoSeattle
For the past 16 years one of the most familiar voices to dealers in Puget Sound has been the voice of Joyce Nichols, Jim Hammond’s Executive Assistant at PSADA. Over the years Joyce has answered thousands of phone calls from dealers and key dealership employees about their employee handbooks, the PSADA Wage and Benefit Analysis, the Seattle Auto Show and many other important association programs she helped create or improve. She has always been helpful, precise, specific and accurate. Joyce’s judgment and standard of excellence has helped PSADA become the nationally recognized association that it is today.
But Joyce’s history with PSADA goes back much farther than 16 years ago. In 1978, when she was employed at Shoreline Community College, she attended the first meeting that created the partnership between PSADA and the college. As part of the college’s Continuing Education Department she was involved in the scheduling of all of PSADA’s early dealership classes like Service Advisor and Title Clerk Training. Later, as the assistant to the Vocational Director, Joyce was part of the team that planned the Professional Automotive Training Center. As the assistant to the Vice President for Academic Affairs, Joyce was involved with the development of key automotive curriculum for our technical programs. Shortly after she retired from Shoreline, she went to work for PSADA. Joyce’s contribution to PSADA and its mission to serve our dealers is extensive and exceptional.
In January 2011 she will begin her well-deserved retirement. Joyce, we will miss you. Thank you for your many years of dedication and passion for our dealers. We wish you a wonderful retirement.
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TThe authors of Family Leave Laws, Disability Laws, Workers’ Compensation Laws, Military Leave Laws, and Pregnancy Leave Laws, both federal and state, have not coordinated with each other as to how the different leave laws would interrelate with each other. Not only do the federal laws not take into account the various state laws, including those of Washington State, but employers are left with looking at each and trying to determine how to calculate leave for the affected employees.
The principal federal laws are the Family Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). In Washington we have a similar family leave act and disability leave act, namely the Washington Law Against Discrimination (relating to disability) and the Washington Family Leave Act (WFLA). In addition, in Washington we have the Washington Family Care Act (WFCA), Pregnancy Disability Leave (PDL), the Washington Military Family Leave Act (WMFLA) and Domestic Violence Leave (DVL). If you also consider our comprehensive workers’ compensation laws, employers can be easily overwhelmed when attempting to navigate the various disability, family leave and injured workers laws.
The following is a brief synopsis of these laws and how employers can best consider situations involving their employees.
I. Washington Law Against Discrimination/DisabilityThe Washington Law Against Discrimination prohibits employers with
eight or more employees from discriminating on the basis of disability. Washington courts have held disability discrimination contravenes a clear mandate of public policy. Accordingly, Washington courts have held an employee can bring a disability discrimination claim even when the eight-employee threshold is not met and the employer has less than eight employees.1 The Washington State Human Rights Commission (“WSHRC”) defines disability for purposes of determining whether an unfair practice under RCW 49.60.180 as follows:
The presence of a sensory, mental, or physical handicap includes, but is not limited to, circumstances where a sensory, mental, or physical condition:
By James M. ShakerRyan, Swanson & Cleveland
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1. Is medically cognizable or diagnosable;
2. Exists as a record or history; or3. Is perceived to exist, whether
or not it exists in fact.The presence of a “disability”
requires both (1) an abnormal condition and (2) employer discrimination because of that condition.2 Under Washington law, a disability is a sensory, medical or physical abnormality that has a substantially limiting effect upon the ability to perform the job.3
In contrast to the ADA, Washington law does not inquire whether the impairment substantially limits a major life function. The Washington definition of disability is much broader than the ADA’s definition and covers medical conditions that are temporary or of short duration.
II. Americans with Disabilities Act (“ADA”)
The ADA, 42 U.S.C. § 12101 et seq., in Title I prohibits discrimination on the basis of disability in employment. Over 43 million Americans have one or more physical or mental disabilities. Employers with 15 or more employees, governmental agencies and labor associations are prohibited from discriminating against a qualified individual with a disability based on their disability and are required to provide “reasonable accommodations” to permit the disabled to work and advance in careers.
Employers covered by the ADA may not “discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring or discharge of employees, employee compensation, advancement, job training, and other terms, conditions and privileges of employment.”
The ADA is intended to protect both disabled applicants and employees
from unlawful discrimination. Unlike other anti-discrimination laws, where it is relatively easy to determine whether an individual is part of a protected class, such as age, gender, race or religion, determining coverage under the ADA has proven to be a complicated task. Applicants or employees are covered by the ADA if they are qualified individuals with a disability, meaning they can show that: (1) their circumstances satisfy one of three definitions of disability; and (2) they are qualified to perform the job with or without reasonable accommodation. The ADA does not require employers to hire or retain individuals who are not qualified to perform a job.
The ADA defines an individual with a disability as an individual who:
1. has a physical or mental impairment that substantially limits one or more of his/her major life activities;
2. has a record of such an impairment; or
3. is regarded as having such an impairment.
42 U.S.C. § 12102(2).
III. Family Medical Leave Act (“FMLA”)
The Family Medical Leave Act (“FMLA”) allows 12 weeks of protected time off for employees with a serious health condition, family member’s serious health condition, parental leave, or service members under a qualifying exigency leave (26 weeks). The FMLA covers employers of 50 or more employees in the United States, and all employees are counted including full-time, part-time, seasonal and temporary. However, the employee must have worked for the last 12 months a minimum of 1250 hours. In addition, there are certain requirements regarding the location of 50 employees within 75 miles of each other.
Employees may take leave for their own serious health condition, a family member’s serious health condition, parental leave, or if a family member is called to active duty (qualifying exigency or injured on active duty). The FMLA exception is that it can be increased to 26 weeks of leave to care for family members injured while on active military duty, including up to 12 weeks for any qualifying exigency related to a family member called to active duty.
IV. Workers’ Compensation as it Relates to FMLA
The definition of a “serious health condition” under the FMLA and the qualifications for time loss under the Washington Industrial Insurance Act (workers’ compensation) are congruent. In order to get time loss, an injured worker must be absent from the job three days or more because
of the industrial injury and have a doctor certify the industrial injury is the cause of the absence. Under the FMLA, the definition of a “serious health condition” is one which causes the worker to be absent for more than three days and for which the worker is under the care of a physician. Therefore, when a worker is out on workers’ compensation and is out for three days or more, an employer should automatically put them on FMLA leave. The Department of Labor’s final FMLA regulations allow for this piggybacking FMLA and workers’ compensation time loss.
The Washington definition of a disability is much broader
than the ADA’s definition and covers medical conditions
that are temporary.
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V. FMLA, ADA and Washington Law on Disabilities
The definition of a serious illness under the FMLA may or may not be congruent with the ADA’s definition of a disability. The ADA defines a disability as a physical, mental or sensory impairment which significantly affects
a major life activity. If the worker is on FMLA leave for his/her own serious illness, rather than that of a family member, the worker’s medical condition, its permanency and its effect on major life activities will determine if it is a disability under the ADA. For example, a worker who is on FMLA leave
because she has had a hysterectomy would probably not be a person with a disability under the ADA. She does have a condition which affects a major life activity, reproduction, but it has no effect on her ability to perform the essential functions of her job in the future and it is not an “impairment.” She merely is
Americans with Disabilities Act (ADA)
Washington Law Against Discrimination (WLAD)
Family Medical Leave Act (FMLA)/Washing-ton Family Leave Act
(WFLA)
Washington Family Care Act (WFCA)
Pregnancy Disability Leave (PDL)
Washington Military Family Leave Act
(WMFLA)
Domestic Violence Leave
15 or more Employees 8 or more Employees 50 or more Employees n/a 8 or more Employees n/a n/a
ADA Definition of Disability:A physical or mental impairment that substantially affects one or more major life activities
ADA Definition of Major Life Activity:
includes “the operation of a major bodily function” which includes, among other functions and systems, the following: immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.
ADA Definition of Qualified Individual with a disability:A person who can perform the essential functions of the job with or without Reasonable Accommodation
Exception:“undue hardship”“direct threat to safety”
WLAD Definition of Disability: a)“Disability” means
the presence of a sensory, mental, or physical impairment that:(i) Is medically
cognizable or diagnosable; or
(ii) Exists as a record or history; or
(iii) Is perceived to exist whether or not it exists in fact.
b) A disability exists whether it is temporary or permanent, common or uncommon, mitigated or unmitigated, or whether or not it limits the ability to work generally or work at a particular job or whether or not it limits any other activity within the scope of this chapter.
