Dealerships are facing big changes in the way their businesses work. New and used car margins are slipping while interest rates; advertising costs and other expenses are skyrocketing. Finding and retaining good employees — especially technicians — is getting harder and harder.
“We are in the midst of seeing more change in the next five years than we’ve seen in the last 50 years,” said Mary Barra, General Motors CEO recently.
What is a business supposed to do in these circumstances?
The answer is… FEED the part of your dealership that MATTERS MOST to your customers…and continuously brings your customers back for more”. IT’S THE SERVCIE DEPARTMENT”! That’s the part of your business that maintains $47 in profit for every $100 of sales it makes. Add to that a whopping 74% of customers who are likely to return to buy their next car with your dealership, after routinely relying on you for your excellent service. So it’s vital to get your customers set up in a good relationship with your service department from the very beginning.
But because most dealers and general managers started their careers in showrooms, service lanes can seem awkward and uncomfortable for them.
What if your salespeople understood how much impact a good service tour has on retaining the customer? What if they took each and every prospect interested in purchasing on such a tour, 100% of the time? Would that sell more units?
The best approach is to begin by teaching salespeople to do a customer-forward, friendly and thorough “Rock Star” service tour plus a “Rock Star” sales-to-service handoff. This has proven to build each customer’s relationship with the dealership through the service side. What if your salespeople used this technique 100% of the time? Would it sell more units?
A successful dealership continues to invest in training?
A dealership that I visited was already turning in the best numbers they’d ever had. In fact, the first and second quarters were the best months in the dealership’s 48 year history, and 2018 was the best year in their 48 year history. The industry average for owner retention rate comes in between 33-40%, and theirs was 82.5% Similarly, their 2018 absorption rate was 86.4%. So, why would they want to change anything?
They decided to address these two opportunities even though they were very successful in their current efforts.
This is what the dealership’s general manager had to say about why such a successful dealership was eager to improve even more while they were already performing at such a successful pace:”I’ve done extensive training programs in the past but I knew a successful service tour and an improved sales to service launch would further help our dealership. And that is exactly what it did.“
A well-trained team leads to larger profits
Helping a dealership toward their goals starts with understanding the entire sales and service relationship. A customer’s experience with your business begins during the sales process, but continues throughout the ownership journey.
A few important benchmarks to consider: Only 41% of customers are introduced to the service department at the time of their purchase–and that’s for new car buyers. The service handoff for used car sales is virtually 0%, and that’s poor thinking, considering used cars are likely to need service or repair sooner and more often.
53% of customers who took a service tour said that it was a strong influencer when it came time to deciding where they would repair their vehicle. So what would happen if 100% of your customers, both new and used buyers, were given a great service tour and a great sales to service handoff?
Putting ideas into action
Educating salespeople in these areas, explaining how it can positively impact their personal income opportunities, and showing them precisely how much it can impact their paycheck is what gets them to “buy in” to the idea of using this “Rock Star” service tour and handoff.
It’s also important to include service managers and directors in training on both of these areas. Many times dealerships feel it’s not necessary to have the service managers in the Sales to Service training sessions, but there are benefits to doing so. This allows them to see how much better it can be for both sales and for their service advisors, as well as seeing how much it could improve their own personal income. Also, they can offer information about the terminology and concepts used during training, which immensely improves their effectiveness.
Further making these steps work requiresteaching them exact words and phrases to do a proper, effective service tour and sales-to-service handoff, followed by hours of one-on-one time with individuals to practice, drill and rehearse until a great tour and handoff becomes second nature to them.
Dealerships that have improved their sales-to-service handoffs and service tours share that it not only impacts their bottom line, but their sales and service staff also become more engaged in the entire ownership experience.. Recently dealers are recognizing the vast importance of building a great customer relationship with the dealership, and this is a proven way to accomplish that as well as keeping your customers coming back.
Hembrough Business Systems
Loves Park, IL 61111
Now is the time to get into the
REAL SERVICE BUSINESS
The record breaking sales pace we have enjoyed for the last several years, plus the amount of incentives that have moved future buyers into today buyers also seems to be scaling back, indicating that a sales slowdown is inevitable. Perhaps it is already happening in your market. The question everyone is struggling with is how long it will last and how severe it will be? And the bigger question is, what do we do about it?
