Judy Williams, director-parts and service for Downtown LA Motors, spends much of her time trying to find ways to streamline the department's operations to provide service advisors more time to sell to customers.

The Mercedes Benz store's service department is the 27th largest with $11.6 million in service revenue, according to the inaugural Ward's Service 150, a ranking of dealership service departments based on service revenue data from the Ward's Dealer 500, published each June.

Williams is at the front of what is a quickly changing tide in service departments today. The old rules don't apply any more — especially for dealerships that have relied on warranty work to carry their service departments.

Overall service revenue generated by franchise dealerships declined by nearly $5 billion in 2006. Much of that is due to warranty work that is quickly disappearing as quality continues to improve, according to Wayne Phillips, a Twenty Group director for the National Automobile Dealers Assn.

“The old days of hoping service doesn't lose money are gone,” he says. And that is true for brands such as Mercedes, whose vehicles sometimes require a lot of repairs — especially in the area of electronics.

“The factory has never condoned us relying on warranty work,” Williams says. “For us, the focus is on customer retention now.”

In short, successful service departments are getting creative in how they generate the customer-pay business. E-mail campaigns, customer-relationship management initiatives and online scheduling applications are some of the ways savvy service directors are capturing more business.

Downtown LA Motors is starting to use e-mail and is seeing strong responses, says Williams, but one of the more successful initiatives was a simple double coupon direct-mailed to the store's current customers, many of them who had not been in the service department for nine or 10 months.

“Our Saturday business was drying up,” Williams says. Many of the dealership's customers work in downtown Los Angeles but live up to 40 miles away — not a recipe for strong Saturday sales.

Following the mailer, the store increased its Saturday repair orders from a range of 20 to 30 to 75 to 150 repair orders. Customers received as much as $50 off for service.

But many service departments aren't even doing something as simple as that. “Not maximizing all of the opportunities is one of the biggest challenges in service departments today,” Phillips says.

Ironically, part of the problem is that service advisors are too busy answering the phone setting up appointments rather than walking the customer around the vehicle in the service lane upselling necessary repairs.

Service advisors leave a lot of money on the table when they don't fully evaluate the vehicle with the customer.

“Unfortunately, our competitors, such as the independent quick lube shops are upselling much better than we are,” Phillips says. “There's an old mantra in the finance and insurance departments that says ‘Present 100% of the menu 100% of the time to 100% of your customers. It really needs to be the same in the service department.

“The dealers doing a better job of selling to their customers, I can assure you they are probably on your Ward's Service 150 list — that's how they got there.”

Last year, Williams implemented Xtime's online service scheduling tool to free up her advisors so they could do more selling.

“It took me four or five months to sell my advisors on the concept,” Williams says. “I love it but it was hard to implement.” One of the challenges was developing a pricing guide for the service advisors.

“That may have been one of the hardest things I have ever done,” Williams says.

Customers are beginning to use it, Williams reports. “It frees us up and even helps us capture more e-mails.”

Although it sounds simple, getting e-mail addresses is proving to be a challenge. “This industry always seems to be a bit behind, doesn't it?” Williams says.

She has added a line in the repair order that almost forces the service advisor to ask the customer for the e-mail address. Williams also is looking at doing a raffle for the service advisors based on the number of e-mails captured.

“The e-mails are getting higher retention,” she says.

There are firms such as IMN, AutoRevenue and OnStation, the Cobalt Group's e-mail marketing and lifecycle management tool, that help dealers capture e-mail addresses as well as maintain their e-mail databases.

“There can be as much as 25% to 35% annual churn on a dealer's e-mail list,” says Charles Tildon, product marketing manager for OnStation.

One of OnStation's clients recently e-mailed a $4.99 oil change coupon to its customers to fill up the quick lube bays providing the advisors an opportunity to upsell. Over a two-day period, more than 100 people showed up with the coupon.

It's not just the service department that benefits from increased selling and customer retention. Most dealers understand that car sales drive service sales. If you're not selling cars, over time, your service revenue will begin to dry up.

But there is a flip side to that statement. Service sales can impact vehicle sales. The problem is, very few people in the industry consider the service department as a tool for creating vehicle sales.

Phillips recently moderated a Twenty Group in which one of the dealers was creating an incredible amount of business using a business-development center for the service department. He had originally implemented the BDC for his showroom, but it failed miserably.

