Thornton, Colo.—When Eric Schmid joined Larry H. Miller Chrysler Dodge Jeep Ram 104th three years ago, he spent his first year installing and refining new systems and processes to lay the foundation for his part department’s future growth. Two years ago, wholesale revenue was $160,000 a month. Today, it’s $450,000.
“We’ve tripled in two years. It’s been a learning experience, too, as this is my first time as a full-blown parts director,” said Schmid, who has been with the manufacturer for 20 years, beginning as a parts driver and working his way up to shipping/receiving, eventually becoming a counterman for 15 years before joining the dealership.
. . . . . . . . . . . . . . . . . . . . . . . . . . .
At a Glance
• Inventory: $1.2 million — 60 percent collision/40 percent mechanical
• Monthly sales revenues: $450,000
• Counter staff: 9
• Delivery trucks: 5
• Delivery area: Denver metro, Colorado Springs, Wyoming, Western Slope and “wherever anyone needs us.”
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
“When we grew as fast as we did, there were some headaches and unexpected challenges, but we have a great team and we put in the extra hours in order to iron everything out. If there’s a problem, we fix it. We’re here fighting the same battle as a team, and it’s reflected in our sales numbers.”
“Ironing everything out” included installing more staff, such as warehouse employees and drivers so product could be efficiently stocked and delivered. And many of his department’s improvements were in refining basic, everyday processes: how parts are ordered, staying on top of parts coming in and out, and customer communication.
“We’ve installed a lot of SOPs to fix systems that were inefficient and unstandardized — many of them were simple but necessary, such as how customer information is entered so everyone’s doing it the same way. The special order process was broken, so that was revamped and corrected, too.
“It’s important to make sure there’s a process in place for everything we do that’s executed in the same exact way, so that anyone can look at the computer and know exactly what’s going on with any order at any time.”
Selling service, not parts pricing
As the collision industry prospers in the Denver-metro region, Schmid has increased his wholesale collision sales by 15 percent since he took the department reins. He focuses just as much, if not more, on service as he does selling parts.
“We’re the secondary source for some of the MSOs and it often comes down to who will give them the cheapest price on parts, and they’ll take that over service,” he said. “Some of our competition will go a little deeper on price than us, but we take care of our customers — once they come to us, they don’t tend to leave. And if they do, for price, they often come back for our service, which is our No.1 concern when they order parts from us.
“They know they’re going to get the right part the first time, and we know where to go to get the part if it’s not in inventory, whether it’s out of state and we fly it in, or track it down wherever it may be. We do what we have to in order to take care of the customer and get them the parts when they expect them.”
Calibrating to customer feedback
When opportunity presents itself, Schmid will go out into the field with LHM’s outside sales representatives to meet with customers and ask how their shops are doing, as well as gauge how the dealership’s service is performing. If there’s an issue, he and his staff will fix it.
“We receive feedback from customers who also use other auto groups in town when they order a part, but we’re told it might take two to three days longer to get it than it would from us. When they get a part when they need it from us to take care of a customer, then it’s a win-win for everybody.”
Schmid has three counter people with more than 25 years experience and “they know who to talk to get our customers the right part.”
Tapping into price-matching
Schmid taps into price-matching programs, such as RepairLink and CollisionLink, as much as possible, which he also implemented when he came on board with the dealership.
“It’s a great opportunity to increase sales and the manufacturer takes care of us on the backend so we can ensure a profit turn. It accounted for $10,000 in sales just last month.”
Staff hadn’t been previously exposed to such programs that Chrysler offers.
“It was an eye-opening experience to show staff the different ways business can be gained that’s just sitting there on an estimate, which in the past would’ve been allowed to walk out the door. Now they’re sales that just keep increasing.”
Sales show no indication of slowing down, which is great, Schmid said, but they must remain focused on maintaining their level of service as business grows.
“It’s been a challenging experience, but it’s also been a lot of fun.”