Leave Period: 12 weeks
Circumstances1. Employee’s serious
health condition (including pregnancy disability)
2. Serious Health Con-dition of a Family Member
3. Parental Leave4. “Qualifying Exi-
gency” which relates to military leave. Active duty all up (FMLA only)
5. Care for a family member or next of kin injured or ill as a result of active military leave (FMLA only – Note: 26 weeks a year)
Eligible Employees may use paid time off to care for a sick family member
1. Children younger than 18 with health conditions that require treatment or supervisor,
2. Adult children in-capable of self care because of mental or physical disability, and
3. Spouse, parent, parent-in-law, or grandparent who has a serious health condition or an emergency condition
Protected leave for entire duration of incapacity due to pregnancy or childbirth
Eligible Employees: those who work an aver-age of 20 or more hours per week
ALL Employees (no mi-nors # of Employees)
15 days of unpaid leave per “military deployment of a spouse”
15 days run separately for WFLA but concur-rently with FMLA “quali-fying exigency” leave
Uniformed Services Em-ployment and Reemploy-ment Rights Act of 1994 (USERRA)
Prohibits discrimination
No minimum number of employees
Eligible Employee: one who is a victim of domestic violence, sexual assault or stalking / or employees who are family members of such victims.
Purpose – to address legal, financial and health care needs
No minimum required hours worked
Overlapping Employee Leave Laws
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Americans with Disabilities Act (ADA)
Washington Law Against Discrimination (WLAD)
Family Medical Leave Act (FMLA)/Washing-ton Family Leave Act
(WFLA)
Washington Family Care Act (WFCA)
Pregnancy Disability Leave (PDL)
Washington Military Family Leave Act
(WMFLA)
Domestic Violence Leave
15 or more Employees 8 or more Employees 50 or more Employees n/a 8 or more Employees n/a n/a
ADA Definition of Disability:A physical or mental impairment that substantially affects one or more major life activities
ADA Definition of Major Life Activity:
includes “the operation of a major bodily function” which includes, among other functions and systems, the following: immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.
ADA Definition of Qualified Individual with a disability:A person who can perform the essential functions of the job with or without Reasonable Accommodation
Exception:“undue hardship”“direct threat to safety”
WLAD Definition of Disability: a)“Disability” means
the presence of a sensory, mental, or physical impairment that:(i) Is medically
cognizable or diagnosable; or
(ii) Exists as a record or history; or
(iii) Is perceived to exist whether or not it exists in fact.
b) A disability exists whether it is temporary or permanent, common or uncommon, mitigated or unmitigated, or whether or not it limits the ability to work generally or work at a particular job or whether or not it limits any other activity within the scope of this chapter.
Leave Period: 12 weeks
Circumstances1. Employee’s serious
health condition (including pregnancy disability)
2. Serious Health Con-dition of a Family Member
3. Parental Leave4. “Qualifying Exi-
gency” which relates to military leave. Active duty all up (FMLA only)
5. Care for a family member or next of kin injured or ill as a result of active military leave (FMLA only – Note: 26 weeks a year)
Eligible Employees may use paid time off to care for a sick family member
1. Children younger than 18 with health conditions that require treatment or supervisor,
2. Adult children in-capable of self care because of mental or physical disability, and
3. Spouse, parent, parent-in-law, or grandparent who has a serious health condition or an emergency condition
Protected leave for entire duration of incapacity due to pregnancy or childbirth
Eligible Employees: those who work an aver-age of 20 or more hours per week
ALL Employees (no mi-nors # of Employees)
15 days of unpaid leave per “military deployment of a spouse”
15 days run separately for WFLA but concur-rently with FMLA “quali-fying exigency” leave
Uniformed Services Em-ployment and Reemploy-ment Rights Act of 1994 (USERRA)
Prohibits discrimination
No minimum number of employees
Eligible Employee: one who is a victim of domestic violence, sexual assault or stalking / or employees who are family members of such victims.
Purpose – to address legal, financial and health care needs
No minimum required hours worked
recovering from a surgery. However, if the worker is on FMLA leave because she has breast cancer, her ability to perform the essential functions of her job in the future may be affected, depending on her job and her future treatment and prognosis.
Regardless of whether the worker’s
serious health condition meets the ADA definition of a disability, the FMLA states that a worker does not have to return from FMLA leave, assuming he/she has some of the 12 weeks left, until he/she can perform all of the essential functions of his/her job. The FMLA leaves out the fundamental ADA
qualification of “with or without accommodation,” which could place the employer in a difficult situation under the FMLA if it tries to get the worker back to work with an accommodation. However, the employer is in just as much trouble under the ADA if it does not offer a reasonable accommodation! Recent case law indicates an employer must go through the ADA analysis even if it is a futile exercise.
Washington law defines a person with a disability much more broadly than the ADA. In Washington, a person has a disability if he/she has a medical condition which is abnormal and diagnosable. Every worker on FMLA leave for his/her own serious health condition qualifies as a person with a disability, since he/she must have an abnormal, diagnosable condition in order to receive FMLA leave. He/she is entitled to full time or intermittent FMLA leave and also entitled to accommodation for the aspects of his/her illness which affects the ability to perform the essential functions of his/her job.
Because of the confidentiality requirements of health information under both the FMLA and the ADA, all such information should be kept under lock and key separate from the employee’s personnel file. All health information, whether workers’ compensation related or FMLA/ADA related, should be kept in
the worker’s confidential health file and reviewed only by those who need to know. Supervisors who are not involved in FMLA decisions should not have access to the files and should have only limited access when the company needs to make an accommodation.
continued on page 30
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FFor the past four years, the Moss Adams Dealer Services Group has hosted a two day workshop for CFO’s and Controllers. One of the sessions that have made the workshop successful year after year is the best ideas that come from the attendees. Below is some sampling of the best ideas from the 2010 workshop:
Efficiencies/Technology• Dual monitors for accounting staff and optional
for managers. This can increase staff efficiency and production by being able to easily work with multiple programs or pages at once.
• Remote Deposit Capture - Checks are scanned in office and uploaded to the bank account immediately.
• ADP Scanning/Archive – Ability to retrieve bills/documents immediately and less hard copy record retention. Used for payables, quarterly returns, repair orders, etc.
• ACH payment structure for vendors - Allows more controls around checks, etc.
• Implementation of a sales program which identifies customers who are eligible to trade in their existing car for a new vehicle while lowering their payment.
• Automate accounts payable and earn reward points:Implementation of a software program/service which automates accounts payable processes that submits payments via credit card. The result is increased efficiency and accuracy along with the reward points the company receives by using a credit card which is then used for various prizes, bonuses, travel, etc.
Cost savings and procedure updates• Cell phone allowance – Replaced the company plan
with a stipend to all sales staff and managers which alleviated having to scour through bills. A smaller plan was retained for the owner and a few mobile technicians (night).
• Health insurance renewal/ mandatory health insurance coverage – All employees are required to have at least the catastrophic plan but can buy up to existing plan at reduced premiums.
• Developing a system/process for tracking and monitoring discounts and coupons in the service department:
A good system will include the ability to report totals and account details by service advisor for a given date range, sort or sub-sort from the highest dollar amount to lowest and check for anomalies. The key is comparing each service advisor’s total discounts to their total customer pay labor sales as a percentage and checking that it is in line with the dealership expectations or industry benchmarks.
• Quick tips to assist with prevention of bank account fraud:
o Pull the bank reconciliation from the previous month. Did all of the outstanding deposits clear the bank in the current month?
o Review that every outstanding reconciling entry has a hard copy attached to the reconciliation for comparison (such as the sweep account).
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By Dan Cheyney, CPAMoss Adams, Dealer Services Group
Continued on page 40
In 10 seconds you have your approval, and 93% of all customers are approved(The customer is only turned down if they have been bouncing checks or have a judgement against them for bouncing checks)
So what’s it cost to stop losing repair orders by offering OkEZpay90day?You make a one-time investment for a check imaging system and software and you own it. That’s it! No
other charges and you can off er a 90 day easy payment plan to your customers.What does the easy payment plan cost the customer?The program charges the customer a 12% program fee.*
NEVER LOSE ANOTHER REPAIR ORDER AGAIN BECAUSE THE CUSTOMER SAYS THEY CAN’T PAY!
Off er your customer an easy payment plan for $250 to $5000 for the service work.
We call it OkEZpay90dayAnd here’s the best part: your dealership gets paid within 96 hours of the
maturation of the customer’s checks…and the checks are GUARANTEED! No risk to you, and you get their repair order and profits you would have lost!
OkEZpay90day.com 877-741-7886Or email Mike Conley at [email protected]
All they need is:• Valid checking account with printed checks• Valid Drivers License, State ID, or Military ID• Proof of income (like a paycheck stub)
No Credit Check!
Fast and Easy Process:In this payment plan multiple post dated checks are converted to ACH upon maturity.1. Your service writer has the customer fill out and signs a payment authorization form.2. Your customer writes post-dated checks for up to 90 days 3. You verify checking account, license and proof of employment/income.4. You scan their post dated checks. 5. Customer signs the receipt.6.