The trick, says Tildon, is to approach marketing and customer service from a lifecycle management perspective.

“The goal at the end of the process is to get the customer back into the showroom and into another vehicle,” he says.

One thing is certain, the service departments that stay ahead and continually innovate are going to end with a majority of the service business, and in the end, most of the sales.

The trend is already happening. Service revenue accounts for 5.3% of total revenue for the Ward's Service 150. For the rest of the dealerships on the Ward's Dealer 500, service generated only 4.6% of their total sales in 2006.

That number has not changed much since Ward's began tracking it in 1998, although average service revenue per store has increased just over $2 million since then.

Ward's Service 150

Rank Dealership Owner/Principals City ST Service Revenue Total Revenue
1 Fletcher Jones Motorcars Fletcher Jones, Jr. Newport Beach CA $36,580,343 $588,608,822
2 Braman Motorcars Norman Braman West Palm Beach FL $24,012,981 $393,985,468
3 Longo Toyota Penske Automotive Group El Monte CA $21,592,000 $703,103,000
4 Smythe European AutoNation Inc. San Jose CA $20,706,682 $169,297,275
5 Fletcher Jones Imports Fletcher Jones, Jr. Las Vegas NV $16,193,903 $202,416,692
6 JM Lexus Patricia G. Moran Margate FL $15,489,741 $421,916,093
7 American Service Center Morton Zetlin/Alvin J. Brooks Arlington VA $15,387,711 $190,488,548
8 Penske Motorcars Penske Automotive Group West Covina CA $15,238,000 $201,562,000
9 WI Simonson Mercedes Sonic Automotive Santa Monica CA $14,365,418 $209,262,235
10 Crevier BMW Donald Crevier Santa Ana CA $14,350,640 $269,366,380
11 House of Imports (Mercedes-Benz) AutoNation Inc. Buena Park CA $14,282,159 $284,750,832
12 Autobahn Motors Sonic Automotive Belmont CA $13,693,778 $162,019,096
13 Mercedes-Benz of San Diego (& Maybach) United Auto Group San Diego CA $13,540,936 $170,939,614
14 Mercedes-Benz of Walnut Creek Sonic Automotive Walnut Creek CA $12,382,669 $125,055,042
15 Mercedes-Benz of Pompano AutoNation Inc. Pompano Beach FL $12,288,952 $155,027,738
16 Galpin Jaguar Lincoln Mercury Inc. Herbert F. Boeckmann II Van Nuys CA $12,276,255 $211,429,749
17 Mercedes-Benz of Houston Greenway AutoNation Inc. Houston TX $12,242,548 $196,552,502
18 Braman Motors Norman Braman Miami FL $12,242,071 $266,412,037
19 Mercedes-Benz of Fort Lauderdale AutoNation Inc. Ft. Lauderdale FL $12,203,513 $204,535,203
20 South Bay BMW/Mini Frederick E. Hitchcock Torrance CA $12,035,551 $224,038,794
21 Towbin Dodge Daniel Towbin Henderson NV $11,994,794 $146,407,686
22 Global Imports Sonic Automotive Atlanta GA $11,981,724 $181,150,954
23 Ray Catena Mercedes Benz Raymond Catena Edison NJ $11,817,154 $264,925,093
24 Galpin Ford Herbert F. Boeckmann II North Hills CA $11,778,706 $346,371,509
25 Chapman Scottsdale Autoplex, LLC J. Baxter Chapman Scottsdale AZ $11,683,595 $210,992,157
26 Longo Lexus Penske Automotive Group El Monte CA $11,664,000 $369,953,000
27 Downtown L.A. Motors Mercedes-Benz Jeanette Shammas/Darryl Holter Los Angeles CA $11,580,312 $218,424,527
28 Mercedez-Benz of Tysons Corner United Auto Group Vienna VA $11,482,133 $140,308,479
29 Earnhardt Ford Sales Co. Hal J. Earnhardt III Tempe AZ $11,447,977 $210,496,700
