Recently I’ve had the opportunity to hold a series of workshops across the U.S. for a vendor who manufactures and sells various pieces of shop equipment including their state-of-the-art alignment machines to auto dealers. During the course of these workshops it was explained to me that there are some dealership service departments who fail to properly realize the true profit opportunities with their alignment equipment. Since my audience was made up primarily of dealers, GMs and service directors, I asked for their input as to why they were not selling more alignments.
Here are some of the answers (aka excuses) they gave me:
1. Our customers just won’t buy an alignment.
2. We service a lot of low-mileage cars.
3. We sell a lot of lease vehicles.
4. I can’t get my service advisor to sell it.
5. My service advisors don’t have time to sell it.
6. Our customers are mostly retired and can’t afford it.
7. Our technicians don’t like to do alignments.
Are you laughing yet? I’m not making this stuff up! All of the above is just plain nonsense! Let me respond to each one of the above:
1. Your customers will not buy an alignment if your advisors don’t explain the benefits and offer one.
2. Since when does mileage have anything to do with the alignment specs of a vehicle?
3. Lease customers are responsible for the maintenance of the vehicle including abnormal wear on their tires.
4. If you can’t get an advisor to sell alignments then get them properly trained on how to do so with feature/benefit selling and then hold them accountable for asking every customer “When was the last time you had an alignment?”
5. If you have the proper number of advisors working with 12-15 customers per day then they will most definitely have sufficient time to make the presentation when properly trained.
6. Those customers who live off their retirement income can easily afford an $89 alignment versus a new set of tires for $500 to $800!
7. The attendees stated an average flat rate time for an alignment is 1.2 hours and the alignment manufacturer states it can be done in 40 minutes or less — sounds like about 200-percent efficient to me!
OK, I’m done venting over the excuses I hear from underachievers. Some of the positive benefits to the dealer from selling alignments include: increasing technician productivity, customer pay labor sales, customer pay gross profit, hours per repair order, service absorption, CSI; all while improving employee morale.
I am amazed at how many service advisors fail to properly advise all of their customers as to the maintenance and/or repair needs of their vehicles.
As I’m sure most of you already know, the aftermarket dominates this $114 billion market and many new car dealers are allowing much of these opportunities to simply pass through their service departments daily. For those of you who do not present “maintenance menus” to all of your customers and who do not perform a multi-point inspection on 100 percent of your customers’ vehicles, I ask you these two questions: 1) What is it about making more money you don’t like? 2) Why would you not want to improve your CSI? I’m guessing every dealer/GM reading this article would have an interest in increasing their F&I Gross Per Retail Unit as well as their Front End Gross Per Retail Unit, so where is the interest in increasing your Sales Per Repair Order?
The Car Care Council’s research on multi-point inspection results found that 80 percent of all the vehicles they inspected failed at least one item on their inspection!
Would an additional .3 HPRO spark some interest? Consider this:
Alignment Quick Check
• Number of repair orders per month 1000
• Quick check failure rate 60%
• Number of alignment opportunities 600
• Customer acceptance rate 40%
• Number of alignment sold 240
• Flag hours per RO 1.2
• Total hours sold 288
• Additional hours sold per RO .3
If 60 percent of the vehicles have an out of alignment condition and you close 40 percent of those, you not only produce an additional .3 HPRO, you also have the opportunity to inspect the vehicle for your share of that $144 billion market outlined above. Let’s take this opportunity one step further and calculate the profit potential for alignments:
Profit Potential Analysis
• Number of additional hours sold – 288
• Average hourly labor rate – $87
• Additional labor sales sold per month – $25,056
• Labor gross profit margin – 75%
• Additional labor gross profit per month – $18,792
• Annualized gross profit improvement – $225,504
(Equates to selling 90 new cars @ $2,500 PRU)
• Return on investment = 451%
(Based on a $50,000 investment in equipment)
If I’m wrong by 50 percent (only close 20 percent) it’s still an additional $112k per year in Net Profit improvement, so what’s holding you back?
Now that we have identified the tremendous opportunities for increasing sales in our $114 billion market, let’s address the biggest obstacle that you have to overcome in order to realize your true profit potential: the Service Advisor! Time for a few more questions:
When was the last time you trained your advisors:
• how to advise?
• how to sell more appointments?
• how to give a feature/benefit presentation for a repair or service?
• how to train your customers on proper vehicle maintenance?
• how to overcome objections?
• how to conduct an active delivery of the vehicle with the customer?
• how to build CSI and owner retention?
• When was the last time you increased your customer pay sales by 40 percent over last year?
Many of you have service advisors servicing your customers each and every day who have had ZERO training on all of the above. Here are some facts to consider:
1. Service advisors speak with more customers on the phone than any other employee at your dealership except for the phone operator or BDC.
2. Service advisors are face to face with more customers per day than any other employee at your dealership, averaging about 12-15 per day.
3. Service advisors averaging around 1.5 HPRO produce about $500k a year in gross profit, which equates to a salesperson selling 25 cars a month!
4. Service advisors have the most direct impact on earning your dealership those factory incentives that are tied to CSI scores.
5. Service advisors — not Service Specials — will keep your customers coming back.
I can go on and on but I’m guessing you’re starting to get my point. I just listed five good reasons why every service advisor deserves and needs to be professionally trained on how to provide your customers with the highest level of service each and every time they visit or call your dealership. So, why don’t you make the commitment to get this done sooner rather than later and make this your best year ever in service sales?