When your customer needs an easy payment plan for a repair, its fast and easy!
*Not financing or an interest charge
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We know that one of the best ways to improve performance is to measure it, share the “numbers” with the performers, then have them set objectives to achieve higher “numbers.” We do this every month in Sales and Service, but what about in the other areas of the dealership? Could we effectively use “objectives” to improve performance in the office or other administrative areas? Consider having your administrative staff measure the following, post the results on the wall, then try to beat the “number” each month:
• How long it takes each month to get the statement out (also look at how long it takes to get in each of the “numbers” from each of the departments that are needed to finalize the statement)
• How long it takes to complete the payroll
• How quickly accounts receivable are collected (…especially for those “overdue” accounts!)
• How quickly warranty claims are submitted after completion of the work
• …you get the idea
By John Strom
Not only will you want to look at establishing objectives in the “how quickly” areas, also consider all the “how much” and “how accurate” measurements. Are there areas where they could “do more” or “do it with greater accuracy”? The more you measure, share the “numbers” and work to improve, the more things you’ll improve.
• How many more “x” can be done in “y” time (increased numbers)
• How much more accurate can you be in doing “z” (fewer errors)
And do you think if you rewarded improving the “numbers,” your folks would work harder to improve them? We use “spiffs” in Sales and Service to motivate improved performance, why not do the same for the administrative support people? (Money’s always appreciated, but also consider other incentives they might want to work for – ask them what they’d like!). A little “investment” each month could really pay off!
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Improving Knowledge and SkillsOne of the areas where most
organizations really miss the boat is in working with individuals each month to improve their knowledge and skills. I’m not talking about the “numbers” here – “how many you’ll sell” or “how much profit will result”. I’m talking about “how capable” and “how skillful”. In addition to setting the usual monthly business objectives for sales and profits, have each person set an objective to:
• Learn something that will help them in their job (e.g. product knowledge, mastery of a process, how things relate to each other, generally how things are done – perhaps outside of their daily work)
• Increase their proficiency in a key skill set (e.g. asking better questions, reflective listening, overcoming customer concerns, explaining something technical so it can be more easily understood)
The improvement focus could be on knowledge and skills related to the job they currently hold or for a future job they (…and you) see potentially doing (this job may be a lateral move or a promotion). Obviously it’s important for them to work on improving knowledge and skills related to their current job first. It’s this second focus most organizations too often ignore.
The best organizations are always preparing for growth and for turnover. They do this by constantly working with their people to have them as ready as possible to “step into” their next job. For example, many technicians see themselves becoming ASMs or Service Managers in the future. Sales Consultants want to be Finance or Sales Managers. What knowledge and skills should they be “learning now” so “they’ll be ready for the job” when it becomes available?
Setting the Stage for AdvancementOne of the areas I always stress
when I work with people who want to get ahead is to have a clear picture of what they’d like to do next and to “always be working to be prepared” for that next job.
• What will you need to know to be successful? What are you doing to learn it?
• What skills will you need to have? How are you acquiring these?
I believe it is every manager’s responsibility to continuously be developing their peoples’ knowledge and skills in addition to improving their “numbers”. This means regular (at least monthly) discussions about what they’re learning and how they’re preparing for what’s ahead (…for them and for the organization). Managers need to have each person setting a “Professional Development Objective” each month, just as they set other performance objectives for the month. Discussions during the month about success achieving this objective are held just as they’re held about achievement of their business objectives. And a celebration of success is appropriate for the achievement of these objectives, just as we celebrate achievement of the business objectives.
One of the side benefits of this focus on individual professional development is that people will stay with your organization. Research indicates that most young people today place a high value on this type of development and if you’re helping them be more valuable, they’ll appreciate it and you’ll both benefit.
As an organizational leader, you’ll also want to be sure your managers are “developing their successor.” You (…and they) don’t want to be in a
situation where you’d love to promote them, move them to another of your dealerships, but you feel they’re too valuable where they are. As I’ve said to many a manager looking to advance,”if you’re irreplaceable, you’re also unpromotable.” (And remember, when you get promoted, you’re the one who will be charged with finding your replacement!) Be ready!
John Strom has been helping retail automotive managers improve their performance for over 25 years. He has held a number of management positions in both single-point and multiple franchise operations, including General Manager. His company, Strom & Associates, is a member of the Performance Development Group. To learn more about their services, visit www.perdevgrp.com.
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A
!A potential customer calling your dealership is looking to spend Money!!! The first encounter either by phone or in person can establish the quality of the cus-tomer/dealer relationship and whether the customer will spend their hard-earned dollars at your particular facility.
FACT: Over 75% of potential customers call first to establish where they will bring their automobile for service.
FACT: The person entrusted with taking incoming customer calls is very often the least trained and lowest paid person in the dealership.
FACT: This sensitive job, if mishandled, can create serious problems, one of which is LOST POTENTIAL CUSTOMERS and SALES.
FACT: In an ongoing “mystery Shopper Survey” conducted by hundreds of participating students attending the PSADA Sponsored Service Advi-sor Training Program at Shoreline Community College, two out of every three “Mystery Shopper” customers would NOT take their car to the facility called for service.
Who’s Answering Your Phones?
It may not be something you have given a lot of thought or attention to, but it has a tremendous impact on your customers’ opinion of your organization. That’s right… the telephone and
the people within your organization who answer it.
A telephone call is often the first real impression a potential customer has of your organization. Sure, they might be familiar
with your brand name, have driven by your dealership, or seen a vehicle with your company logo driving around town, but a phone
call is typically the first real interaction a potential customer has with your organization.
By Dave DeMontigny
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“There is no single activity American business people spend more time doing (and less time improving) than
using the telephone.” --George Walther
Whether this experience is warm, positive, and memorable (for the right reasons) is highly dependent upon the individuals who answer the phones in your or-ganization. The right people can make all the difference in the world, while the wrong people can drive custom-ers away in droves.
What to look for from someone who will be an-swering the phones in your organization:
• People Oriented• Good Listener• Poised• Attentive to Detail• Helpful• Polite and Courteous• Positive Attitude• Ability to Multitask• Organized• Strong Problem Solving AbilitiesMost of
these traits should be fairly obvious to anyone who has worked in a professional work environment. So why is it that so many people hired for positions that answer the phones do such a poor job of it? Here are some reasons why:
• A failure to under-stand the impor-tance of one’s role and the effect it has on the customer – Surprisingly, many employ-ers are unaware of the impact their interaction with a customer or prospect over the phone can have on an organization’s bottom line.
• An absence of clear expectations expected of someone in a position that frequently an-swers the phone - if an employee is unaware of the phone answering techniques that are expected of them, they will frequently come up with these techniques on their own. Sometimes they are good-- most times they are not.
• A lack of training in the proper telephone etiquette skills and techniques - Proper phone etiquette is something that is rarely discussed in schools and is often left out of new hire
training and orientation. Without exposure to the right telephone skills and techniques, it is difficult to expect performance excellence.
• A behavioral disconnect between the em-ployee and the needs of the job - people who frequently answer the phone require a particu-lar behavioral style and personality type. Some people are naturally more friendly, helpful, and courteous than others. The important thing is to identify the desirable behavioral style and per-sonality type and hire individuals who possess these traits. Big question… Who’s answering your phones right now???
Where does your dealership rate with the hundreds of calls received weekly from potential customers looking to spend money with your dealership? Are your people responsible for answering your phones creating a great impression of your organization or driving your customers away???
Dave DeMontigy is with the Car People Agency and is the instructor for the PSADA Service Advisor/Cus-tomer Service Training classes at Shoreline Community College. For more information on this topic, you can contact Dave at 425-952-4400.
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It seems hard to believe, but the end of 2010 will be here before you know it. Before it arrives, you should review your business needs and tax strategies so you can take advantage of opportunities that may be lost for this year if you do not act. Following are several suggestions you might consider:
DepreciationThe President recently signed
the “Small Business Jobs Act of 2010” into law which contains several favorable tax law provisions for businesses. One such provision extends the 50% bonus depreciation opportunity to 2010. To qualify, tangible personal property must be new and placed in service on or before December 31, 2010. Also, for tax years beginning in 2010 and 2011, the Act increases the annual limit for expensing qualifying property such as furniture, machinery, equipment, software and certain real property from $250,000 to $500,000. This annual limit begins to decrease as qualified property additions exceed $2,000,000. To qualify for the deduction this year,
the qualifying property must be placed in service by year-end.
Customer Tax IncentivesThere are a number of potential
tax benefits your customer can take advantage of if they purchase the vehicle before year-end. This may help motivate a potential buyer to finalize a purchase before year-end. These potential advantages include sales and excise tax deductions (if extended by Congress for 2010), depreciation deductions, and energy-efficiency credits. Since a number of restrictions apply to these tax benefits, it is a good idea to advise your customer to consult their tax advisor to verify what tax benefit the customer will receive.
