Issue Date: Service Advisor Dec 1, 2008, Posted On: 12/1/2008
Quick Hits: Keys to service success in today's market plus an idea for "electronic up-selling" Marketing, selling service, and getting customers back for maintenance are three essential elements of success in today's dealerships.
Today, as always, dealerships rely on profitable service operations to carry them through tough sales markets. Service advisors cannot sit back and wait for customers to walk through the door. Gone are the days when the dealership was selling enough new and used vehicles to keep everyone comfortable.
Gone too are the days when the dealership's shop was the customer's first option for service. The proliferation of quick service places has seen to that. And the decline in new vehicle sales means that fewer customers are coming back for warranty work.
"Given the reduced profitability of the new car department, 100 percent service absorption is necessary these days," says Gene White, president of Gene White Management in Slidell, Louisiana. He refers to the goal of having the gross profits from the service, parts, and body shop departments cover the dealership's total overhead expenses.
Gene correctly points out that not only are new vehicle unit sales down, but gross profits are down too.
Don Tipton, president of DTC Retail Consulting in Jacksonville, Florida, agrees with the need for service advisors to get more comfortable with the idea of up-selling labor and parts.
One reason is that the traditional market segmentation among dealership service customers has fallen by the wayside. Leasing customers were never big purchasers of service and with leasing being discontinued by some big financial players, that trend will only get worse.
Used car buyers aren't the same animal they once were either. Traditionally, notes Don, these vehicle buyers weren't considered good service prospects. Now, though, with dealers selling certified used cars and nearly-new-vehicles coming off lease, the bulk of pre-owned car buyers are really "barely used" car buyers who need to be encouraged to bring their vehicles to the dealership for service.
Electronic up-selling Here's an idea we picked up from Lloyd Schiller, president of NCM/Dealer Service Corp., in Boca Raton, Florida. Any service advisor with a camera-equipped cell phone or a digital camera can use it.
As more and more customers indicate e-mail as their preferred means of being contacted by a service advisor, why not take this trend to the next step and send your service customers a picture of the needed repair area. This is akin to the old method of walking a customer out to the shop and showing him the worn out or damaged parts while the car was still on the lift. This "show and tell" is a very effective selling tool.
The customer no longer has to take the service advisor's word that the repair is needed. For customer pay work, worn brakes, shocks, and tires can be seen on the customer's own computer screen. Torn boots and broken joints can also be visually displayed.
For customers with extended service contracts, sending a picture to the contract provider can speed up the approval process - "Here's the problem, now give me my authorization, today." The dealership gets paid faster and the technician gets back to work sooner.
And for cars covered under new-vehicle warranties, a digital photograph can document the time and difficulty of a repair when you are trying to get paid for straight time.