30 Stevens Creek BMW Sonic Automotive Santa Clara CA $11,402,615 $158,620,344
31 Gaudin Motor Co. H. Gary Ackerman/H. Don Ackerman Las Vegas NV $10,860,526 $230,008,835
32 Midway Chevrolet Larry Van Tuyl Phoenix AZ $10,589,353 $284,448,423
33 Norm Reeves Honda Superstore David M. Conant Cerritos CA $10,545,887 $252,700,866
34 Mark Christopher Auto Center Christopher Leggio Ontario CA $10,527,202 $222,598,460
35 Hendrick Lexus Hendrick Automotive Group Charlotte NC $10,347,653 $162,627,550
36 Beverly Hills BMW Sonic Automotive Beverly Hills CA $10,331,663 $132,757,085
37 Roseville Toyota Sullivan Auto Group Roseville CA $10,310,277 $235,018,466
38 BMW of Mountain View AutoNation Inc. Mountain View CA $10,256,940 $122,164,360
39 Tustin Lexus David W. Wilson Tustin CA $10,123,016 $181,943,022
40 Mercedes-Benz of Miami AutoNation Inc. Miami FL $10,112,262 $215,117,150
41 BMW of San Diego United Auto Group San Diego CA $10,025,496 $159,222,202
42 Momentum BMW/Mini Sonic Automotive Houston TX $9,839,053 $149,627,821
43 Power Chrysler Jeep Dodge AutoNation Inc. North Phoenix AZ $9,782,253 $181,967,218
44 Mercedes-Benz of Westmont AutoNation Inc. Westmont IL $9,647,116 $127,193,471
45 Mercedes-Benz of South Bay AutoNation Inc. Torrance CA $9,628,281 $286,972,987
46 BMW of Dallas AutoNation Inc. Dallas TX $9,564,763 $147,276,626
47 Capitol Toyota Autofocus, Inc. San Jose CA $9,551,686 $173,100,374
48 Mercedes-Benz of Chicago Fletcher Jones, Jr. Chicago IL $9,523,139 $96,418,997
49 Three-Way Automotive Group Harold Meek Bakersfield CA $9,469,527 $198,912,510
50 Lexus of Stevens Creek Patrick Kane San Jose CA $9,429,000 $177,074,000
51 Fred Haas Toyota World Fred Haas Spring TX $9,425,172 $253,655,035
52 Bill Heard Chevrolet, LTD William T. Heard Sugarland TX $9,424,000 $219,395,000
53 Pinnacle Nissan-Infiniti Martin Peters - Larry Van Tuyl Scottsdale AZ $9,335,464 $180,783,669
54 Drew Ford, VW, Hyundai & Isuzu Joe Drew/William Drew La Mesa CA $9,308,440 $138,124,166
55 Carr Chevrolet Wallace Preble/Gene Bradshaw Beaverton OR $9,252,049 $199,383,753
56 Lute Riley Honda Sonic Automotive Richardson TX $9,205,922 $158,263,731
57 Camelback Toyota John O'Malley & Larry Van Tuyl Phoenix AZ $9,141,449 $208,406,788
58 Lexus Kearny Mesa United Auto Group San Diego CA $9,069,320 $141,215,774
59 BMW North Scottsdale United Auto Group Phoenix AZ $8,939,734 $153,334,590
60 Sanderson Ford, Inc. David Kimmerle Glendale AZ $8,865,271 $241,603,394
61 Momentum Jag Porsche Volvo Sonic Automotive Houston TX $8,852,698 $111,153,876
62 Sam Galloway Ford, Inc. Sam Galloway, Jr. Ft. Myers FL $8,799,783 $218,393,142
63 Mercedes-Benz of Orlando AutoNation Inc. Maitland FL $8,799,361 $137,957,238
64 Courtesy Chevrolet William R. Gruwell Phoenix AZ $8,771,780 $297,029,779
65 Braman Honda Norman Braman Miami FL $8,705,369 $190,756,478
66 Hendrick Imports Hendrick Automotive Group Charlotte NC $8,702,968 $137,191,131
67 Herb Chambers Motorcars of Boston Herb Chambers Somerville MA $8,605,976 $104,782,323
68 Dave Smith Motors Ken Smith Kellogg ID $8,545,142 $438,366,312
69 Lund Cadillac Hummer Saab John R. Lund Phoenix AZ $8,501,105 $115,951,144
70 Rick Case Honda Rick Case Davie FL $8,453,000 $218,435,000