LIFOMake sure to make your year end
LIFO adjustment!!!According to published reports, a
significant portion of auto dealerships already use the last-in, first-out (“LIFO”) method to account for their new vehicle inventory. A smaller number also use the LIFO method for
By Kevin Allison, CPAPeterson Sullivan, LLP
20
their used vehicles and parts inventories. While Congress continues to consider the repeal of the LIFO method, it still remains an effective tool to defer the payment of income tax in times of inflation. If you are currently using the LIFO method for tax purposes, you must also use this method for your dealership financial statements. What this usually means to the dealer is that a LIFO adjustment should be recorded on the last monthly financial statement for their tax year end (for a calendar year taxpayer this would be the December statement). If this adjustment is not recorded, the taxpayer will be in violation of the LIFO conformity requirement which may require the dealership to recognize the entire accumulated LIFO reserve as taxable income.
Estate planningYou should consider taking
advantage of your annual gift exclusion before December 31 if you have not already done so. Even though changes are expected in the estate tax arena soon, it may still be a good idea to transfer your estate to the younger generation. Each taxpayer is allowed to make an annual gift of a present interest of $13,000 to each donee. To qualify as a present interest, the donee must receive the immediate rights and benefits of the property being transferred. While this is an annual exclusion, if no gift is made by the end of the year, you will permanently lose the opportunity to transfer this additional portion of your estate free of tax for this year.
Wage withholdingIncreasing the amount being
withheld from your wages or bonus before year-end may allow you to reduce or eliminate underpayment penalties. Underpayment penalties will be avoided if a taxpayer has paid the lower of 90% of the current year’s tax or 100 % of 2009 tax. For taxpayers with adjusted
gross income of over $150,000 ($75,000 if married filing separately) on their 2009 return, the required prior year percentage is increased from 100% to 110%. Since these payments must be paid ratably over the year, simply increasing an estimated tax payment at year-end may not reduce the penalty significantly. Alternatively, wage withholding is treated as if it was paid ratably over the year regardless of when the amount was actually withheld. Therefore, increasing withholding at year-end may be more effective in reducing or eliminating a pending underpayment penalty.
Tax bracket planningGenerally, it is a good
idea to defer income and/or accelerate deductions whenever possible to delay the payment of tax since this allows the taxpayer to have use of the funds for a longer period of time. However, if you are forecasting that you will have less taxable income in 2010 than 2011, it may be advisable to accelerate income and postpone deductions if this will result in the income being taxed at a lower tax rate. There are a number of permissible methods to accomplish this. In many cases, this can be done by simply altering the year a particular payment is made. You should also consider the potential for increased tax rates in future years. We’ve all heard about this possibility but unfortunately there has been no definite word as whether or when tax rates will be increased, making it more difficult to plan. If nothing is done, tax rates are set to revert back to their 2001 levels in 2011 when the maximum rate was 39.6% (currently 35%).
S Corporation holding period shortened
In the past, a C corporation that had elected to convert to an S corporation
had to hold assets that had appreciated in value at the time of the conversion for ten years to avoid a “built-in gains” (“BIG”) tax at the highest corporate rate of 35%. The new act just signed by the President temporarily shortens this waiting period to five years if the fifth year in the holding period precedes the tax year beginning in 2011. For those that are currently S corporations which own appreciated property subject to the BIG tax, selling such property in 2011 may substantially reduce the amount of tax.
In times such as these with pending tax rate increases and a possible state tax on the ballot, it is important to take advantage of those opportunities that still exist. You should consult with your tax advisor before year- end to see if any of these tax planning suggestions apply to you.
For more information contact Kevin Allison at Peterson Sullivan, 206-382-3777.
You should consult with your tax advisor before year-end to
see if any of these tax planning suggestions apply to you.
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GGary Micallef knew he was destined for the car business before he could drive one.
The gregarious voice of the iconic “you gotta come see us” commercials for Hyundai of Everett and Skagit Valley Hyundai actually launched his automotive career in high school. Every hour away from the classroom was spent on the job at the Northgate Bon Marche Auto Center. On the day of his high school graduation he was named the company’s youngest store manager – a teenager directing the work of seasoned technicians twice his age.
A commitment to learning and hard work is at the heart of the Micallef story. Raised and greatly influenced by his grandparents, he developed a driving work ethic that has produced two of Hyundai’s most honored dealerships.
“You have to be driven to make this business work,” he says. “I was always ambitious - never afraid of hard work – but I also had some incredible mentors along the way.”
You Gotta Come See Him
Gary Micallef
By Craig Chastain
24
Topping the mentoring list was Rocky Peterson, the legendary Ford dealer, who brought Gary into his service department and eventually moved him into sales. They worked together for the next 21 years, and when Gary sought a dealership of his own, it was Rocky who stepped up with a partnership and Hyundai of Everett was born.
“One of the great things about Rocky was his willingness to try new approaches,” says Gary. “We agreed that we should start with an aggressive advertising program, and that’s how we got started with radio.”
With his signature “you gotta come see us” wrap and personalized style, Gary’s radio spots were an immediate hit and his expansion into television ads soon followed. The commercials also capitalized on one of Hyundai’s greatest assets – the 10 year, 100,000 mile power train warranty.
“We’ve always talked about the ‘Hyundai advantage’ – that warranty was, and is, the best in the business,” he says. “Put that together with a quality product and exceptional customer service – those have been the real keys to our growth.”
Adding to those keys is what Gary calls “The Process,” a style of customer engagement that focuses on integrity and a non-confrontational, low pressure environment. Their showroom is practical and efficient without the trappings of extravagance that customers might suspect they are paying for. With the confidence that comes from knowing the quality of the cars and the honesty of the marketing, Gary and his organization have put the dealership among Hyundai’s elite.
“Our team is really a family,” he
says. “We share the same values about the business - we want the customer to have a good experience. The result has been a history of satisfied customers and team members who have stayed with us over the years.”
The commitment to customer satisfaction extends to his choice of office space – his is situated up close and personal in full view of the showroom floor. He considers himself the team’s designated “fireman” and readily admits that he still loves being in the “trenches” where he can see, hear and feel the action.
Central to building a strong dealership brand has been Gary’s personal and corporate commitment to community service. An alumnus and early beneficiary of the Boys and Girls Clubs, he has taken a leadership role in supporting their local programs,
donating dollars – and automobiles – to fundraising efforts and feeding programs. He’s also deeply involved as a national board member in Hyundai’s Hope on Wheels campaign, which contributes a portion of every sale to hospitals specializing in pediatric cancer care.
“I couldn’t be prouder of what Hyundai does for kids with cancer,” he says in a voice full of emotion. “I’ve had a chance to see what our efforts have brought to hospitals around the country – it’s gratifying and humbling.”
Gary’s leadership responsibilities have also extended into Hyundai’s corporate operations. Formally the National Dealer Council Chairman, he currently serves as chairman of the carmaker’s western region, a position that recently took him to South Korea where he met with Hyundai’s senior
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Every dealership that receives more than $10,000 in cash in one transaction or in two or more related transactions must file IRS/FinCEN form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, with the IRS within 15 days of the date on which the cash was received. Dealers also must notify customers in writing that a cash report was filed with the IRS. This notice must be given by January 31st of the year following the calendar year in which the cash was received. A sample form is available for this purpose at www.nada.org/regulations.
Any transactions conducted between a customer (or agent) and the dealer in a 24-hour period are related transactions. Transactions are considered related even if they occur over a period of more than 24 hours if the dealer knows, or has reason to know, that each transaction is one of a series of connected transactions. Dealers should closely consider cash sales of vehicles to the same wholesaler. Depending on the facts, the sales may be related and subject to the Form 8300 filing requirement. For example, if on one day a dealer sells three vehicles to the same wholesaler, who pays cash for one of the vehicles on the day of the sale and two days later pays cash for the other two vehicles, and the total cash received is over $10,000 for the three vehicles, a Form 8300 is required. However, if that wholesaler buys one car with cash on each of three non-consecutive days, and no single transaction exceeds $10,000, the transactions are not considered to be connected and are not required to be reported even though the dealer received more than $10,000 for the three cars combined.
A dealer may be subject to civil penalties for failure to file a complete and accurate Form 8300 on time if it cannot be shown that the failure was due to reasonable cause. As a general rule, dealers that are audited by the IRS for the first time for Form 8300 compliance have been subject to the lesser failure to file penalty of $50 per violation when the IRS has found substantial compliance with the Form 8300 filing requirements but occasional violations. On subsequent audits, the IRS will frequently assess the $25,000 per violation penalty for intentionally disregarding the cash reporting requirement. For a period of time, the IRS assessed the $25,000 penalty on the first audit. The penalty should be based on the nature of the violation and the facts and circumstances of each situation. Intentional disregard violations may also be subject to criminal prosecution, resulting in imprisonment and fines of up to $250,000 for individuals and $500,000 for corporations or both.
