To learn more about this topic, click here to listen to Scot on the AutoSuccess Podcast, ‘Service Revenue Leaks’.
In many dealerships, service revenue is leaking away in the form of lost opportunities from customers that bring their vehicles in for service. In fact, the average dealership only captures half of the service potential from vehicles in their service lane.
Learning how to identify and stop these common leakage points will result in more opportunities and ultimately, more revenue.
A primary reason why customers fail to approve additional repairs is because of a failure to communicate. Too often when a customer drops off their vehicle to be serviced, a game of phone tag ensues.
Leaving a voice mail and hoping that the customer calls back isn’t the best way to convince and convert. Consumer Reports recently found that thanks to the rise in robocalls, 70% of consumers no longer answer phone calls they don’t recognize. Yet, 90% of text messages are read within three minutes.
To increase customer approval rates, incorporate the use of texting. Service advisors should ask customers for cell phone numbers and text them immediately, before they leave the service lane. Ask the customer to be added as a known contact. Text videos as visual proof that repairs are needed, and provide loaner cars or pick-up and drop-off service if the additional repairs will leave customers stranded.
Customer trust starts with an effective sales-to-service transition. At the time of purchase, few dealers inform the customer when they’re due for their first oil change, tire rotations and other routine maintenance.
Create a service plan for every new customer so they’ll be prepared for maintenance and repair items. When a customer comes in for an $80 oil change and gets hit with a $1,000 estimate, that person is not mentally or emotionally prepared to spend that much, so it’s easy to delay the decision.
Additionally, customer trust is often undermined with aggressive over-selling of questionable “dealer recommended items.” A more effective technique for gaining customer trust is “vehicle like mine,” recommendations. These inform customers about services that may be needed based on make/model and miles driven. This information can be instantly pulled up on a mobile tablet so the customer can be informed about potential repairs before they leave the service lane.
Antiquated Selling Techniques
One of the biggest problems with variable pay plans is that service advisors are still incented to present the customer with all-or-nothing repair options, instead of breaking them out into red/yellow/green recommendations.
When you present “all-or-nothing” items, too often you end up with nothing. Red/yellow/green recommendations mentally prepare your customers for upcoming repairs and expenditures.
Unfortunately, the red/yellow/green model may be seen as a failure to sell in some stores, and service advisors fear they won’t get credit for a recommendation when the customer returns in two months.
It’s time to overhaul pay plans so employees are rewarded when customers return to your store, and not for trying to make a killing every time a customer comes in.
Too many dealers still expect consumers to conform to their convenience, rather than the other way around.
Earlier this year, my son had his vehicle serviced while we were on vacation. We returned on a Sunday and went to pick up his car, only to discover the service department had closed early for Father’s Day. While I appreciate that they honored Father’s Day, I couldn’t believe there was no way for us to retrieve the vehicle. The sales department was open, but the salespeople weren’t the slightest bit interested in helping us. In an ideal world, we would have used mobile pay to pay the invoice, the car would have been parked outside and the key left with the receptionist or sales department.
Too few dealers have Sunday service hours or evening hours and think that two weeks is an acceptable backlog. In an increasingly instant-gratification culture, these practices are no longer acceptable, or even commercially viable.
When a service department is closed on a Sunday, it’s like going to a CVS Pharmacy on the weekend and the pharmacy is closed, or going to a mall and the Macy’s is closed. Customers rightfully interpret that your business doesn’t really care about what’s convenient for them. So, naturally they look elsewhere for a business that caters to their needs.
Stopping these common service leakage points may require some changes in policy and best practices, but the ability to capture lost opportunities from current customers will have a net positive impact on your bottom line. Perhaps even more important, it will keep your dealership competitive with increasingly aggressive independent repair facilities.
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Articles | DATE 09, 2019