Last year, for two months in a row, Scott Campbell promised each of his parts and service staffers a big-screen TV if their department met sales goals.
They worked hard and increased their productivity -- but fell short of the goal each month.
So Campbell, the general manager of My Auto Import Center in Muskegon, Mich., issued the challenge again in March and April 2010. He raised the bar and greased the way with $4.99 oil changes.
On May 5, Campbell shelled out about $30,000 for 25 50-inch plasma TVs.
Campbell says his employees are thrilled, and he's on his way to increasing the store's absorption -- the extent to which the service and parts department covers the store's fixed costs. Campbell's goal is 100 percent absorption in about 18 months, compared with 77 percent now.
"Sales are volatile; service isn't," says the 30-year-old general manager. "People are keeping their cars longer. If your dealership expenses are covered 100 percent by your service department, then everything we sell on the front end is just fun."
My Auto Import Center sells Toyota, Scion, Audi, Volkswagen, Nissan and Subaru vehicles. Through April, the store sold an average of 80 new and 65 used vehicles a month. Campbell says repairs of recalled Toyota vehicles during the service department challenge helped the dealership's labor hours "but was not the real reason we had huge growth."
Two years ago the service department averaged about 1,600 labor hours per month, Campbell says. That grew to 2,500 last year and 3,200 so far this year.
Campbell has not added technicians. He says his current staff -- with a little more motivation -- is capable of 3,800 labor hours per month. He plans to add five or six technicians to bring the average to 5,600 labor hours a month by mid-2012.
In last year's contest, the department's goal was 2,900 labor hours a month. Although the department fell about 100 hours short each month, business grew 43 percent for the year compared with 2008, Campbell says.
"Because of how much we'd grown, I had to set a new bar," he says.
So the goal this year was an average of 3,500 labor hours a month for two consecutive months. The department racked up 3,464 labor hours in March, generating $261,000 in labor sales, and 3,545 labor hours in April, generating $247,000.
Campbell helped attract customers by sending e-mails touting free vehicle inspections and $4.99 oil changes.
Campbell says about half of the repair orders at My Auto Import Center are oil changes, which are loss leaders. But each of those vehicles is thoroughly inspected, and needed maintenance and repairs are pointed out. Oil change customers purchase repairs and services about a third of the time, he says.
Mark Leutzinger, the dealership's service director, says the goal is customer retention. Customers who stray to other repair shops are put on those shops' mailing lists and "get bombarded with their coupons, and we don't want that," says Leutzinger.
The TVs aren't the only prizes won by My Auto Import Center service staff. Last October they earned the Friday after Thanksgiving off.
Campbell and Leutzinger are putting their heads together to come up with another prize to motivate employees. Among the possibilities: trips to a Major League Baseball game; a weekend fishing excursion; and use of a vehicle for a month.