Introduction toCash Reporting
management and toured their newest facilities.
“Hyundai is leading the way in new technologies and innovation,” he says. “We got to drive the newest models, see how the cars are built, and everyone we met, everyone we talked to, stressed one thing above everything else – quality.”
Gary’s belief in the Hyundai brand helped with his decision to expand into the Skagit Valley where their 15,000 square foot showroom opened in 2007.
“Probably not the best time to open a new car store,” he concedes with a smile. “We’ve had our challenges, but we’re encouraged that people continue to want quality and value which makes us very excited about the new models coming for 2011.”
Family – both corporate and personal – remains central in his busy life. He and wife Bev have three sons: Devin and J.C. work at the dealership and Eric is in the construction business. “My grandparents raised me with a great appreciation for family,” he says. “The car business has given me the opportunity to support my family, to serve the community and make a very good living.”
One has the feeling that Gary Micallef knew the possibilities, even back in high school.
72707_AT_AT9-403.inddJeff Domrase / Heather Yuhas9-11-2009 4:19 PM jdomrase_G5_06051
ClientJob #Prefi xTrimBleedLiveLine ScreenProduct CodeUnitCaption
AutoTrader.com91-02050-001727078.5” x 11”8.75” x 11.25”7.5” x 10”300 dpi000 - AutoTrader.comMagazineMarketing that works for Tammy
Job infoPrint ProducerAccount MgrArt DirectorCopywriterTraffi cArt ProducerScaleProof #
Prepared by:Southfi eld, MI • 248-354-9700
Chinn, JenniferDuda, JaclynCooke, MarkHutson, BryanHolmes, RyanLamoreaux, JamesNone1
ApprovalsFonts:News Gothic BT (Bold Extra Condensed, Con-densed), Adobe Garamond (Regular, Semibold), Helvetica (Medium)
Link Name: AT_9_004_TVWall_RM_4CSWOP.tif (CMYK; 674 ppi, 677 ppi; 44.47%, 44.29%), AT_Ult_com_Orange_4C.eps, AT_08_WWFY_pos_4C.eps, AT_09_DARCARS_K.eps
Used Swatches: Cyan, Magenta, Yellow, Black
100%bySaved at: From: Printed AtFonts
MARKETING THAT WORKS FOR TAMMYTammy is a people person. And the more people in the D.C. area
who see her cars, the better. So she knows that our high-profi le
ads in the biggest shows on the biggest networks are important in
attracting millions of customers to her 27 dealerships. And our proud
sponsorships of MLB on FOX, NASCAR on FOX, NFL on FOX,
BCS on FOX, as well as the NBA on TNT will attract millions
more. Hey, like Tammy says, “We are in this together.” For videos of
success stories from dealers like Tammy, visit results.autotrader.com.
Ronda NassibAdvertising Consultant
Greater Washington, D.C.
Tammy DarvishVice President
“THEY’RE ALWAYS KEEPING ME IN FRONT OF SHOPPERS’ EYES.”
AT9-403 / IADA/Puget Sound AAA
©2009 AutoTrader.com, Inc. All Rights Reserved. “AutoTrader.com” is a registered trademark of TPI Holdings, Inc. used under exclusive license. New England Patriots trademarks, including the Patriots logo, are the property of New England Patriots L.P., and are used pursuant to a licensing agreement with New England Patriots L.P.
L:7.5”L:10”
T1:8.5”T1:11”
B:8.75”B:11.25”
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72707_AT_AT9-403.indd 1 9/14/09 4:05:58 PM
A
72707_AT_AT9-403.inddJeff Domrase / Heather Yuhas9-11-2009 4:19 PM jdomrase_G5_06051
ClientJob #Prefi xTrimBleedLiveLine ScreenProduct CodeUnitCaption
AutoTrader.com91-02050-001727078.5” x 11”8.75” x 11.25”7.5” x 10”300 dpi000 - AutoTrader.comMagazineMarketing that works for Tammy
Job infoPrint ProducerAccount MgrArt DirectorCopywriterTraffi cArt ProducerScaleProof #
Prepared by:Southfi eld, MI • 248-354-9700
Chinn, JenniferDuda, JaclynCooke, MarkHutson, BryanHolmes, RyanLamoreaux, JamesNone1
ApprovalsFonts:News Gothic BT (Bold Extra Condensed, Con-densed), Adobe Garamond (Regular, Semibold), Helvetica (Medium)
Link Name: AT_9_004_TVWall_RM_4CSWOP.tif (CMYK; 674 ppi, 677 ppi; 44.47%, 44.29%), AT_Ult_com_Orange_4C.eps, AT_08_WWFY_pos_4C.eps, AT_09_DARCARS_K.eps
Used Swatches: Cyan, Magenta, Yellow, Black
100%bySaved at: From: Printed AtFonts
MARKETING THAT WORKS FOR TAMMYTammy is a people person. And the more people in the D.C. area
who see her cars, the better. So she knows that our high-profi le
ads in the biggest shows on the biggest networks are important in
attracting millions of customers to her 27 dealerships. And our proud
sponsorships of MLB on FOX, NASCAR on FOX, NFL on FOX,
BCS on FOX, as well as the NBA on TNT will attract millions
more. Hey, like Tammy says, “We are in this together.” For videos of
success stories from dealers like Tammy, visit results.autotrader.com.
Ronda NassibAdvertising Consultant
Greater Washington, D.C.
Tammy DarvishVice President
“THEY’RE ALWAYS KEEPING ME IN FRONT OF SHOPPERS’ EYES.”
AT9-403 / IADA/Puget Sound AAA
©2009 AutoTrader.com, Inc. All Rights Reserved. “AutoTrader.com” is a registered trademark of TPI Holdings, Inc. used under exclusive license. New England Patriots trademarks, including the Patriots logo, are the property of New England Patriots L.P., and are used pursuant to a licensing agreement with New England Patriots L.P.
L:7.5”
L:10”
T1:8.5”
T1:11”
B:8.75”
B:11.25”
T2:0
.062
5”T2
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875”
F:0.
0625
”
T2:0.0625” T2:8.375” T2:0.0625”
72707_AT_AT9-403.indd 1 9/14/09 4:05:58 PM
27
Applying torque on a vehicle is much more than simply tightening a fastener. There are many guiding principles behind torque that automotive technicians need to recognize to ensure fasteners are properly secured.
Until recently there hasn’t been any formalized training for technicians that deals solely with torque. Many of the techniques or “tricks of the trade” in torque have been passed down from more veteran technicians in shops or dealerships, or briefly touched upon in trade schools. “You can find certified welders, they’ve been around for decades, but you can’t find a certified bolter,” said Bob Braun, an instructor at Gateway Technical College in Kenosha, Wis. “Think about this, you have to X-ray and certify welds, but for critical systems that must be assembled with a fastener, there’s no specialized training.”
All of that’s changing thanks to a new partnership between Snap-on Industrial and the National Coalition of Certification Centers (NC3). The
NC3 is a group of technical training centers, community colleges and manufacturers that have combined training resources to form a North American consortium. Shoreline Community College is a member of NC3.
How it WorksTorque certification is a course originally developed by Snap-on
Industrial to teach technicians of all disciplines about the various aspects of fasteners and fastening. The program is designed to create a high standard for maintenance and assembly work; the curriculum emphasizes the proper procedure for applying torque, which is the twisting motion used to attach a fastener to an anchor. The 24-hour course is divided into two primary sections: Torque theory (16 hours) dives into the application of torque and corresponding safety measures; hydraulic torque study (8 hours) is an optional program.
CERTIFICATION
Why Your Techs Need It
By Frederick BrookhouseBusiness and Education Partnership ManagerSnap-on Industrial
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In partnership with Snap-on Industrial, NC3 has worked with several community colleges and technical training centers across North America to offer torque certification as either part of an existing training program, or as a standalone course. In the near future, Shoreline will be offering this training to its students and to new car dealers at its Professional Automotive Training Center.
Lube, torque and cleaning remain the cornerstones of any maintenance program that incorporates fasteners. And those three elements speak directly to safety. There is a perception that applying torque to a fastener is intuitive, anyone can do it. Well, anyone can do it per se, but the ability to do it properly is what makes the difference. And experienced
technicians often are the toughest audience to impress because they’ve developed bad habits through their career and this course forces them to relearn the basics.
Beyond all of the academic instruction, torque certification has a physical component as well. Students must pull a wrench on a fastener within a set tolerance in another pass/fail milestone. There is an element of hand-eye coordination in doing this work that’s not unlike golfing or hitting a baseball. “Anyone can swing at the ball real hard,” said Braun. “But you need to do that with a certain level of accuracy. And that’s what we’re doing with the torque wrench – pulling it with the right level of finesse, the right amount of accuracy.”
