Dealerships are facing big changes in the way their businesses work. New and used car margins are slipping while interest rates, advertising costs and other expenses are skyrocketing. Finding and retaining good employees — especially technicians — is getting harder and harder.
“We are in the midst of seeing more change in the next five years than we’ve seen in the last 50 years,”Mary Barra, General Motors CEO, said recently.
What is a business supposed to do in these circumstances?
Feed the part of your dealership that matters most to your customers. The one that continuously brings your customers back for more. It’s the service department!
That’s the part of your business that maintains $47 in profit for every $100 of sales it makes. Add to that a whopping 74% of customers who are likely to return to buy their next car with your dealership, after routinely relying on you for your excellent service. So it’s vital to get your customers set up in a good relationship with your service department from the very beginning.
However, because most dealers and general managers have started their careers in showrooms, the service lanes can seem awkward and uncomfortable for them.
What if your salespeople understood how much impact a good service tour has on retaining the customer? What if they took each and every prospect interested in purchasing on such a tour, 100% of the time? Would that sell more units?
The best approach is to begin by teaching salespeople to do a customer-forward, friendly and thorough “Rock Star” service tour plus a “Rock Star” sales-to-service handoff. This has proven to build each customer’s relationship with the dealership through the service side. What if your salespeople used this technique 100% of the time? Would it sell more units?
A Successful Dealership Continues to Invest in Training
I visited a dealership recently hat was already turning in the best numbers they’d ever had. In fact, the first and second quarters were the best months in the dealership’s 48-year history, and 2018 was the best year in their 48-year history. The industry average for owner retention rate comes in between 33-40%, and theirs was 82.5%. Similarly, their 2018 absorption rate was 86.4%. So, why would they want to change anything?
They decided to address these two opportunities even though they were very successful in their current efforts.
“I’ve done extensive training programs in the past but I knew a successful service tour and an improved sales-to-service launch would further help our dealership. And that is exactly what it did,” the dealership’s general manager said about why such a successful dealership was eager to improve even more while they were already performing at such a successful pace.
A Well-Trained Team Leads to Larger Profits
Helping a dealership work toward their goals starts with understanding the entire sales and service relationship. A customer’s experience with your business begins during the sales process, but continues throughout the ownership journey.
A few important benchmarks to consider: only 41% of new car customers are introduced to the service department at the time of their purchase. The service handoff for used car sales is virtually 0%. That’s poor thinking, considering used cars are likely to need service or repair sooner and more often.
Of the customers who took a service tour, 53% said that it was a strong influencer when it came time to deciding where they would repair their vehicle. So what would happen if 100% of your customers, both new and used buyers, were given a great service tour and a great sales-to-service handoff?
Putting Ideas into Action
Educating salespeople in these areas, explaining how it can positively impact their personal income opportunities and showing them precisely how much it can impact their paycheck is what gets them to buy in to the idea of using this “Rock Star” service tour and handoff.
It’s also important to include service managers and directors in training on both of these areas. Many times, dealerships feel it’s not necessary to have the service managers in the sales-to-service training sessions, but there are benefits to doing so. This allows them to see how much better it can be for both sales and for their service advisors, as well as seeing how much it could improve their own personal income. Also, they can offer information about the terminology and concepts used during training, which immensely improves their effectiveness.
Further making these steps work requires teaching them exact words and phrases to do a proper, effective service tour and sales-to-service handoff, followed by hours of one-on-one time with individuals to practice, drill and rehearse until a great tour and handoff becomes second nature to them.
Dealerships that have improved their sales-to-service handoffs and service tours share that it not only impacts their bottom line, but their sales and service staff also become more engaged in the entire ownership experience. Dealers are recognizing the vast importance of building a great customer relationship with the dealership, and this is a proven way to accomplish that as well as keeping your customers coming back.