Four Changes Can Improve Service Center Profits

Good news: Your sales numbers are up. Bad news: Only about one-third of those customers are likely to get their car serviced in your shop. This means you’re leaving a lot of money on the table, as well as potentially losing your link to lifetime customers.

Since Fixed Ops typically represents 49% of a dealership’s profit, a few more refinements and conversations in your service bays can easily boost your bottom line.

Integrate the Service Drive With Sales

Customers should view your dealership as one business and not a mix of stand-alone entities. When closing a deal, it’s a good idea to have your salesperson introduce each new customer to a service advisor. If your service department integrates with your CRM, service agents will be fully aware of each customer’s vehicle and why it is in the service bay. Put another way, make sure interactions across all departments become seamless to the customer.

Train your service managers in sales techniques, such as relational selling. They should be expected to cross-sell services during any customer visit (e.g., maintenance, repair, recall, warranty). Many dealerships focused on long-term value are offering lifetime powertrain warranty programs alongside other loyalty programs to keep customers coming back to the service drive.

Remember, communication skills are just as important as technical skills in creating a positive customer experience.

Treat Service Business as a Local Business

Half of vehicle shoppers will drive more than 11 miles (18 km) to make their purchase, but less than one-third are willing to drive that same distance for service. In other words, consumers are willing to travel farther to buy a vehicle than they are to get the same vehicle serviced, according to the 2018 Service Industry Study by Cox Automotive.

The question of proximity to a dealership is one reason given for reduced rates of retention. Not a “convenient location” was the fifth most-common reason given for not getting a vehicle serviced by the dealership of purchase in 2015; by 2018, it was the second reason.

But service is not about a one-time oil change. It’s about creating a lifetime relationship with each customer, as best exemplified by extended warranties and service agreements. From loaner vehicles to shuttles to mobile mechanics, Fixed Ops can easily overcome the challenges of distance.

Dedicate a Drive to the Most Time-Sensitive Services

Nobody likes waiting. Consumers find service wait time more frustrating than dealer pricing or the inability to get a loaner car. Studies also show there’s a limit to how long a customer will patiently wait: 2.5 hours or less. Any longer and you risk losing those customers for their next servicing appointment to another provider.

Dealer capacity impacts customer wait times, of course, and most dealers these days run close to maximum capacity. Consider a triage approach, in which a separate service drive handles the more time-sensitive work orders. Also consider outsourcing basic detailing and reconditioning needs to free-up your service bays for payable work orders.

Offer online scheduling to address customers’ expectations for speed, convenience and simplicity, and consistently promote this benefit to them.

Be Mobile

The industry is currently facing a shortage of microchips, which is slowing production of new vehicles. This shortage reminds me how technologically complicated today’s new vehicles are. In my opinion, this gives a dealership’s service center a distinct advantage over independent shops. Your OEM-trained service technicians are better prepared for whatever issue lies under the hood, even as technology changes.

Likewise, you need to buy-in to today’s mobile expectations. Offer remote scheduling and check-in via a service advisor’s tablet. Communicate with customers in real-time through text or email alerts.

Your service department should be prepared to literally go the extra mile; create a mobile service team to address your customers’ parts and service needs at their home or office. You can’t ask for a better brand-building opportunity when your service team is out in neighborhoods around your dealership servicing customers.

Troy Scheer_headshot (003)

Dealerships consist of people selling to other people, and the purpose of a dealership’s Fixed Ops team is to protect each customer’s investment. When dealerships get it right, they’re in the people-pleasing business.

I’d like to close with this piece of advice from award-winning speaker and sales trainer Patricia Fripp: “It’s not your customer’s job to remember you. It is your obligation and responsibility to make sure they don’t have the chance to forget you.”

Your mission? Make your service experience unforgettable.

Troy Scheer (pictured above, left) is the chief marketing officer of Binary Automotive Solutions, a provider of customized lifetime warranty programs designed to help dealerships sell more vehicles.