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Time to Bring in THE CONSULTANTS?

Sometimes an outside expert is what a dealership needs to fix problems or to take the business to the next level.

All of the consultants interviewed by RV PRO say that most dealerships that successfully implement their strategies can begin to see some improvements in efficiency and/or profitability within months and in some cases even in days. They acknowledge that, in most cases, the bigger the challenge generally the longer it will take to fix.

Ask Chuck Marzahn of consulting firm Marzahn & King to describe what his job entails and his answer is surprisingly succinct.

“We find ourselves in the trenches with the dealership’s manager, looking over their shoulder, making suggestions how they could do things differently to improve upon what they’re doing,” says Marzahn, a partner in the company.

Don Reed, CEO of RV Max, describes his role somewhat similarly to Marzahn, although he bristles at the title of “consultant.”

“We like to tell everyone that we’re a training company – not a consulting company,” he says. “There’s a big difference between the two, because the trainer is going to do the same analysis as the consultant does. But where we’re different is that we bring the solutions to correct the out-of-line conditions and then we install them and we train people to use them and continue to coach and train.”

John Spader, president of Spader Business Management, says much of the consulting work his firm does boils down to two categories. “No. 1 is (when a dealer asks) ‘Come in and look us over and give me an assessment of where we need to improve.’ The second thing is to help them when folks have come to one of our training sessions first. They might have gone home and installed as much as they can … and (they say) ‘Come help me, we’re stuck at this spot. We’ve got the first half in but we’re stuck; come in and help us un-stick it.’”

In order to give readers a better sense of what consultants do, exactly, and the kinds of help they can provide dealerships, RV PRO recently interviewed representatives with six leading RV dealership consulting firms that have a specific focus on parts, service and inventory management. In addition to Marzahn, Reed and Spader, RV PRO also spoke with Gaylon Hughes, president of the RV Parts Academy; Gary Motley, president of Motley Consulting & Training; and Mel Selway, president of P.A.R.T.S. Inc.

Common Problems

While acknowledging that every business is different, the consultants interviewed by RV PRO say they tend to find many of the same problems at any dealership they call upon.

“Fortunately, it’s the same,” Selway says of the problems he’s asked to rectify when consulting with dealerships. “The (store) volume might be different, the personnel hierarchy might be a little different, but the basic tenants are all the same. … It’s the same fixes.”

For Selway, the common denominator he sees in dealership operations is the need for greater efficiency. “You ask most dealers and they’ll tell you they don’t have enough room and they don’t have enough people, so it comes down to efficiency,” he says. “I teach efficiency. If I can make your technicians more efficient and if I can make your parts associates more efficient maybe you don’t need as many of either one, and you can still get the same amount – or more – of work done.”

For his part, Reed says that too often he finds shop productivity is far below acceptable standards, often averaging only 50 to 60 percent. And too often, he adds, dealerships are focused on warranty work and internal repairs rather than on the paying retail customer.

“In many stores, the retail customer comes dead last. It seems to me, especially in the times we’re in now, the retail customer needs to come first,” he says. “There are lots of benefits of taking care of customers in addition to increased labor and parts sales. … Because you keep that customer coming back to your service department there is a very high propensity for them to come back to you when they’re ready to upgrade to a different type of unit or a larger unit. So you’re going to get more business in the long run.”

Hughes sees insufficient training of parts employees as a failure at many dealerships – one that he attempts to correct by teaching parts managers and associates marketing techniques and up-selling strategies. “Most of the time parts employees are just hired and literally the only training they have is they’re told ‘the (holding tank) chemicals are over there’ and ‘the hitches are over there.’ They have no formal retail training at all.”

Motley sees a similar problem on the service side of the business. “Who has taught the service advisor to do (up-selling)? I can tell you who. Nobody,” he says, adding that often one of his roles as a consultant is to encourage dealerships to pick between five and 10 areas of up-selling that are good profit centers, such as wheel bearing repackages or air conditioning service.

Motley says another problem he sees is that, all too often, parts advisors simply act as order takers. “One thing a dealership needs to do is: They don’t just need to be the dealership that sells (the customer) a new vent. It’s the beginning of an opportunity to establish a relationship with the customer. The way you do that is by telling him … that there’s maybe a better vent he could buy, or what supplies he’ll need if he intends to fix it himself.”

