Low cost ideas to increase service drive yield, traffic and customer loyalty

“Led by strong gains at Chrysler, Nissan and General Motors, US auto sales increased 10% in September…pushing the seasonally adjusted annual selling rate to 13.1 million.” Automotive News 10/3/11

So happy days are here again? Maybe, but at the same time, Federal Reserve Chairman Bernanke recently called on Congress to do more to help a U.S. economy that was "close to faltering." While we hope that Mr. Bernanke’s fears are unfounded, and we want our share of the 13.1 million, maybe it’s not a bad time to look at fixed operations.

The old adage ‘Service Sells Sales’ is more than an urban legend, with customers more likely to repurchase from you when they experience excellent service. A survey of customers found that among other things, two important features that customers want are:

1. A relationship after the sale.2. Value for their money.

Delivering an excellent service experience demands more than the space allotted to me here, but in a sound bite, it is the consistent application of value added processes. To paraphrase the motto of a very successful dealer that I have had the pleasure of doing business with, ‘Every Customer – Every Time.’

In that vein, here are some practices that are working in dealerships around the country.

Schedule your customers’ maintenance– as obvious as it sounds, many dealers still rely on their customers to take the initiative when scheduling their maintenance. The trouble is that many customers don’t take that step. The average dealer can expect to lose between 9 and 14% of their customers every year if they don’t proactively work to prevent defections. When they leave, those customers take their high profit maintenance and light repair (MLR) business with them, leaving OEM dealers with only a 14% parts and service market share.Research shows that customers who return at least three times for service have an excellent chance of remaining a customer. The trick is to get them back and an easy way is to start at the beginning when they, as the proud owner of a shiny new or pre-owned vehicle, are on a high. You can predict with a fair degree of accuracy when they will reach their first service interval – so take advantage and schedule their first maintenance. When they show up for that first maintenance, take the next step and schedule the next one, and so on for every service until they trade in their wheels. Proactive dealers find that the added shop traffic is worth the effort. Sales people who are in it for the long term find that this is an effective way to keep in touch with their customers, improving their odds of capturing future sales and referrals.

Confirm appointments – The best way to prevent missed appointments is to not let them happen. It always seems that the customers with the high profit gravy jobs are the ones who forget to show up, while those pesky NVH and intermittent brain busters have memories like elephants. A simple phone reminder the day before is a wonderful tonic for forgetfulness and well worth the few minutes it takes to make the call.

Call no shows – In the event that they still forget, a follow up call gives you the opportunity to recover a fumble. Maybe you can still get them in, or reschedule. If nothing else, you showed that you cared enough to call.

Preview appointments - Virtually every DMS provider allows you to preprint appointments. On the day before your customers are due to show up, take a few minutes to review your appointments. Who is

scheduled? What are they coming in for? Do they need special handling? What is the expected mileage? (Did we ask?) Is their maintenance up to date? Prepare a sales presentation. Virtually everyone who walks thru your door needs at least one additional service, be ready with a suggestion. Is there an open recall? Has the warranty expired? An awful lot can be learned from vehicle data already at your fingertips. Your customers will be surprised and appreciate the extra time taken to personalize their visit.

Staggered appointments - When customers bunch up first thing in the morning, they become stressed and your Service Sales team takes profit-draining shortcuts just to move the crowd along. The difference between chaos and control can be as simple as moving a few appointments from peak to off-peak times. You will be surprised by how many of your customers actually appreciate off-peak appointments and arrive on or near their scheduled time. Suggesting appointment times spaced at 10 or 15-minute intervals allows more time to make professional sales presentations, properly process work orders, and easily fit customers who arrive off schedule, or unscheduled.

Inspect the vehicle - Courtesy inspections are a proven way to boost repair order yields and your customer’s confidence in you as their service provider. When your customer gives you permission to inspect their vehicle, they mentally have prepared themselves for the possibility of you finding some needed repair – which increases your closing ratio. Jiffy Lube and your other competition know this to be true and rely heavily on courtesy inspections to boost their customer yield. They could not survive on just oil changes.If you are blessed with a service tunnel, vehicle walk around inspections as a feature of service write up can identify maintenance opportunities at a particularly effective moment in the transaction. Additionally, preexisting conditions like body damage and windshield cracks can be noted, prompting a repair or at least avoiding a confrontation at day’s end. If your building does not lend itself to a walk around inspection, many of the same benefits can be had by an effective ‘sales’ presentation of the courtesy inspection during write up.

Frequent buyer programs – Customers love free ‘stuff!’ Whether it’s free samples at Trader Joe’s or a two for one coupon in the local Clipper Magazine, customers want to receive value. Frequent buyer programs are especially effective in delivering on that want. ‘Punch a Lube’ and ‘Preferred Owner’ programs help break down the ‘high priced dealer’ image. The same goes for ‘lifetime’ services. Firestone for example sells lifetime alignments at a $100 premium and similar margins for tire balancing and other services. A strong value halo gives your customers a reason to bring more of their family fleet to you more frequently and you an opportunity to increase driveway penetration.

Good luck and good selling

Rob Kealey609-703-8412linkedin.com/pub/rob-kealey/10/193/338

Rob is a 28 year Fixed Ops veteran and currently works for Maritz