71 Gwinnett Place Honda Hendrick Automotive Group Duluth GA $8,417,515 $180,170,923
72 Stevens Creek Honda Sonic Automotive San Jose CA $8,416,857 $123,920,521
73 Greenway Ford Frank Rodriguez; Carl Atkinson Orlando FL $8,387,159 $145,233,238
74 Kearny Mesa Toyota-Scion United Auto Group San Diego CA $8,327,373 $113,001,268
75 Herb Chambers Honda of Boston Herb Chambers Boston MA $8,286,921 $123,262,287
76 Desert Toyota AutoNation Inc. Las Vegas NV $8,238,732 $164,898,694
77 Brown & Brown Chevrolet AutoNation Inc. Mesa AZ $8,236,044 $255,579,846
78 Mercedes-Benz of Houston North AutoNation Inc. Houston TX $8,191,554 $122,962,089
79 Power Toyota Tempe AutoNation Inc. Tempe AZ $8,191,253 $204,845,902
80 GO Toyota AutoNation Inc. Centennial CO $8,165,010 $236,240,037
81 Roseville BMW AutoNation Inc. Roseville CA $8,116,684 $120,226,842
82 Atlantic Automall John Staluppi West Islip NY $8,086,952 $238,786,832
83 Lexus of Palm Beach AutoNation Inc. West Palm Beach FL $8,071,302 $176,233,163
84 BMW of Austin United Auto Group Austin TX $8,058,028 $114,612,068
85 Al Serra Auto Plaza Joseph O. Serra Grand Blanc MI $8,015,647 $244,970,841
86 Michael Cadillac, Inc. Michael L. Rosvold Fresno CA $7,995,972 $225,631,620
87 East Bay BMW Hendrick Automotive Group Pleasanton CA $7,985,581 $103,985,666
88 Showcase Honda Tom Buis - Larry Van Tuyl Phoenix AZ $7,936,261 $154,396,683
89 Libertyville Toyota AutoNation Inc. Libertyville IL $7,839,728 $147,654,639
90 Bill Heard Chevrolet Corp.-Las Vegas William T. Heard Las Vegas NV $7,806,000 $130,253,000
91 Champion Toyota Austin AutoNation Inc. Austin TX $7,788,664 $169,020,822
92 Maroone Ford of Margate AutoNation Inc. Margate FL $7,766,802 $178,750,656
93 Lexus of Rockville Sonic Automotive Rockville MD $7,713,893 $113,134,032
94 Millennium Superstore John Staluppi Hempstead NY $7,707,285 $219,975,066
95 Desert BMW of Las Vegas AutoNation Inc. Las Vegas NV $7,648,134 $106,479,555
96 Newport Auto Center AutoNation Inc. Newport Beach CA $7,521,531 $150,194,621
97 Folsom Lake Ford Chuck Peterson Folsom CA $7,506,772 $94,321,276
98 Fletcher Jones Motorcars of Fremont Fletcher Jones, Jr. Fremont CA $7,476,795 $91,224,255
99 John Sullivan Chevrolet John L. Sullivan Roseville CA $7,429,121 $176,058,113
100 Lexus of Tampa Bay AutoNation Inc. Tampa FL $7,381,444 $148,924,034
101 Maroone Chevrolet of Pembroke Pines AutoNation Inc. Pembroke Pines FL $7,353,998 $167,730,858
102 Toyota of Orange David W. Wilson Orange CA $7,350,396 $219,951,607
103 Mercedes-Benz of Pembroke Pines AutoNation Inc. Pembroke Pines FL $7,311,986 $122,159,885
104 Herb Chambers BMW/Mini Herb Chambers Boston MA $7,260,972 $143,735,734
105 Performance Chevrolet Hendrick Automotive Group Chapel Hill NC $7,258,370 $100,479,896
106 AutoWest Chrysler Jeep Dodge Roseville AutoNation Inc. Roseville CA $7,234,641 $128,011,109
107 Koons Tysons Toyota James Koons Vienna VA $7,223,895 $216,818,086
108 BMW of Fairfax Sonic Automotive Fairfax VA $7,182,979 $119,665,091
109 Hudson Toyota - Scion United Auto Group Jersey City NJ $7,155,574 $184,890,676
110 Power Nissan Tempe AutoNation Inc. Tempe AZ $7,053,264 $139,944,712
111 Herb Chambers Lexus of Norwood Herb Chambers East Walpole MA $7,051,425 $165,423,430
112 Chapman Chevrolet Isuzu, LLC John H. Chapman Tempe AZ $7,022,848 $197,888,764