All of the consultants interviewed by RV PRO say that most dealerships that successfully implement their strategies can begin to see some improvements in efficiency and/or profitability within months and in some cases even in days. They acknowledge that, in most cases, the bigger the challenge generally the longer it will take to fix.

Hughes notes in example a female parts manager in the Tri-Cities area of Washington State who saw quick results by implementing his “good, better, best” strategy of retailing aftermarket accessories. “She started doing this and immediately the dealership went from selling nothing but the low-end product to nothing but the high-end products. So the company started seeing more sales immediately, just from implementing that one simple strategy.”

Jamie Dodd, president of Dodd RV, says he was very pleased with the results his business achieved after hiring RV Max to improve his parts and service operations in 2007. Dodd, whose business hired RV Max to do consulting with his dealership one week per month for one year, estimates that his service operation profitability increased by about 18 percent.

“They did bring some good ideas to us to help us improve our operations,” Dodd says, adding that his dealership later hired RV Max to come back and do training for the sales department. That part of the business also subsequently saw profit gains of about 14 percent, he says.

While setting targets for profitability and efficiency are worthwhile, Marzahn emphasizes the importance of taking a big picture approach to improving dealership operations. “What we look for is that the business is growing to reach its potential, that the managers are more confident, that the customers are happier and that the business is going more smoothly as a result of the effort and the time that we put into it. I guess the greatest gauge of that is whether or not the dealerships have us back,” he says, adding that they usually do.

Consultants: Who Needs One?

So who is a consultant’s “typical” client, assuming there is such a thing? The consultants who spoke with RV PRO say that they’ve consulted with dealerships of all sizes, but say that most clients tend to be medium-sized businesses or larger, and dealerships that have been in business for a number of years, versus new operations.

In most cases, the consultations experts do with dealerships tend to last between two and three days, sometimes followed up by monthly or quarterly visits. With onsite visits, the first day is often spent touring the facility, noting areas that need correction and developing a plan to correct problems. The remaining day or two are often spent in intense training sessions with owners, managers and other affected personnel to get them to begin putting the new operational procedures in place.

Consultants say that in some cases they can also do consultations over the phone or online, which can reduce expenses. “More and more we’re finding that we can help by dialing in and working with the manager even on their own computer system,” Marzahn says.

To ensure that dealerships follow through with any changes outlined by a consulting firm, the consultants say they employ a variety of methods to encourage follow-through.

Motley says that once he’s returned home from a consulting job he follows up with the dealership via phone or e-mail and attempts to get the ownership to commit to a set timeline to institute changes. “Then I get back with them every month or two … and ask ‘How are you coming on that? What have you tried? What have you not tried? Do we need to tweak or adapt what we’re doing? Is there a way I can help you?’ I like to get back with them and let them know I care about them and that I want them to succeed with the ideas I’ve given them,” he says.

Similarly, Hughes says that at the end of training sessions with parts employees he gives them “homework” assignments. “Usually when I get done … each student gives me a list of what they’re going to do at the end of 30 days and 60 days. It’s a specific thing they’re going to have accomplished. And then I check back with them to see if they have done what they said they were going to do,” he says. In many cases, the goal may not be finished by the first deadline, but with prompting it is by the second target date, he says.

Spader notes that Spader Business Management offers its customers the opportunity to call the business at any time if they have questions or need more information. “Another part of our difference is that we have a help desk,” he says. “So anybody who is a client of ours – 20 Group, training or consulting – can call the 800 number at any point and time and that’s part of our fees. … They can always get a live body answering our phone. In most cases they’ll get right through so (dealers) get their questions answered and move on. We want dealerships to be successful.”

Selway also offers free follow-up phone consultations, within certain limitations, for dealerships he works with.

The cost of hiring a consultant ranges widely, depending upon such factors as which firm is employed, what services are requested and the duration of the consultant’s services. The consultants interviewed by RV PRO indicated that day rates range anywhere from $1,000 to $1,500, while jobs by the project can cost upwards of $10,000. Some consultants offer payment plans.

Notably, Reed’s RV Max and Selway’s P.A.R.T.S. Inc. both guarantee that dealerships will recoup the cost of their consulting services, provided the dealerships give implementation efforts a sincere effort.

“We guarantee you get a 100 percent return on investment,” Reed says. “We’re not afraid to put our money where our mouth is. We know that our processes work.”