The answer is finally step up and give the same attention to the service department that has been given to sales department year after year. For the past years the focus dealers have been concentrating on has been the Digital Changes taking place in our business. Very few dealerships recently have been taking the time to address the service side of our business.
Over the past years while working with dealerships, it had become obvious to me that very little has been done to truly address the issue of poor Owner Retention. This, like many of the issues, has to start at the top. We must start out by educating everyone in the dealership that industry averages state that 2 out of 3 people, when their vehicle runs out of warranty, owners start taking their vehicles to independent repair facilities for their service work.
Another glaring area, we need to review the way we have been selecting our people in the past. Think about a service advisor, do we hire for technical skills or relationship building skills? An extension of this is the need to update our pay plans. Is Owner Retention even a part of any of your service pay plans?
In a recent article I asked the question: “Who’s the best salesperson in your dealership?” Let me rephrase the question: “Where does your service advisor rate in best salespeople in your dealership?” Probably not at the top. So continue that question and ask yourself how much training do Service Advisors get when it comes to selling skills, over-coming objections, closing techniques, relationship building skills, listening skills?
As we work to adjust for the ramping down of the Factory Incentives, wouldn’t it be nice if your dealership had Service Absorption of 85% and you were working to get it to 100%? It can be done but not by following a 10-20 year old service model. What if your service department was a “Well oiled Selling Machine?’ What if your Service Advisors were trained to be your best salespeople, and to really understand how to build trust with people? One common objection I get from Service Advisors is, “we don’t have enough time.” Think of your top salesperson and how much time they spend with their customers. Do they spend more time or less time than your least productive salesperson? Much less time is needed because they know how to build relationships. They know how to control the conversations and make the best use of their time. This is what I teach. I teach Service Advisors how to do things differently than what they have been doing in the past by designing individual programs for them to help them develop into Advisors that are prepared for the Today service customer.
Brian Benstock is someone I follow closely and I heard him being asked whom he used as a role model or benchmark for decisions in his dealership. He stated: “I don’t use automobile dealerships. I use Amazon. I use Apple or Whole Foods, businesses that have figured it out.” He went on to explain his service department is now open 24 hours per day and they have 70 porters that do pick up and delivery.” That is outside the box thinking.
When customers come into your dealership they want service advisors to get things repaired on the first visit. They simply want your service advisors to get things done for them. That’s what your top salesperson does when they are in front of the prospect. They get things done, without friction, without hassles. They create a feeling of confidence with the prospect they are working with as someone that knows how to get things done and get things done right.
85% Owner Retention – 85% Service Absorption – $85,000 average income for a Service Advisor. If these 3 numbers were being attained in your dealership today, how much would that have increased your bottom line? So, the decision is: “Do I keep doing what I have been doing, keep getting what I have been getting, or do I start today to change the dealership paradigm and concentrate on my outdated Service model and get prepared for the future?”
It starts with a phone call. We’ll discuss your current results, your challenges, you’re staffing. Then you can ask how I have addressed situations like yours in the past, what results I have gotten for other dealerships, how long it took, what changes needed to be made, and then the most important question, what I feel I can do for your dealership. After that you can make an informed decision as to whether it is a good business decision for your dealership.
One thing we know for certain, not discussing these questions is going to cost you money. Vehicle sales are not on the increase. Factory incentives are not going to be more lucrative. Hiring and retaining good technicians is not going to get easier. Ignoring these items will cost hundreds of thousands of dollars if they continue to be ignored.
So what’s the benefit in waiting?
Call today – 815-978-5038 and let’s create a plan for making your dealership service department “A well-oiled Selling Machine.”
It’s Decision Time – OR NOT?
The ANSWER –pick up the phone NOW
call Scott Hembrough at 815-978-5038
or send an email to: hembrough.scott@gmail
CONTROL YOUR PROFITS NOW
The training you don’t take can’t help you.
Scott HembroughHembrough Business Systems815-978-5038EMAIL: firstname.lastname@example.org
This is module #2 of my training program: “Becoming a 2020 Service Dept. TODAY” designed specifically for Service Advisors.
This is a MUST WATCH – you will see all of the opportunities to increase service sales and dealership profits.
Service Advisors will see how they can make $100,000 per year selling service.
CELL: 815-978-5038 EMAIL: email@example.com
I invite you to view Part 1 (for managers) of Becoming a 2020 Service Dept. TODAY – the Directional Team