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Why You Should Be Optimistic About Fixed Ops

Retail service traffic is increasing and net profits are improving. Great news for us all! My concern is this: What are you going to do with the additional service customers?

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Don Reed is the CEO of DealerPRO Training

Retail service traffic is increasing and net profits are improving. Great news for us all!

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My concern is this: What are you going to do with the additional service customers? Have you prepared your service team for these new opportunities? Do you have a customer-friendly appointment process online, on the phone and in person? Do you have the proper selling processes in place to professionally engage your customers? Once you get these new customers, do you have the right processes in place to keep them coming back?

Rules to Live By

Sales have been robust over the past several years. And although they have slowed, sales remain at a very healthy level. This provides a tremendous opportunity for dealers to achieve 100% service absorption, where service pays the dealership’s overhead and assures survival, even success, in a down market. It’s critical that dealers keep these newly minted service customers.

To do this, I’ve developed “Five Rules of Engagement” for service customers which outline how a dealer must hold their service team accountable for following the rules:

  • Rule #1: Offer an appointment to 100% of the incoming service calls
  • Rule #2: Conduct a vehicle walk-around with the customer
  • Rule #3: Present a maintenance menu at the time of write-up
  • Rule #4: Complete a vehicle health check with every RO
  • Rule #5: Conduct an active delivery of the vehicle back to the customer

Interestingly enough, J.D. Powers conducted a recent study of new car dealers’ service departments measuring a dealer’s performance in following rule nos. 2-5, and Worldwide Phone Pops evaluated the dealers’ performance with rule no. 1 after shopping over 9,000 dealerships nationwide. Let’s review the results of each of these.

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Opportunity Overlooked?

Starting with rule no. 1, Worldwide Phone Pops states that 57% of all service advisors do not ask the customer for an appointment. Why would a dealer allow that to happen? Why would you not hold everyone accountable to offering 100% of your service customers an appointment (my dentist does!)? To make matters worse, Phone Pops states that 38% of operators keep customers on hold too long, causing hang-ups.

So, the question is, “Are you going to let this happen to all of the new opportunities that we are all so excited about?” Would it be acceptable for your salespeople to only offer 57% of your phone-ups an appointment to come into your dealership to test drive a new or used vehicle? Do your phone-ups stay on hold for prolonged periods of time waiting for a salesperson to speak to them?

Couch Potato Cruise Control

The survey from J.D. Powers shows that rule no. 2 did not fare much better since only 53% of the service advisors conducted a walk-around. My guess is this means that the remaining 47% of advisors performed the function of a clerk preferring to stay at their work station waiting for the customer to come to them. When you install a walk-around process, you will discover that your customers like it and your CSI will most likely go up along with your sales and gross profits.

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The walk-around is a perfect lead-in to a maintenance menu presentation (rule no. 3). The survey shows that only 29% of service advisors made recommendations for other maintenance or repairs. Even more interesting is the fact that 46% of the customers said YES to having additional work performed on their vehicle at the time of write-up.

That sounds like a closing ratio of 46%! How would you like that closing ratio on extended service contracts in your finance department? What happens when the 29% becomes 100%? Most likely, your menus sales will triple!

Rev It Up

Rule no. 4 is what I call the vehicle health check or multi-point inspection. It’s really like giving your customer’s vehicle a “physical checkup” to ensure they are in fact driving a safe and reliable vehicle. The survey shows that, when an advisor calls a customer and reviews the results of the vehicle health check and makes recommendations for additional repairs or maintenance services, a whopping 56% of them say “YES.”

Now we have a 56% closing ratio, which in my book is a great job! Are your technicians inspecting 100% of the vehicles in your service department every single day? Are your service advisors reviewing the results of the inspection with every customer?

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Finish Strong

The active delivery (rule no. 5) is one of the most important processes for building owner retention and increasing CSI. This process is quite simple and costs you absolutely nothing: Always retrieve the vehicle and bring it to the customer – never send the customer to find their vehicle. J.D. Power states that 23% of advisors had their customer wait alone while their vehicle was retrieved, 5% of advisors waited with the customer while the vehicle was retrieved and 16% of advisors escorted the customer to their vehicle.

So, let’s be generous and give the advisors a combined compliance ratio of 44%. By now I’m sure you see where I’m going with this scenario – 56% of the customers were simply told where the vehicle was. When you deliver a new or used vehicle to a customer, do you tell them where it’s parked and tell them to have nice day finding it? Again, this is a very simple process that costs you absolutely nothing. Why not make it a rule starting today!

Do What It Takes

Yes, optimism abounds in fixed operations and that optimism will turn into record sales, profits and CSI scores for those dealers who choose to make the Five Rules of Engagement company policy and then hold their service team accountable for 100% compliance. You might hear a few moans and groans from your underachievers, but remember: you are not running a democracy here!

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