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In Praise of Retention: Position Your Dealership to be “First”

In the quest to generate more customer pay parts and service dollars, it pays to position yourself to be “first.” Your service sales and retention only go up when you position yourself to be the first to recommend needed vehicle repair and maintenance items to your customers.

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In the quest to generate more customer pay parts and service dollars, it pays to position yourself to be “first.” Your service sales and retention only go up when you position yourself to be the first to recommend needed vehicle repair and maintenance items to your customers. If you don’t get aggressive about service retention, be sure a competitor will. Whether it be a competing dealer, one of the national vehicle service chains or the independent repair shop on the corner, if you are not giving your customer a reason and benefit to use your service drive, they will likely use someone else’s.

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The reality is that people are getting their vehicles serviced somewhere; unfortunately, it is typically not at the franchised dealer where they purchased the car. This means that some other shop gets to be “first” — first to point out to our customers their needed maintenance or repairs. When they are presented, the response from the customer is usually something along the lines of, “OK, I guess since I’m already here and the car is on the lift, go ahead and do it.”

Game over. The other shop wins. You lose. Parts and service dollars are spent that you did not capture because your customer visited someone else’s service drive.

I’ve always been passionate about the importance of selling service to those who we sell cars. I was taught early on in my career that the service department is not the “back” of the business but rather the “backbone” of the business. It is also the best place to develop relationships and lay the groundwork for repeat and referral vehicle sales. This has not changed; it has, in fact, become more important each year as the number of national aftermarket shop locations increase and the amount of factory warranty work continues to dwindle. Recapturing a significant portion of this lost service business that we let slip away over the last 25 years is now a key piece of the puzzle as we compete in today’s competitive marketplace.

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As dealers, we’ve all said it for years. But if we truly believe this, then why does dealership service retention continue to average something like 25 to 30 percent when it is not a warranty visit? Retention rates like this keep us from filling our service drive so we can build relationships, overcome the perception that we are too expensive and sell more parts and service. Giving our customers a reason to show up is key.

How many marketing dollars are we spending to find new customers when retaining existing customers has been proven time and time again to be much less costly — regardless of the industry? Wouldn’t an investment of our marketing dollars in customer benefits make more sense? We should provide them with a reason to come see us and be prepared to capitalize when they do. While they visit us to take care of their service needs, our service advisors can build relationships and work to dispel the misguided perceptions they hold in regard to not taking their vehicle to the dealership for anything but warranty work. And just maybe, salespeople might like to see their customers in the store on a more regular basis to continue build their relationship with them in person — and walk away with a referral or two.

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At our dealership we put it all together this way: Our service advisors have been trained to look for every opportunity to provide value to our customers by conducting thorough walk-arounds on every vehicle entering our service lanes. When the vehicle is brought into the shop, the technicians then conduct a thorough MPI checklist review. This information is shared and reviewed with the customer by the advisor. Our goal, as mentioned earlier, is to be the “first” to find and recommend needed maintenance and repair services to these owners in an all-out effort to never again lose this business to the independent and aftermarket service providers.

We position ourselves to be “first” by the investment we make in our service retention program provided to all who purchase a new or used vehicle from us. In our case, it is providing complimentary oil changes and tire rotations for as long as they own their vehicle. It is the “price of admission” we pay to have eight out of 10 people we sell standing in our drive for maintenance and repair services vs. the three out of 10 that might show up if we provide no incentive to come back and see us.

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You may choose some other benefit(s) to provide your customers. There are certainly many options that can accomplish this for you. The point is to set yourself apart by providing something of value your customers will receive during all or most of their ownership cycle as a benefit of doing business with you. Think of it as choosing to invest your marketing dollars in your own customers instead of in all the other marketing options out there today that may or may not send a customer into your showroom or service department. Tie your customers to your store. More will show up in your service drive, pay you for services they have been getting done elsewhere, and you are almost guaranteed that they will give you the first shot at selling them their next vehicle. Not a bad return on your investment when your team understands the big picture. We all know the additional maintenance and repair work is there to be sold if everyone does their job.

It’s just really difficult to sell service to people who never show up to see you. A good retention program will keep that from happening and keep you in the position to be “first!

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