I recently had the opportunity to participate on a Program called Profitability MD.
Dave Mulvaney and Matt Hudgins were the hosts, they help business owners make more money, have more freedom and enjoy the journey all at the same time.
Here is a link to that session.
Click here – to view.
If you are ready to stop leaving hundreds of thousands of dollars on the table, call and I will explain how I have made it work in other dealerships and how we can make it work in yours.
1.How to provide Exceptional Customer Service.
2.RETENTION is the Holy Grail.
Millions of consumers are multi tasking on their mobile device: conducting business, making online purchases, placing food orders, searching for vendors, and communicating with family and friends. Ironically, franchise dealers seem to be ignoring these trends.
Dealers need to re-examine their service lane process in order to create a retail experience that attracts and retains customers. Service generates 7 – 10x more consumer transactions per month than sales. The latest data tells us the average R.O. is $268 and the average lifetime upkeep cost for a vehicle is $8,000 and this has a G.P. percentage of 46%.
Vehicle owners return to the same dealer and brand 50% of the time, which means a dealership can loose 1 out of 2 buyers over the ownership period. When you factor in that only 1 in 3 get their service work done in a dealership, that means under our current service practices nearly 70% will be going to someone other than us to get their vehicle serviced.
Owners have been telling us the two factors they dislike most about dealership service departments are:
- They don’t communicate well – they don’t keep me informed
- It is always going to cost me more than what I came in for
Some Service Advisors are still greeting their customers in the service drive with clipboards, pre-printed documents, and a pen. This process implies inflexibility and shows a lack of customer understanding.
When a consumer arrives at a franchise dealership, wouldn’t it come across more professional if we were aware of their purchase history, service history, greet them by name and immediately respond to their questions and concerns?
Dealership service centers need new technologies that will enhance shop efficiency, improve the customer experience and increase profits in order to stay competitive. This is also important if they want to begin to work on “Customer Retention”.
TO DO THIS WE NEED:
- Better-qualified and trained personnel throughout the service department.
- Improved shop efficiency and streamlined processes
- CRM and third party integration
- Improved and better “focused” upselling opportunities – designed for the “lifetime” customer not the “Highest Dollar/R.O. Amount”
- Modern – up-to-date internet/external communication platforms to more personally communicate with customers (video/texting)
All of these opportunities will improve the customer experience
* Customers expect their purchase experience to be only a click away.
Dealers KNOW that technology alone will not create a great experience in the service lane. However, great people, great process and great technology with all parties can create a positive, memorable, and convenient service experience.
- Customer satisfaction is increased by enabling real-time communications between service customers and Service Advisors, Technicians, and Parts Managers. Customers can be informed of parts availability/delays before they leave the dealership and/or while additional service recommendations are presented.
- Transparent communications between the service lane and customers utilizing photos/videos of undisclosed repairs which need attention helps set realistic service completion times, increases the accuracy of total repair costs, and decreases negative CSI scores.
- Customized “Steps to the Sale” allows a dealer to follow optimized service processes, which again reduces negative CSI scores and increases shop profits.
- By reviewing historical data, this allows the Service Advisor to re-engage customers who have previously declined work. This can be done utilizing direct mail, email, texting, or live conversations.
- Service Managers need to constantly inspect the KPI, Key Performance Indicators to make adjustments to their service sales strategies and profit opportunity trends.
- 4 Qualities for hiring in service: 1.) Honesty 2.) Integrity 3.) Desire for Success 4.) Passion for caring for Customers
Why Customers Choose to Service Their Car At the Dealership
- 26% feel dealerships trained staff is the top reason for getting work done there
- Of those surveyed, only 50% said they would return for work at the dealership after the vehicle is out of warranty
- Consumers believe that having their vehicle serviced at a dealership increases the market value of their vehicle
Why Customers Choose to Service Their Car At an Independent Service Center
- 42% said that price was the main determining factor
- Convenience or proximity was the second highest reason
- They said the overall customer experience felt more personal
- They also felt that by using the independent, they were supporting a local business
- A dealership can and is competitive in most cases for normal service yet 42% of the time the consumer feels the independent is better priced. POST PRICES ONLINE – inform when making appointments.
- As we develop our marketing campaigns for service reminders we can follow-up with personal phone calls to customers that are categorized as “inactive” in our systems.
- We can post and offer answers as to “price comparisons” in our market on our website.
- On our website we can create marketing pages and videos to combat this “higher price” perception people have in the marketplace.
- We must do a “Why Service With Us” video and post it on our website & Facebook, and make it part of a CRM Owner follow-up schedule.
- Become a “Certified”RepairPaldealer in our market. (For example, I shopped my market and an oil change was quoted at $119 on this site so we ARE NOT higher, we just have this perception we must deal with.)
- Become a“Women Drivers CERTIFIED Trusted dealer”.This is available thru womendrivers.com and Certified Trusted Dealers have a satisfaction rating of 97.1% – which is 12% higher than non-certified dealers. With being certified you get access to many of their marketing tools designed to target women shoppers more efficiently.
