Automotive News Canada - December 2017 - 19

* DECEMBER 2017

At Northstar Ford in Fort
McMurray, Alta., tracking lost
parts sales sharpens ordering
policy.

Northstar Ford's Snow instructs
his employees to log every lost sale
in the dealership management system when they look up a part, even
if a sale is unlikely because of cost
or customer distance.
A "lost sale" is defined as
demand a dealership couldn't, or
didn't, fill. The classic lost sale
occurs when a caller asks about a
part, but doesn't order it, perhaps
because of price, delay in delivery
or simply for being put on hold for
too long. The term also applies to
an inquiry about a part the dealership might stock, but which the customer doesn't buy for whatever reason, or a part that is ordered for a
customer who never returns to pay
for it.
Just one or two calls for a part
might indicate demand, informing the parts department's stocking
forecasts and determining whether
a part is needed. Such information
helps Snow decide what to order
and stock, he said.
"Those lost sales are building
hits. They're calculating data for
us."

management and sales staff. TagRail's platform syncs with smartphones and iPads and uses their GPS
technology to track the time and
distance of each test drive and compares it with the dealership's average. It's an important metric because
longer test drives lead to improved
closing ratios, Culic said.
"We know a test drive that's one
kilometre long and lasts four minutes isn't acceptable because it
doesn't bring value to the table," he
said. "TagRail helped us figure out
what a good average would be." The
dealership's average is 22 minutes
and about six kilometres.

QUICKER SALES
In addition, TagRail's platform
includes features that streamline
the often drawn-out sales process,
a pain point for many customers.
For example, the platform allows
sales staff to work side by side with
customers, examining and pinning
down details such as the sale price,
down payment amount and interest
rates. They can even approve tradein values without repeated trips to
the sales manager's office - another sore point with customers.
"They can basically complete
the transaction, then go to the F&I
office to discuss different protections," Culic said. "If the test drive

Rick Heronime, COO of
Dealership CSI, a parts-and-service consulting company in Rancho
Santa Margarita, Calif., said that
dealership-management systems
"have a great special-order management function built into them,
if we use it properly." But many
parts departments don't train
counter staff to use these features,
he said.

CHECKING TECHS
Schick posts a report every
month that breaks down the percentage of unused parts by service
technician.
That helps motivate techs to be
more careful about the parts they
order, Schick says.
"If I show all the techs a pie
chart, and 75 per cent of the returns
have one name on them," he said,
"that's a conversation starter."
Heronime said that a well-managed parts inventory consists of
80 per cent regular-demand items,
eight per cent special-order items
and the rest in parts that will be
automatically phased out as they
reach the end of their life as regular stock.
Maintaining these ratios
requires parts managers to monitor inventory data constantly, especially the status of special-order
parts, Heronime says.
These tasks are even more crucial, he adds, as some automakers
cut their return margins.
Says Heronime: "You can't
keep all this in your head or fly
by the seat of your pants anymore." - ANC

takes about 15 minutes, the sale can
be finalized within about an hour.
Customers absolutely love that."
TagRail's platform costs the
dealership about $2,870 a month.
But Culic said it has delivered a
good return on investment. The
closing ratios at Downtown Toyota,
which sold 1,000 new and 350 used
vehicles in 2016, have increased
about five percentage points.
Overall sales are up about 11 per
cent over 2016 levels, he said.

NO SALES MANAGER
It took about two months for
employees to learn how to use the
TagRail platform effectively, but the
benefits make it worthwhile.
Perhaps one of the most telling
indicators of the platform's success
in transforming the sales process is
the fact that the dealership now has
no sales manager.
"We no longer need one," Culic
said. "Every sales-team member is
fully accountable - empowered to
make their own decisions.
"It's all about a team now, rather
than employees versus the chain of
command," he said.
"It has totally changed the
dynamic between management and
sales staff, which in turn provides a
much better experience for our customers." - ANC

The Lyft ride-hailing service has approached other cities in Canada, according
to news reports, but won't comment on future plans. ( P H O T O : LY F T )

Lyft rides into Toronto
amid Uber follies
Ride-hailing company
says its business model
treats people better
By JOHN IRWIN
TORONTO BUREAU

TORONTO - LYFT'S ARRIVAL IN
Canada will give Uber something it
largely hasn't seen in Canada since
arriving in 2012. Competition.
Lyft, easily Uber's biggest competitor in the United States, began operating in the Toronto market Dec. 12,
finally giving Uber its first major competitor in Canada since it began operating in 2012.
Lyft's arrival comes at a critical
point for Uber, which has faced a slew
of controversies in Canada and globally over the past year. Most recently, it was revealed in November that
the company concealed a hack that
exposed data on 57 million users
worldwide. Meanwhile the ride-hailing service has battled with Quebec
and British Columbia over the ability
to operate in those markets.
For its part, Lyft has kept a comparatively low profile, avoiding the
controversies that have plagued Uber
over the past several years even as it
and Uber find themselves as the targets of labour groups and taxi services that view them as exploiting
cheap labour.

REPUTATION ADVANTAGE
Lyft stated in an email to
Automotive News Canada that the
company plans to use its cleaner reputation to its advantage.
"What sets us apart is the Lyft
experience. We know that by treating people better, whether that's drivers, riders or regulators, we make
the entire Lyft experience better for
everyone involved."
Uber did not respond to requests
for comment.
Uber has been attempting to rehabilitate its reputation, which faltered in the final months of founder Travis Kalanick's tenure as CEO,
due to security concerns, labour
activists and fights with regulators. Dara Khosrowshahi took over
as Uber's CEO in August and has
pushed for several changes to the company's culture, including new rules
for employees such as, "Do the right
thing. Period."
CBC News reported in November
that Lyft executives met with city officials in Ottawa, while the company

* Founded: 2012
* CEO: Logan Green
* Markets: 300+ cities in the United
States; was set to expand into
Toronto in December
* Investors: Among others, General
Motors, which invested US $500 million in Lyft in 2016. GM President
Dan Amman sits on Lyft's board
has filed paperwork to expand into
Hamilton.

LOOKING FOR A 'GREAT FIT'
Lyft would not confirm if it is working to open in any other Canadian
markets, only saying that "a number
of other Canadian cities" would be a
"great fit" for the company.
Tony Faria, co-director of the
Office of Automotive and Vehicle
Research at the University of
Windsor, Ont., said Lyft's expansion into Canada is another sign
that there is growing demand for
ride-hailing services in the country
and that traditional business models
in the automotive industry could be
under threat long-term.
"Ride sharing is going to grow.
There seems to be far greater willingness by consumers in the market now
to, instead of owning their own vehicles, use available vehicle services to
get around," Faria said. "There's massive changes going on in the industry, and it's going to mean significant
changes for all parts of the industry,
from producers themselves to automobile dealerships, repair shops, everything."
Lyft said it would offer a 25 per
cent bonus to the first 3,000 drivers in
the Toronto market who sign up and
complete 20 rides per week.
"There is also an existing pool of
potential drivers who have already
expressed interest/opened an application but were not able to move forward since we weren't yet in the city,"
Lyft's email stated. "We're reaching
out to them to let them know they're
now able to sign up."
Lyft said about 50,000 people in
Toronto downloaded the Lyft app
since the beginning of 2017, potentially showing demand for the service
although it was unavailable in the
city. - ANC

Table of Contents for the Digital Edition of Automotive News Canada - December 2017