New culture and rejuvenated department boost wholesale numbers
Aurora, Colo.—When David Shull, parts manager at Larry H. Miller Chrysler Jeep Dodge Ram (CJDR), noticed that wholesale sales had slipped before he took over management of the department in July 2016, one of the first things he did was pack a bag full of marketing material and “jump the back fence.”
“I figured the best place to start was in our own backyard,” he said.
Taking full advantage of the power of the Larry H. Miller (LHM) dealership group, Shull started going on weekly ride-alongs with LHM sales reps to get in front of potential customers. “I was told by many of the independent repair facilities (IRFs) I visited that I was the first parts manager who’d ever set foot in their shop. That was an eye opener,” he said.
As Shull continued the ride-alongs, the department re-devoted itself to providing the best possible service to its wholesale customers in order to recover lost market share. With each visit, Shull said he made promises to customers that he knew he’d have to fulfill, no matter what the costs.
“You work so hard to get a customer in this business, even if you have to bend over backwards for them to fulfill your end of the deal, you do it,” Shull said.
The dealership started going above and beyond – delivering parts afterhours when necessary, hosting raffles and BBQ’s for customers, or bringing a shop lunch and serving it at their facility. Shull also registered the dealership with OE Connection and began accepting orders online through Collision and Repair Link. He said his OEC performance coach, Eddie Fabela, has helped the department tremendously.
“The investment in OEC performance coaching has paid dividends,” Shull said. “Fabela spends one-on-one time with my staff, teaching them how to effectively use Collision and Repair Link to remain competitive.”
As business rapidly increased, Shull streamlined efficiencies, starting with logistical changes to the department’s internal layout. He created a separate counter space for two dedicated wholesale reps and segmented the department into three separate work stations: a counter for retail business, one for internal business – to supply his service department and on-site collision shop – and one for wholesale business.
He also recruited an employee to fill the newly created wholesale counter as the dealership only had one, long-standing wholesale parts consultant, Randy MacMillan, who has been in the parts business for more than 30 years. “Randy is well-rounded,” Shull said. “Everybody knows him and he grinds on a daily basis, but we needed another guy to ensure our level of service was there.”
Tyler Newlan applied for the position and is now the second dedicated wholesale parts consultant.
“Tyler had been working as an outside sales rep for [a local jobber] so he knew the shops and already had some relationships built up,” Shull said. “I wasn’t about to let him leave the automotive industry.”
Shull and his 12-man crew then went to work on purging the dealerships inventory and warehouse space of obsolete parts, which he said had bogged down the department for years. Maintaining a 70-percent mechanical and 30-percent collision split, Shull said he pays close attention to his off-the-shelf fill rate, relying on Chrysler’s Automatic Replenishment Ordering (ARO) system to keep track of specific parts history and eliminate lost sales.
“If I start to notice a specific part number with three or four missed hits because we didn’t have it in stock, I may override the ARO system and bring that part in early,” Shull said. “It’s about detail and paying close attention to supply and demand. With fast moving parts, I want to be at a 95-percent off-the-shelf fill rate, meaning I needed to clear the space necessary to accomplish that.”
All seven of the parts advisors also participate in online phone and customer service training through MOPAR and also attend training sessions through the LHM dealership group. He added that MOPAR has backed up its franchise dealerships with a nationwide warranty replacement program, paying up to $145 per hour at IRF labor rates for failed parts replacements.
“MOPAR has really stepped up their game in the wholesale business — we’re seeing unprecedented support from the top down,” Shull said.
With accounts in “the backyard” in good standings, Shull said the next step for the dealership is to expand its delivery radius and start servicing customers as far south as Buena Vista, Salida and Colorado Springs. He recently added to his delivery fleet with a 2017 ProMaster 2500 delivery truck, featuring a Larry H. Miller CJDR advertising wrap.
The dealership saw a 40 percent increase in wholesale business in May. And while Shull said he’s pleased with that number, it’s lower than what he’s gotten used to as month-over-month, for more than a year, wholesale sales at the dealership have increased consistently 45 percent. As a result of the success, Shull was also nominated as one of only 30 other employees in the LHM dealership group into the Executive Fixed Miller Business Academy (EFMBA) — a 16-month training program designed to teach managers how to run their own dealership. He attended his second training seminar in Salt Lake City, Utah, in June.
“I’m not responsible for the success of this department,” Shull said. “On a daily basis – it’s the work ethic of my crew and our commitment to service that has made the difference.”