“I began in the early ’70s as a service advisor in a Fiat store … No experience. No training. No job description. As you can imagine, my technicians were really unhappy with my customer interviews and hand-written repair orders. I had to learn for myself … or I needed to change my career path. So I signed up for a two-day Fiat-sponsored service advisor seminar in Chicago.”— Don Reed, CEO DealerPRO Training
The seminar began with the facilitator standing before us uttering the following words: “It is the responsibility of your Fiat salespeople to sell a customer their first new Fiat and it is the responsibility of you service advisors to keep those customers coming back.”
That was 40 years ago and today we still have far too many dealers who just don’t get that concept.
Well here’s a news flash for those dealers: Nothing has changed!
OK, I’ll concede that our technology has changed but I’m talking about how the service advisor should treat the customer, how they can effectively communicate with the customer and how they must train the customer on proper preventive maintenance. As dealers and general managers you must provide your advisors with the marketing support they need to keep those customers coming back as well as attract new ones. This is even more critical to a dealer’s bottom line in today’s market than in years past due to the ever-declining warranty revenues.
Increase Your Phone Productivity
To begin with let’s make sure we have the proper service reception processes in place to maximize the customer’s experience on each and every visit. Research shows that about 80 percent of your service business comes from the telephone. What is your telephone appointment process? If your advisors are answering all incoming service calls, you are losing appointments daily, resulting in missed profit opportunities.
If you would like to increase your service traffic by 15 to 20 percent starting tomorrow then take those phone calls away from advisors and give them to appointment coordinators or start a call center and you no longer will have technicians standing around at 3:30 in the afternoon with empty bays.
If you feel that you cannot afford to hire appointment coordinators due to the size of your store then utilize existing employees who can take these incoming calls on a part-time basis during the peak call times and sell more appointments. Examples would be warranty administrators, parts counterpeople or office staff.
This enables the advisor to spend more time with their customers in the service drive doing things like making a menu presentation, explaining the 27-point vehicle health check, conducting an active delivery, reviewing the three C’s and scheduling their next appointment. These are the processes that will exceed the customer’s expectations and keep them coming back.
Is Your Website User Friendly?
Online appointment booking through your website is another way to keep those customers coming back and is growing in popularity with customers by the day. Take a look at your website and evaluate how easy it is, or isn’t, for a customer to navigate the site and schedule an appointment. Can they select the date and time to come in? Do you have a menu where they can choose the maintenance requirements and recommendations based on their mileage? Are you capturing their email addresses for follow-up and future marketing campaigns?
About Your Fixed Ops Marketing Plan . . .
Speaking of marketing campaigns, let’s take a look at what makes up an effective fixed operations marketing plan. This plan can be broken down into what activities are performed daily, monthly and quarterly.
- Call Program: You must call all no shows from the previous days, all lost sales (customer declined repairs), all appointment reminders (usually those due in three days), maintenance reminders based on time and/or mileage, factory recalls, lost souls and CSI calls. Additionally, you can call to offer extended service plans and/or prepaid maintenance plans. These calls can be made by your appointment coordinator, your call center or you can use an outside vendor.
- Email Program: Your call program and your email program will complement the other and thereby increase your frequency of contacts with your customers. Emails should be sent to everyone in your call program.
- Maintenance Mailers: In addition to calling and emailing your customers you can also use direct mail campaigns to remind them of needed services based on time and/or mileage. This tends to be more costly than email but it still works and of course it will further complement your email and call programs.
- Retention Mailers: A good example of a retention mailer would be those postcard specials many of you get in the mail each month from Bed Bath & Beyond. Maintain a consistent look using the same colors (blue and black except for Christmas it’s green and red, of course), same size postcard and they always have an offer that will benefit everyone who visits the store. Example: “SAVE 10 PERCENT ON ANY PURCHASE OF $25 OR MORE. It doesn’t matter what you buy, you will still get the savings. These types of mailers must go out once a month to keep your name in front of your customers and give them a reason to visit your dealership.
- Target Mailers: Every dealer has a database of lost souls. These are your past customers who are having their vehicle serviced somewhere else or not at all. There are varying opinions as to when do you consider a customer “lost.” I’m no expert here but my opinion is if you have not seen a customer in six months or more they are most likely going somewhere else for the maintenance/repair needs. Again, they should be in your call program as well as your email program for maximum exposure. This campaign requires a reason for them to return. Usually you must offer a special premium of some kind such as 50 percent off an oil change/free oil change/save 15 percent/etc. You must make this offer attractive to get them back. Research shows that when these customers do return the value of their repair order is much greater than your average customer pay RO.
When using an outside vendor they can very effectively measure the success or failure of these campaigns and provide you with an accurate ROI.
- OEM Campaigns: These have been around for a long time and do serve a purpose. They are often times based on seasonal offers. Some OEMs are now into marketing service and parts specials, especially TV, throughout the year. That’s a big benefit for the dealer as well. Make sure you pay close attention to the offers from your OEM regarding co-op advertising funds, marketing assistance, factory rebates, etc. I’ve had some factory friends tell me that some dealers don’t spend the money or take advantage of whatever the offer is, so make sure you keep a close watch on what is available to you.
How Can You Afford This?
By now some of you are asking yourself “how much is all of this going to cost?” or “can I really afford to do this?” Here’s how I see it:
- What’s the Value of a Customer Pay Repair Order? An average dealer selling 1.5 HPRO will produce a total gross profit, parts and labor, of about $140 per RO. A dealer averaging 500 retail customers a month who implements all of the programs outlined above will realize about a 20-percent increase in traffic, which in this example would be 100 additional customers. If we continue to sell at our current average of 1.5 HPRO (most likely much higher on lost souls) then we will generate additional gross profits of about $14,000 (very conservative). Do the math for your store.
- What’s the Investment Needed to Reach the 20 Percent Increase? In my 500 RO store it equates to about $10 per CP repair order for a total of $5,000 per month in marketing costs. So the question is: “would you give me $5,000 a month if I would return to you $14,000 a month?” Does a 357-percent return on your investment work for you? This investment of course will vary based upon the size of your operation and it will obviously reach a cap of some amount but the formula is quite accurate.
Analyze your fixed operations marketing plan to see how you compare with these strategies. Make the commitment to support your service advisors so you can keep those customers coming back.