- If we are truly serious about increasing retention, we have to look at ways of making service at the dealership a greater convenience. Late night hours / customer vehicle pick up and deliver / easier online scheduling – all ways to become more convenient to customers to build retention and increase profits.
- 30% of customers calling the dealership never get connected to the Service Advisor on the 1st
- Technicians can send photos/videos of recommended repairs while the car is on the lift and being available to speak direct to the customer is another way of becoming more convenient and more personal. Being able to speak directly to a technician will create one of the largest “WOW” factors in the service department – they will believe the technician more than a Service Advisor whom in their opinion is a salesperson.
If we provide more convenience, become more personal and especially become more price-transparent we can win back business we have lost to the independents. We need the right combination of people, training, technology, and management oversight to increase sales and profits while also increasing retention and REAL CSI scores.
First appointment – the Sales to Service handoff. Nationally only 41% of the new owners are introduced to the service department and that number drops in half when you include scheduling the first appointment. Yet 53% stated they are far more apt to have the vehicle serviced at the dealership if this appointment has been set.
Upon completion of vehicle repairs we should be scheduling or offering to schedule the next service visit – advise what is to be done at that time and offer estimate of costs for that upcoming repair. It would then get a reminder process attached to remind the customer of this upcoming repair.
Upon completion of an appointment being set online the customer gets a confirmation email confirming the appointment; this appointment also shows in the DMS & CRM.
Upon completion of an appointment being set from an in-bound phone call the customer gets a confirmation email confirming the appointment, this appointment now shows in the DMS & CRM.
During scheduling or prior to customer visiting the dealership any open campaigns needs to be researched so that work can be scheduled and completed during the visit.
As phone appointments are being set we need to be more aware of past work completed or not completed – recommended maintenance due based on time or mileage – time requirements and cost.
With the use of tablets we meet the customer at their vehicle not at our workstation.
When the dealership is using a data-mining tool during the appointment-setting portion they should advise the customer they now qualify for the “X-change” program and help them or offer to connect them with the “X-change” coordinator to have a vehicle available for them to drive while their vehicle is being serviced.
While doing the walk around, photos or videos should be used to notate damage and these should be loaded into the customer record.
MEASURING AND METRICS FOR EXCEPTIONAL SERVICE
(Some done daily, some weekly, some bi-monthly, and some monthly)
- Technician efficiency
- Shop efficiency
- O. Count
- However, this can be skewed by number of car sales, a better way of measuring is keep a 12 month running number divided by unit sales. Watch for trending in good and bad directions
- Average R. O. $ amount – NADA $268 P. 46%
- Effective Labor Rate
- Shop absorption – NADA 70%
- NADA NC GP 28% * UC GP 26% * S&P GP 46% / what are ours
- Operating Profit
- Sales S & P vs. Veh.
- P. S & P vs. Veh.
- Policy Expenses
- CSI Score – dept. – by SA – by brand & SA
- Write – time 2 ½ minutes to 4 minutes
- Upselling amount – total and by SA
- CLS / WLS / ILS – Ave. R.O. – under 12 Mo. / 13 – 24 / 25 – 36 / 37 – 48 / 49 + Ave. O. amounts
- vs. walk-in
- Declined work
- Declined work – captured after
- Advertising & Promotions 10% service 90% sales – ours
- B & W all marketing to review – Epsilon, CRM, other / TU after purchase SM, parts new cust., Acces., TU service RO amt.,
- 29% of website visitors – service – retargeting those NO appt.
- Social Media marketing, videos, specials
- Website promotions – SEO/SEM – targeted
- Employee pictures and stories
Currently after 3 to 4 years of ownership less than 30% of the people we sell vehicles to return for service. 7 out of 10 are going somewhere else. In most cases – we pushed them out. Vehicle margins are getting slimmer and slimmer each year and “Retention IS the Holy Grail”.It is our future. If we continue to ignore it, we may stay in business, some may go out. We may be profitable; however, we may be leaving money on the table. But think of this – what if your Service and Parts operations absorbed 90% of your overall overhead? Would you sleep better at night? Service is the future but not the way we are doing it now.
- We need better people – we need to get outside the box for where we are looking, the kind of people, and the career paths being offered.
- We need to be more convenient – more sensitive to what customers want and when they want it.
- We need to train – train – train.
- We need processes, much better processes.
- We need meaningful metrics to live by.
- We need the support of the entire dealership – sales – office – we are no longer “the red headed stepchild / the necessary evil”.
- We need to focus on the lifetime of the customer, not this week’s paycheck.
Wayne Gretsky’s famous quote offers a fitting mantra for dealers and service teams as they look forward and outward to map their future: “Skate for where the puck is going, not where it’s been.”
IDEAS ARE EASY – EXECUTION IS EVERYTHING