When customers choose, they choose more; when F&I departments institute menu sales, they find sales increase about 30 percent. Menus create an environment where the customer is allowed to buy, instead of being sold. In the service drive, when you combine a menu with interval service requirements, you have a gold mine.
Menus Can Make a Difference
Finance and insurance departments have proven to be a significant profit center for dealers who install the right processes that help their finance producers to sell additional products and services to each and every customer who takes delivery of a new or used vehicle. One of those processes is a menu.
Menus are designed to offer the customer choices for protecting their vehicle, their credit, their payment, etc. Most menus will give the customer the opportunity to choose from three or four different options such as the platinum, gold, silver or bronze coverage or good, better and best, to name a few.
We know that if the customer chooses any one of these options it results in an automatic upsell, which of course means more gross profit in the car deal. Additionally, the finance producer is usually required to present these menus to 100 percent of your customers — no exceptions. This process promotes consistency and ensures that every customer is treated the same, meaning that each and every customer receives a feature/benefit presentation on all of the products contained in the menu.
Starting today, why don’t you install this same process in your service department?
How to Develop & Install a Maintenance Menu
Menus are an effective tool in your finance department and they can be just as effective in your service department. Here are five steps to properly install your maintenance menus:
- Design and produce your own menu.
- Train your service advisors how to make a feature/benefit presentation.
- Require this process to be followed with every customer on every visit.
- Measure menu sales for each service advisor.
- Hold your managers and advisors accountable for their performance.
Designing a maintenance menu can be very time consuming, but if you do it right, I can assure you the time will be well spent. You can choose to design a paper menu, or you might prefer electronic.
Technology is a wonderful thing when it’s used properly. I prefer the electronic menus, which require nothing more than internet service. The value of online electronic menus is less cost, better pricing flexibility, easy to use, 100-percent accountability tracking for advisors, customer friendly and they are available 24/7 for your customers. Research shows that online menus, partnered with an online appointment process, will generate up to 30 percent more in sales per repair order than those written by your advisors.
Do the math in your store and you’ll probably see the opportunity to add at least $50 per repair order. The fact is, online customers will go to your online menu and “sell themselves” because 100 percent of the customers are presented the menu when they log in. It is not an option.
Start with the Basics
All maintenance menus should start with the manufacturer’s requirements and recommendations based on months in service and/or mileage. From there you must add services based on local driving conditions as well as the customer’s own driving habits. For example, the driving conditions in Mesa, AZ, are not the same as Bangor, ME, and a 4X4 three-quarter-ton truck owner towing boats in Port Arthur, TX, does not have the same driving habits as one in Casper, WY, who’s hauling a horse trailer in the mountains.
Training your advisors on how to make a feature/benefit presentation starts with taking a plain sheet of paper and drawing a line down the middle of the page. On the left, you should list all of the features outlined in your menu. On the right, list the corresponding benefits of each feature, which are the reasons a customer will say yes to a menu presentation.
Say “Yes” to the Benefits
Remember, your advisors must understand that customers only buy benefits — they don’t buy features. An example would be a tire rotation. Nobody wants to buy a tire rotation (feature) but they do want to have longer lasting tires, which saves them money (benefit), and that’s why they say “yes” to buying a tire rotation. Electronic menus also have full-color video feature/benefit presentations that enable the customer to actually see the benefits as well as hear them.
Now you must require every advisor to follow this process every day when they greet each customer (both warranty and customer pay). This is not an option for your finance producers, and it should not be an option for your service advisors. In other words, you don’t just offer a menu to those customers that you think might buy, you give every customer the opportunity to buy.
You will never get 50 percent service contract penetration in F&I by offering them to only those customers who might buy, right? Everyone gets the opportunity to say “yes” to an upsell. It’s no different in service. Your advisors can’t achieve a 50-percent closing ratio on menu sales by only presenting to those who might buy. Every customer, every day gets the opportunity to say “yes.”
Measuring for Success
You can’t manage what you don’t measure so it’s imperative that you keep a record of each advisor’s sales performance. I’m talking about sales per RO, hours per RO, profit margins on parts and labor, effective labor rate, closing ratio on menu sales and closing ratio on inspection upsells. You’re most likely measuring every measurable statistic in your sales/F&I department every day so start doing the same for your service and parts departments. Then you will have complete accountability for their individual performance.
This, of course, leads to one of my favorite subjects called “compensation,” which we’ll address down the road.
These five steps for developing a menu will boost your bottom line starting with day one. Your customers will become trained on how to pay attention to preventive maintenance, which will give them a much more pleasurable ownership experience and save them money over time. If you doubt me, just go visit any aftermarket service facility and observe their processes since they now own more than 80 percent of the parts and service business in America.