Program BasicsThe 16-hour theory portion
of the training course provides an overview of the job a fastener must perform. This part of the curriculum goes deep into how to identify bolt grades, metal grades, hardness, thread pitch, lubrication and applying the associated science. The second part of theory – application, involves hands-on training with the proper use of tools – calibration equations, making wrench adjustments and using extension tools. These activities are guided and judged by a professional instructor.
Safety – the third part of theory – considers the importance of knowing what a tool is meant to do and then properly using that tool. The discussion ranges from protective eyewear and clothing to working near power
sources. Safety drives better procedures and a methodical, step-by-step approach to applying the right fastener to
the right bolt or axis point.
The optional course offering – hydraulic torque study – is designed for large fasteners, such as the kind found on wind turbines and other oversized equipment. The application of hydraulic torque requires its own skill sets, including knowledge of hydraulic systems, proper fastener fitting for these specialized applications and large fastener/equipment safety considerations.
Students taking the torque certification course learn the basic principles behind torque and follow a logical process when working with torque. For example, they’ll learn to recognize the kind of fastener being used and the best procedures to apply torque – e.g., determining the torque
value and how to apply the precise pressure on each bolt so that a strong attachment is achieved. The correct process requires that the fastener be torqued two or three times before it reaches a maximum load. But in critical applications applying torque to a given fastener may require five revolutions.
The program allows students to work with common equipment they’ll be using on the job site. The advantage to employers is having a skilled workforce that can get the job done right the first time; less on-the-job training. For the technicians, receiving torque certification gives them a leg up on the competition and can make them a more polished, skilled candidate for a job.
SummaryThe bottom
line is that anybody can apply torque to a fastener; anyone can use a ratchet. But the difference is certification. Similar in scope and implementation to the Automotive Service Excellence (ASE) certification, technicians completing the torque certification course show their desire to take their skill and motivation to the next level to fully understand the intricacies of torque. And being certified in torque gives technicians the added training and awareness that will pay dividends down the road in better vehicle uptime and reduced maintenance costs.
Quality fastener procedures employed in important applications can be a decided advantage for automotive technicians who earn certification.
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WWe all ask questions. And when we ask the right way - and ask the right questions - we normally can get the best and right answers.
J. Douglas Edwards, a master sales trainer from years ago, now deceased, said: “Questions ARE the answers.” And we so agree with him. To get the right answers we need to ask the right questions and in the right ‘mode.’ And there are various types of questioning techniques.
It’s like your mother said, “It’s not what you say, but how you say it.” Telephone Doctor has defined several questioning techniques to help you get the right answers.
Every salesperson knows that, as Mr. Edwards said, questions ARE the answers. As salespeople we are taught to ask questions, to talk less and listen more. One of the best ways to listen more is to ask good questions.
From “Do you have the correct time?” to “Where did you go on your vacation?” asking questions can be the key to your success. Let’s go over them now. Which type of questioner are you?
1. The Open-Ended Question - These are questions without a fixed limit. They are questions that encourage continued conversation and help you get more information. They’re used to get people to open up and talk. Most, not all, but most open-ended questions will start with one of these words: Who, What, Where, Why, When and How. I say most, not all, because while these are well known words to begin open-ended questions, they can still get you one-word answers. So while not perfect, open-ended questions will normally get you much more information.
2. Closed-Ended Questions - Conversely, closed-ended questions do have a fixed limit. They’re often answered with a yes or no or a simple statement of fact. Closed-ended questions are usually used to direct the conversation, to get brief specific information or to confirm facts.
The next time you watch a movie that has a trial scene, you’ll see lawyers using open and closed-ended questions, at the right time, to get the answers they need/want. Pay attention to how they use them.
3. Probing Questions - These are normally used after an open-ended question to get yet more information. And that’s because we sometimes ask an open-ended ques-tion and we only get part of what we need. So it’s more of a follow up to get more information.
?By Nancy FriedmanThe Telephone Doctor
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VI. The ADA, Workers’ Compensation and Washington Law
The Equal Employment Opportunity Commission statistics showed that the two largest areas of ADA complaints were discharge and failure to accommodate. The cases filed by impairment, include back impairment, neurological impairment, psychological impairment, extremities, heart impairment and substance abuse. The first two categories of impairment are those common to workers’ compensation, back and neurological problems, which includes repetitive motion problems.
Under Washington law, every worker who is out on workers’ compensation “time loss” is a person with a disability since he/she has a condition which is diagnosable and abnormal. Therefore, the worker is entitled to accommodation.
The tension between the ADA, the Washington law regarding persons with disabilities and workers’ compensation arises from the employer’s desire to cut workers’ compensation costs by bringing the worker back as soon as possible to a modified duty/return to work position and the worker’s expectation that the modified duty/return to work position is something he/she can do for the rest of his/her employment.
Employers who fail to accommodate work-related injuries are at substantial risk in a failure to accommodate suit under either the ADA or the Washington law protecting those with disabilities.
ConclusionEmployers who maintain well-documented
records and who consider each case with care and deliberation will be able to navigate the laws and minimize risk. The attached brief summaries will also assist employers who encounter these issues. Understanding the differences and nuances of these overlapping employee leave laws will unravel any and all confusion for you and your business.
Footnotes1 Sedlacek v. Hillis, 104 Wn. App. 1, 3 P.3d 767 (2000).2 Doe v. Boeing, 121 Wn.2d 8, 846 P.2d 531 (1993).3. Pulcino v. Federal Express Corp., 141 Wn.2d 629, 9 P.3d
787 (2000).
For more information about this topic contact James Shaker at 206-654-2261 or [email protected].
Leave Laws from page 11
Probing questions can start off with, “Tell me more about” Example: After you have asked, “Where did you go on your va-cation?” And the customer says: “Disney World.” The probing question would be: “Tell me more about Disney World.” Prob-ing questions are valuable in getting to the heart of the matter. Often times you need to offer “aided recall’ to help the customer along. Aided recall is part of probing. Something like: “Does the message on the screen say error, reboot or does it just freeze up?” These types of questions are helpful to the customer and will lead you to the right answer.
4. The Echo Question - This doesn’t mean you repeat the ques-tion 50 times, but it does mean you take all or part of the statement the customer made, repeat it once, and turn it into a question. Like this:
Customer: I didn’t get the right information! You: You didn’t get the right information? Customer: That’s correct. I needed all four pages and only got
two. See? By using the echo question the customer gave you ‘more’ information. Good technique.
5. Leading Questions - These are the fun and favorite types of questions by salespeople. They’re often called “tie downs.” They’re used to cement the information in your favor. They’re short phrases used after a statement of fact. They invite agree-ment and help the customer to say, “YES.”
Like this: “You’ll want to see both islands, won’t you?” or “After ten years it’s time to get new carpeting, isn’t it?”
Leading questions are useful in helping someone who’s undecided make the right decision.
What type of questioner are you? You should be all of them. We invite you to preview our new updated program on questioning techniques. It will help you become more proac-tive, don’t you agree? (That’s a leading question.)
Nancy Friedman, customer service and sales expert, is available to speak at your association conference or corporate event. Click here for a complimentary DVD demo of Nancy in action. You can also contact Nancy directly via email [email protected] to discuss your specific needs.
Questioner from page 29
31
32Peterson sullivan llP
a Winning team
Get a CPA firm with a winning record
on your team.
Peterson Sullivan LLP, one of the nation’s most successful specialists in auto dealership accounting, serves more than one hundred dealers in the Pacific Northwest. We are one of only a few CPA firms approved to perform audits for GM Motor’s Holding Division. And we are the only Washington State member of the exclusive AutoCPA Group.
Following are only a few of the many areas where we are trusted advisors to our automotive industry clients:
• Cashcontrols • Internalcontrols• Costsegregation • IRSreportingrequirements• Dealershipvaluation • SalesandB&Otaxconsulting• Estateandsuccessionplanning • Taxplanning• Financialstatementanalysis
We believe strongly in building long-term relationships with our clients. We aim to understand your business so well that our advice becomes indispensable. Please contact Kevin Allison to see how we may assist your business needs at (206) 382-7777 or by email at [email protected].
Peterson Sullivan. Driving your success.
33
T
Perspective
The past two years have been precedent setting to say the least. Never in the history of our business has there been so much turmoil, turnover, change, fear, hope and innovation at the same time. The industry we all love and depend upon has morphed into something that none of us could have predicted or have foreseen. For some, the retail automobile business has become almost unrecognizable.
Having been directly involved in the retail automobile business for over 40 years, I have experienced many different cycles. Never before in our history has it been like it is now. I clearly remember Viet Nam protest marches, the National Guard shooting of students at Kent State, oil embargos, long gas lines, extended manufacturer strikes, President Reagan breaking the PATCO union, the very first rebates, 19% prime interest rates, and on and on. Needless to say, it has been a learning experience.
