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Training case or a basket case?

'What makes a dealership highly profitable? No doubt you could list quite a few essential ingredients, and many people would put franchise at the top since, according to industry folklore, some franchises are a licence to print money. But how many of us would place well trained and highly motivated staff, who are good at their jobs, at the top of the list?

We had a call from a dealer group with two sites in its portfolio that operated the same franchise. The problem was simple. One site was making money, and the other was barely profitable. Yet the two were almost identical – the same franchise, similarly-sized premises of corporate design, excellent high profile locations with good access and comparable staff levels.

Looking through the management accounts, we found expenses and overheads were virtually the same. However, sales and gross margins were lower in the poorly-performing dealership, particularly in aftersales. Drilling down, we found a big difference in the efficiency of the two service workshops that was caused by higher levels of rectifications – 'comeback jobs' – at the poorly-performing dealership.

The next step was to visit both dealerships. They proved to be very different, and the the difference was the staff. The employees at the successful site were buzzing and confident; the employees at the unsuccessful site looked tired and harassed. The answer was hanging on the wall of one – training course attendance certificates. The dealership that was minting money had up-to-date certificates in the showroom, service reception and at the parts counter. The basket case had just enough to meet franchise minimum standards.

The 2004 RMI/Sewells Pay Guide suggests franchised dealer staff should attend short courses every two years. But is two or three days' training every two years really enough, especially as staff turnover averages 19 per cent for franchised dealers?

And if you are still not convinced that an above average training commitment will not make a difference, then think about your own circumstances. Could you be more efficient and effective if you were better trained?'

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