113 Ancira Winton Chevrolet Inc. Ernesto Ancira Jr. San Antonio TX $6,997,647 $136,247,359
114 South Bay Toyota David W. Wilson Gardena CA $6,993,018 $147,755,588
115 Fairfax Honda Robert Rosenthal Fairfax VA $6,989,491 $118,350,861
116 Power Toyota Irvine AutoNation Inc. Irvine CA $6,977,792 $171,208,267
117 Mercedes-Benz of Sarasota AutoNation Inc. Sarasota FL $6,934,809 $119,186,684
118 Gillman Honda South Ramsay H. Gillman Houston TX $6,926,193 $130,247,348
119 Fred Anderson Toyota of Raleigh Fred Anderson Raleigh NC $6,922,334 $159,075,733
120 Lexus of Bridgewater United Auto Group Bound Brook NJ $6,913,075 $114,821,287
121 Ford of North Scottsdale AutoNation Inc. Scottsdale AZ $6,904,406 $125,162,893
122 Wilde Lexus of Sarasota Mark Wilde Sarasota FL $6,902,984 $137,925,064
123 Lauderdale Imports Ltd./BMW J. S. Holman/Dan Villani Ft. Lauderdale FL $6,874,452 $142,821,870
124 Courtesy Toyota AutoNation Inc. Winter Park FL $6,799,190 $158,211,513
125 Rosenthal Jaguar Land Rover Robert Rosenthal Vienna VA $6,787,066 $94,360,747
126 Burt Toyota, Inc. Lloyd G. Chavez/Lloyd G. Chavez, Jr. Englewood CO $6,751,876 $135,170,693
127 Bell Honda Larry Van Tuyl Phoenix AZ $6,751,621 $112,859,968
128 Honda of Tysons Corner Sonic Automotive Vienna VA $6,728,951 $89,554,473
129 Criswell Chevrolet Harry E. Criswell III Gaithersburg MD $6,723,127 $177,935,421
130 Power Toyota Cerritos AutoNation Inc. Cerritos CA $6,713,212 $214,457,814
131 Right Toyota David W. Wilson Scottsdale AZ $6,650,415 $170,273,588
132 Appleway Chevrolet AutoNation Inc. Spokane WA $6,624,948 $158,113,329
133 Schaumburg Honda Automobiles Robert V. Rohrman Schaumburg IL $6,586,974 $139,320,695
134 Landmark Honda Robert Rosenthal Alexandria VA $6,559,244 $106,758,711
135 Prestige Imports Henry C. Hansel; Stephen E. Hansel Santa Rosa CA $6,552,361 $71,652,209
136 Maroone Chevrolet of Greenacres AutoNation Inc. Greenacres FL $6,546,683 $148,645,761
137 David Maus Toyota David Maus & Cecil Van Tuyl Longwood FL $6,539,074 $204,473,251
138 Capitol Honda United Auto Group San Jose CA $6,501,142 $122,574,071
139 Wilde Toyota Mark Wilde; Pat Donahue West Allis WI $6,500,468 $152,871,080
140 Van Chevrolet Chuck Mullins & Larry Van Tuyl Scottsdale AZ $6,492,548 $161,958,893
141 Jones West Ford Richard West, Jr. Reno NV $6,487,936 $88,317,503
142 Ray Catena Lexus of Monmouth Raymond Catena Oakhurst NJ $6,477,452 $206,026,300
143 Atlantic Toyota John Staluppi Amityville NY $6,476,002 $145,208,521
144 BMW of Pembroke Pines Joseph S. Holman Pembroke Pines FL $6,469,875 $138,277,999
145 Herb Chambers Flagship Motorcars Herb Chambers Lynnfield MA $6,468,370 $85,635,832
146 Lexus of Serramonte Sonic Automotive Colma CA $6,449,007 $107,299,200
147 Power Chevrolet Superstition Springs AutoNation Inc. Mesa AZ $6,441,479 $107,849,089
148 North County Ford Jim Crowley Vista CA $6,438,771 $78,324,812
149 Westway Ford Cecil Van Tuyl & George Davey Irving TX $6,422,152 $115,075,475
150 Five Star Ford of Texas Sam Pack N. Richland Hills TX $6,421,016 $205,374,929
* Based on 2007 Ward's Dealer 500 service revenue data. No advertising or other promotional use of the Ward's Service 150 may be used without the prior written permission of the Ward's Automotive Group.