During those years I have also come to learn something that is very important to me and has served me well. That is, every once in a while, someone comes along with an idea, product, principle, tool or some form of
something new that absolutely makes sense. This new “thing,” whatever it is, really works and we wonder why we didn’t think of it. The problem for some of us, particularly in the past two years, is that we never get the chance to actually try or even learn about some of the new products or ideas because of our own personal “Default View Settings.” The recent economic climate has conditioned “normally optimistic decision makers” in a different way and the end result is a negative/pessimistic internal Default View Setting. Hear me out.
By this I mean that when we are in the process of listening to someone present a new product, service or concept, our mind has now become conditioned to be thinking of the way we are going to tell this person no instead of really focusing on how this new “widget” might be able to make our operations more money. How can we get out of saying yes has become the new internal “Default View Setting” for the vast majority of dealership
decision makers. We have conditioned ourselves to be thinking in terms of a negative default view right from the start of the presentation, perhaps without even knowing it. Many of us never even allow the person who wants to talk to us, the opportunity to present their idea or product. Many dealership decision makers today will not even take their call, regardless of how good their “widget” may be. We have learned to shield ourselves from vendors very
effectively and even more so in the past two years. It is sort of like the cartoon of a general telling his aide that he is too busy fighting the enemy to be able to talk to the salesman (who happens to be selling machine guns). The problem with this practice is obvious. Our personal “Default View Setting” limits discovering the true picture to such a degree that it becomes the proverbial self-fulfilling prophecy. This is a vicious circle to fall into and one you must try to avoid. I know, first hand, how tough
By Scott Dreisbach
Our personal “Default View Setting” limits discovering the true picture to
such a degree that it becomes the proverbial self-fulfilling prophecy.
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it has been these past two years. I do sense, however, that the worst is now over. I think we all are seeing the signs.
Is it time for you to rethink or reset you own personal Default View Setting? Have you missed any opportunities because you did not take the time to listen to a vendor with an open mind? Do you find yourself thinking how to say no in your one-on-one conversations, particularly with vendors? Do you view vendors as an adversary, someone who you do not want to talk to? If your answer to any of the above is yes or even maybe, it might well be time to consider an alternative approach.
Technology today is moving at a record pace. This technology is all designed to make life easier for you and your store. There are many great tools out there that will help you increase your bottom line. You must consider resetting your default view if any of these tools are ever going to even get a chance to appear on your radar screen, let alone have the chance of being implemented in your store. What is your “Default View Setting?”
If you would like to learn more about current inventory management technology, and how it will help you increase your bottom line, please contact me. You may still be fighting the enemy and I am still selling machine guns.
You can contact Scott Dreisbach, Vice President of Valuinsight, Inc. at [email protected], 561-368-7810 X 108 direct or www.valuinsight.com.
In the first study of its kind across brands to identify and measure the activities, practices, and behaviors that drive dealership financial profitability, NADA undertook a research project with support from McKinsey & Company to define and corroborate best practices in automotive dealership management.
Analyzing survey responses across all the different factors that influence profit—region and demographics, brand and origin (domestic, European import, or Asian import), dealership size (measured by volume of new-vehicle sales) and structure (stand-alone store versus part of a broader network of dealerships), and operational practices—the study found that operational best practices are the single biggest profit differentiator.
Based on this study, the average-performing dealership in an average environment achieves, roughly, two percent net profit before tax. An improvement in each of the influencing factors, one by one, results in more profit.
To explain step-by-step:• If the average dealership could be relocated to a better region with better
demographics, net profit would be expected to increase three-tenths of a percent, to 2.3 percent.
• If the dealer had a better-selling brand, profit could increase another nine-tenths of a percent, to 3.2 percent.
• Improvements in sales volume and structure can add a full one percent to net profit for this dealer, bringing the total to 4.2 percent.
But the big jump can come with implementation of operational best practices:• If the dealer’s operations are consistent with best practices, net profit can
increase by 2.3 percent, bringing the total for the hypothetical dealer all the way to 6.5 percent.
Obviously, most dealerships cannot change all the external factors that affect profit. They can, however, change internal factors. Therefore, finding #1 is vital to all dealerships.
The analysis suggests that regardless of size, brand, or region, an average dealer who transforms average practices—not poor practices, but average practices—into best operational practices can increase operating profit by more than two percentage points. Best operational practices involve personnel management, departmental policies and processes, and relationships with the OEM.
Operational Best Practices
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Small Business Owners
There’s a fatal flaw in the retirement of many small business owners: After pouring a lifetime of sweat, time and capital into building the business, their rough-sketch strategy is to sell out someday for a ton of money… then settle back and enjoy a financially secure retirement. Many business owners are so sure this will happen that they don’t bother to make any other retirement plans.
Who is this person who, at just the right moment, is going to show up with cash in hand to buy the company… and pay a fair price? For thousands of small business owners each year, no one steps forward. Perhaps the business is too specialized or is tied too closely to the owner’s unique personality and skills. Or perhaps possible buyers equate retirement sale with distress sale and make only low-ball offers. Whatever the reason, many owners find that their company has suddenly become a white elephant that nobody wants.
One Possible Solution
Groom your own replacement, someone who will buy your company
when you’re ready to retire. Maybe this person is a current co-owner (but be careful if he or she is about the same age as you, who will be counting on retiring around the same time.) Or it could be a son or daughter active in the business, or a younger key employee.
Business Owners Who Successfully Groom Their Own Replacements Leave Nothing to Chance
They realize that there is no room for error at the point of retirement. Here are some examples of steps they might take:
• They are cautious. They make sure their heir apparent is the right person in terms of temperament, personality, competence and personal goals.
• They set up a probation period so they can terminate the relationship if they find this person simply will not work out. During that period, they keep everything informal, strictly verbal. At the same time, even when they go to a formal agreement, they make sure it
contains a termination provision.
• They fashion golden handcuffs and incentives to ensure that their replacement stays until the baton is passed. An ambitious successor needs and deserves gradually increasing authority and benefits. Options include deferred compensation or the opportunity to acquire partial ownership prior to their retirement. This provides both parties with something to win by sticking to the agreement… and something to lose if it falls apart.
• They put it in writing, along with the help of their attorney—locking in who does and gets what, and spelling out all details and caveats, including how to establish the final valuation of the business. This formal buy/sell agreement protects everybody.
• They build in a funding mechanism. This is crucial. No matter how good the terms of the buy/sell agreement, it will be
By Julie Wallerich, CLTC
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worthless if the money is not there when needed to carry out the plan. Under one option, the successor may be able to purchase the company from ongoing profits. Other options include setting up a sinking fund or allowing the successor to simply borrow the money. These options may work but they leave much to chance. Instead, consider a funding vehicle that protects your family in the event of your disability or premature death, such as life and disability income insurance.
• They have a back-up plan. As a business owner, you know that very few things go exactly as planned. What if your business hits tough times or your successor dies, becomes disabled, or—all too common—leaves because of a personality conflict? Or what if there simply is no heir apparent waiting in the wings? Sometimes, it’s simply best to dismantle the business.
Whether or not you have a possible successor for your company, you should begin mapping out your retirement strategy today. Your insurance professional or your independent professional advisors can help you develop this kind of business strategy.
This educational third-party article is being provided as a courtesy by Julie Wallerich, New York Life Insurance. For additional information on the information or topic(s) discussed, please contact Julie Wallerich at (253)221-2022.
The key element to cash flow is timing. If you receive a payment of a contract in transit before you have to pay the floor plan, lien payoff on the trade-in, and sales commission—then your cash flow is okay. Unfortunately, the timing is not always right, and it may be compounded by such circumstances as a customer using a trade-in to pay for a portion of his vehicle purchase. That trade-in can stay in your inventory for months, reducing your cash flow. Creating best practices and policies will enable you to correct the issues that harm your cash flow.
The following are best practices for getting your cash into the bank faster. They might not work in every dealership, and they might require additional training and policies to be put in place, but experience has proved that many of these solutions are effective in turning your receivables and inventories into cash faster.
• Have the F&I office pull and submit the contracts.
• Use a post office box for receiving checks in the mail. Receipt them in and deposit the same day to a deposit clearing account. Have the clerks distribute the payments to the various accounts from the receipt and check stub instead of holding the checks.
• Have a policy for used vehicles that you will carry in stock by year, make, and model. If a unit comes into stock outside of that policy, wholesale immediately and adjust the Actual Cash Value (ACV) of the car deal that took it in trade.
• Use sweep accounts to move excess cash from your checking accounts into investment accounts and include the payroll account to earn on that account’s “float.”
• Issue a daily report of all Contracts in Transit and Vehicle Receivables to the sales department. Don’t wait for accounts to become past due to collect.
