Four Changes Can Improve Service Center Profits


The good news is that your sales figures are on the rise. The bad news is that only about a third of these customers are likely to have their cars serviced in your store. This means that you are leaving a lot of money on the table and potentially losing your bond with lifelong customers.

Since fixed operations typically account for 49% of a dealership’s profit, a few extra upgrades and conversations in your service bays can easily boost your bottom line.

Integrate Drive service with sales

Customers should view your dealership as one business and not as a combination of stand-alone entities. When concluding a transaction, it is advisable to ask your salesperson to introduce each new customer to a service advisor. If your after-sales service integrates with your CRM, service agents will be fully aware of each customer’s vehicle and why it is in the service area. In other words, make sure that interactions between all departments become transparent to the customer.

Train your department managers in sales techniques, such as relationship selling. They should be expected to cross-sell services during any visit to the customer (e.g. maintenance, repair, recall, warranty). Many long-term value-driven dealerships offer lifetime powertrain warranty programs as well as other loyalty programs to build customer loyalty.

Remember, communication skills are just as important as technical skills in creating a positive customer experience.

Treat the service business like a local business

Half of vehicle buyers will travel more than 18 km (11 miles) to complete their purchase, but less than a third are willing to travel the same distance for service. In other words, consumers are willing to travel further to purchase a vehicle than to have the same vehicle serviced, according to the 2018 Cox Automotive Service Industry Study.

The issue of proximity to a concessionaire is one of the reasons given to justify the reduced retention rates. Not a “convenient location” was the fifth most common reason for not having a vehicle serviced by the purchasing dealer in 2015; in 2018, that was the second reason.

But the service is not about a one-off oil change. It’s about creating a lifelong relationship with every customer, as evidenced by extended warranties and service agreements. From loaner vehicles and shuttles to mobile mechanics, stationary operations can easily overcome the challenges of distance.

Dedicate a disc to the most urgent services

No one likes to wait. Consumers find the wait time more frustrating than dealer pricing or the inability to get a car loan. Studies also show that there is a limit to how long a customer waits: 2.5 hours or less. Any longer and you risk losing those customers for their next service appointment with another supplier.

Dealer capacity of course has an impact on customer wait times, and most dealerships today are operating near maximum capacity. Consider a triage approach, in which a separate service reader handles the most urgent work orders. Also consider outsourcing basic retail and repackaging needs to free up your service bays for payable work orders.

Offer online scheduling to meet customer expectations for speed, convenience and simplicity, and constantly promote this benefit to them.

Be mobile

The industry is currently facing a shortage of microchips, which is slowing the production of new vehicles. This shortage reminds me of how technologically complicated new vehicles today are. In my opinion, this gives a dealership’s service center a distinct advantage over independent stores. Your OEM-trained service technicians are better prepared for any issues under the hood, even as technology evolves.

Likewise, you must adhere to today’s moving expectations. Offer remote scheduling and recording via a service advisor’s tablet. Communicate with customers in real time via SMS or email alerts.

Your after-sales service should be ready to go the extra mile; Create a mobile service team to meet your customers’ parts and service needs at their home or office. You can’t ask for a better branding opportunity when your service team is in the neighborhoods around your dealership serving customers.

Make people your priority

Dealerships are made up of people who sell to other people, and the goal of a dealership’s fixed operations team is to protect every customer’s investment. When the dealers do things right, they are in the business of making people happy.

I’d like to end with this advice from award-winning speaker and business trainer Patricia Fripp: “It’s not your client’s job to remember you. It is your obligation and your responsibility to make sure that they don’t have the chance to forget you.

Your mission ? Make your service experience unforgettable.

Troy scheer (photo above, left) is the Marketing Director of Binary Automotive Solutions, a provider of personalized lifetime warranty programs designed to help dealers sell more vehicles.

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