Selway says during his 18 years in business only two businesses have taken up his offer to seek partial refunds because they didn’t feel all of their needs were met.

The six consultants told RV PRO that, as a general rule, they don’t recommend dealerships they consult with add personnel or buy extra equipment.

“Certainly now is not the time … to make recommendations on head count without some revenue stream that’s attached,” Marzahn says. “We don’t often have equipment recommendations. We will sometimes recommend vendors or information systems, but I’d like to stress that we don’t make a dime off of those recommendations. The more common outcome is that we recognize lapses in execution of existing processes, or the need for non-existing processes to be implemented.”

“Rarely do we make recommendations for extra equipment,” Reed says. “Most of the dealers have the resources they need. Of course, the No. 1 resource is people. … Most dealers have good people, they just have bad processes.”


 

The Consultants – Who They Are...

 

Marzahn & King Inc.
Principals: Chuck Marzahn, Tom King
Headquarters: Virginia Beach, Va.
Website: www.marzahnandking.com
Phone: 757-227-6646
Years in Business: Since 2005
Prior Experience: 13 years, including executive consulting positions with Gorman Planning and Integrated Dealer Systems.
Why Them? In part, because Marzahn & King focuses its consulting efforts on the store managers who handle the daily operations; because the business offers “virtual 20 Groups,” resulting in less time lost in physical meetings and lower expenditures; and because the firm doesn’t require a long-term commitment from dealers. “If we don’t earn the dealers business while we’re there (at the dealership) we don’t want it,” Marzahn says.

 

Motley Consulting & Training
Principal: Gary Motley, president
Headquarters: Oklahoma City, Okla.
Website: www.motleyrvrepair.com
Phone: 405-640-2789
Years in Business: Since 1998
Prior Experience: More than 45 years in the RV business, as a shop owner manufacturer’s rep and dealer.
Why Him? Motley is a certified master technician who still owns and operates a successful repair shop. “When I’m in town, I still go to my shop. And I have a toolbox. And I go out there and turn wrenches,” he says, “and I will continue to turn wrenches because I want to keep my skills up and continue to learn.”

 

P.A.R.T.S. Inc.
Principal: Mel Selway, president
Headquarters: Amado, Ariz.
Website: www.mcdealershipsolutions.com
Phone: 888 2 GET MEL (888-243-8635)
Years in Business: Full-time since 1990
Prior Experience: Positions as parts manager or parts director for automotive and powersports dealerships dating back to 1979. Designed inventory analysis software for major computer vendor in 1985.
Why Him? An extensive consulting career with an emphasis on inventory management, the ability to offer customers payment plans and a guarantee that dealerships will see increased efficiencies and/or profitability if they implement his plans.

 

RV Max
Principals: Don Reed/ Michael Rees,
co-CEOs
Headquarters: Gahanna, Ohio and Valrico, Fla.
Website: www.rvmaxtraining.com
Phone: 877-RV-PROFIT (877-787-7634)
Years in Business: Full-time since 2000
Prior Experience: Reed has 37 years combined
experience in the RVand automobile industries.
Why Them? Reed’s personal experience as an RV and automobile dealer, backed up by a guarantee from RV Max. “We guarantee (dealerships) a 100 percent return on investment. … We’re not afraid to put our money where our mouth is. We know that our processes work.”

 

The RV Parts Academy
Principal: Gaylon Hughes, president
Headquarters: Boise, Idaho
Website: www.thervpa.com
Phone: 208-376-4761
Years in Business: Since 2005
Prior Experience: 22 years in the industry. Worked as a parts manager for various dealerships and owned a dealership.
Why Him? “I don’t know of any other consultant who actually sits down with employees and trains them directly. Most consultants work with the dealers and the management in the higher level … and that’s supposed to trickle down to employees. I want to work with employees directly so that it is disseminated to them properly and that they really understand it.”

 

Spader Business Management
Principals: John Spader, president/ Duane Spader, founder
Headquarters: Sioux Falls, S.D.
Website: www.spader.com
Phone: 800-772-3377
Years in Business: Spader Business Management
has been in business for more than 30 years.
Prior Experience: Duane Spader opened and operated an RV dealership
in the 1960s. The business continues in existence today.
Why Them? Spader notes the company’s long history of working with dealerships, its extensive database of dealership financial reports and its experience working in other industries. “We’re in about a dozen different industries, so we bring a cross-industry perspective as well,” Spader says.