• Issue a weekly report of all Accounts Receivable and Warranty Claims to the service and parts managers. The best person to collect the funds is the department manager who created the receivable.
This article is excerpted from A Dealer Guide to Cash Flow Management, available through NADA University’s Resource Toolbox. Please visit www.nadauniversity.com to access the complete guide.
Cash Flow TimingBest Practices
and
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o If you have a cash investment account, is there a copy of the month end balance in the reconciliation file?
o Do outstanding deposits have a computer entry to match (is it posted)?
o If direct deposit is used for payroll, is there a copy coming from Payroll (not a downloaded spread sheet that can be manipulated) in the payroll bank account reconciliation file?
o Check payroll payable to the bank statement; did the correct amount get transferred from the general account to the payroll Account?
o Check all the “Other Debits” on the bank statement; are the accounts familiar? The bank reconciliation should be prepared by a different person at least quarterly.
o Perform background checks on a regular basis for employees in sensitive roles.
Program Changes:Free loaner car program revamped to $10 a day payment:
• Expedited return of loaner vehicles after service was completed as well as time spent following up with customers.
• Reduction in the loaner fleet and thus expenses because some customers choose to wait for their vehicles rather than pay for the loaner.
• To mitigate resistance, all customer contact employees were trained on how to present the new loaner policy to customers in case of opposition. After a year and a half the result was less resistance than anticipated and significant decreases in expenses.
Use of Outside Vendors• Outsourcing L&I to Washington Employers saved
money when the HR person was let go.
• Utilizing LexisNexis for background checks and locating debtors and employees or potential new hires.
Dan Cheyney is a tax partner and regional director of the Dealer Services Group for Moss Adams: 425-303-3188 or [email protected].
Dealership Ideas from page 13
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IIn August, AYES recognized Shoreline dealer Sara Carter and her Service Manager, Todd Coleman of Carter Subaru, for their outstanding support of AYES. Carter Subaru has mentored seven AYES students since 2002. All seven Shorewood High School AYES interns are working at the dealership. The 18-bay family-run dealership has found a unique partnership with AYES. “AYES has been a good fit for our dealership,” says Coleman, a 20-year service veteran at Carter Subaru. “AYES involvement has allowed Carter Subaru to grow young technicians the way we want to, using techniques unique to Subaru products and to the core values of Carter Subaru.”
“At Carter Subaru we do things a little differently than others,” explains Coleman. “Our AYES students don’t go directly from AYES to flat-rate. After they graduate from high school, we have them apprentice under another technician prior to deciding if they will go to flat-rate. We do not want them to burn out if it doesn’t go well. Some students are not prepared mentally for that big jump.”
Carter Subaru’s philosophy is to keep a watchful eye on the mentoring process. Coleman suggests other dealerships do the same. “Make sure the mentor and AYES student un-derstand each other,” recommends Coleman. “A disconnect at any age is difficult but especially for a young person. So you need to have the mentor carefully watching the kid and the service manager carefully watching the mentor to make sure everything is going well.”
But with responsibility comes reward for the mentors and the students. “Our mentors have gained a great deal as well, not only financially but personally,” continues Coleman. “On a professional level, the mentor uses skills they have not used for long periods of time. From a personal stand point,
they are able to break from a sometimes tedious, reclusive day-to-day grind and open up and learn about someone else.”
Coleman appreciates that the AYES model of techni-cian development/recruitment helps from the get-go. “I like the fact that, at the high-school level, we’re taking students that are truly interested in the career. The AYES instructor hand-picks the students so it’s a lot less work for the service manager. I do not have to weed out or pick the students that I do not think will work out.”
With this kind of success, it’s no surprise that Coleman says, “I would strongly recommend the AYES program to any dealership that is interested in the quality and longevity of their service department.”
The Carter family has a reputation for innovation and excellence. Carter Subaru was the first Subaru dealer in the United States to have a fully certified female master techni-cian. Since 2002 they have been Washington State’s leading Subaru dealer in parts, service, and sales. For the past ten years they have been Subaru’s national brand leader for parts and service. In 2009 they were awarded Subaru’s Pinnacle Award.
Carter Subaru Recognized as AYES National Dealer of the Month
From left to right: Todd Coleman, Service Manager; Jeff Bitzer, mentor; Chad Moore, mentor: and Ron Olson, AYES Washington State Manager.
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from
Industry Insightsfrom
Industry Insights
Female Car Shoppers; The Purse Powers The PedalWomen Aren’t a Market Segment, They Are The Market
Women influence over 95% of all vehicles purchased and are the sole buyers of more than 50% of all cars sold in the United States. The aftermarket is large as well, with women spending $300 Billion annually maintaining their vehicles.
The Difference with Women? The reality is women don’t shop for vehicles much differently than men. When it comes to car shopping, women tend to feel less confident and lean towards a more practical and savvy decision making process.
WHAT DEALERS CAN DO:Increase Confidence and Appeal to the Savvy, Female Shopper
1. Recognize she’s making the decision. Many women that come into your dealership are the decision makers and /or the buyers.2. Provide the details, especially on pricing. Women tend to be more insecure about the negotiation process. Consider providing detailed information breaking down price to model specifics.3. Reinforce value, safety and deals. Make sure specials, sales and pricing info is up to date and well merchandised. Consider promoting more certified offers to appeal to the practical side of female shoppers.4. Capitalize on word of mouth. Utilize positive testimonials, dealer reviews and case studies to help improve dealership perceptions. Reinforce your customer service policy for shoppers visiting your dealership.
Sources: 2009 Shopper Segmentation Study, KS&R Inc., 2009 AutoTrader.com User Profile Study, MORPACE Int. Road and Travel Magazine
% of AutoTrader.com users are Female.
40DID YOU KNOW...
WOMEN ARE LIKELY TO:
Find the process nerve-wracking. 24% view shopping for a car as stressful, compared to 15% of men. Feel intimidated visiting the dealership. 3x more so than men. Want a companion. Less than 40% of women prefer to shop alone. Shop for what’s practical. 44% are fulfilling a need vs. a want (15%). Wait until the price is right. 63% say finding the best deal is very important. Have less buyer’ s remorse. Only 11% of women second guess their vehicle purchases vs. 18% of men.
Women Don’t Need a Different Sales Process, They Need More Information
% are active and in-market, that’s close to 5.5 million highly interested female shoppers on AutoTrader.com every month.
95AutoTrader.com women shoppers are more likely to look for specials and sales, and they are more likely to be CPO shoppers.
% of vehicles
sold are influenced by women
95
% ofvehicles sold
are purchasedby women
50
from
Industry Insightsfrom
Industry Insights
Female Car Shoppers; The Purse Powers The PedalWomen Aren’t a Market Segment, They Are The Market
Women influence over 95% of all vehicles purchased and are the sole buyers of more than 50% of all cars sold in the United States. The aftermarket is large as well, with women spending $300 Billion annually maintaining their vehicles.
The Difference with Women? The reality is women don’t shop for vehicles much differently than men. When it comes to car shopping, women tend to feel less confident and lean towards a more practical and savvy decision making process.
WHAT DEALERS CAN DO:Increase Confidence and Appeal to the Savvy, Female Shopper
1. Recognize she’s making the decision. Many women that come into your dealership are the decision makers and /or the buyers.2. Provide the details, especially on pricing. Women tend to be more insecure about the negotiation process. Consider providing detailed information breaking down price to model specifics.3. Reinforce value, safety and deals. Make sure specials, sales and pricing info is up to date and well merchandised. Consider promoting more certified offers to appeal to the practical side of female shoppers.4. Capitalize on word of mouth. Utilize positive testimonials, dealer reviews and case studies to help improve dealership perceptions. Reinforce your customer service policy for shoppers visiting your dealership.
Sources: 2009 Shopper Segmentation Study, KS&R Inc., 2009 AutoTrader.com User Profile Study, MORPACE Int. Road and Travel Magazine
% of AutoTrader.com users are Female.
40DID YOU KNOW...
WOMEN ARE LIKELY TO:
Find the process nerve-wracking. 24% view shopping for a car as stressful, compared to 15% of men. Feel intimidated visiting the dealership. 3x more so than men. Want a companion. Less than 40% of women prefer to shop alone. Shop for what’s practical. 44% are fulfilling a need vs. a want (15%). Wait until the price is right. 63% say finding the best deal is very important. Have less buyer’ s remorse. Only 11% of women second guess their vehicle purchases vs. 18% of men.
Women Don’t Need a Different Sales Process, They Need More Information
% are active and in-market, that’s close to 5.5 million highly interested female shoppers on AutoTrader.com every month.
95AutoTrader.com women shoppers are more likely to look for specials and sales, and they are more likely to be CPO shoppers.
% of vehicles
sold are influenced by women
95
% ofvehicles sold
are purchasedby women
50
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