Improve Service Business

There has never been a time, except perhaps when all auto manufacturing ceased during World War II, when the service manager had to be thinking about making things happen.

Units in operation are down, warranty work and reimbursements both are off dramatically and service/maintenance intervals are stretched.

But if a dealership markets services correctly, replacement business will come from owners of other makes and models and owners of higher-mileage vehicles.

A drive down any town's main drag after 5 p.m. will prove illustrative to dealership service managers, says Robert Atwood, a former service manager and now fixed operations management instructor with the National Automobile Dealers Assn.'s University Academy.

He says to notice vehicles lined up at the aftermarket services along this main drag, competitors such as the quick lubes, muffler services and brake and tire guys, all open late to meet the market's needs.

That irks Atwood.

“Why isn't the dealership service department open those hours as well? Why isn't service open the same hours and the same days as sales? If you're open, customers will come,” he says.

Service dollars are predicted to drop 25% between 2009 and 2013, according to J.D. Power and Associates.

The creative, assertive and persistent service directors who grab market share will be the winners.

Atwood offers low-tech approaches to building service volume and dollars.

He suggests launching an advisor business-card referral campaign to build business.

Dealerships should get permission to hand out fliers at local businesses, hospitals and such, where many people work long shifts, he says.

The flier should promote that the dealership services all makes and models, its service department is open late and offers vehicle pick-up and delivery service.

“I mentioned this in a class one day, and a student who later tried this said he'd gotten four appointments from employees at the local hospital from his first efforts,” Atwood says.

“You just have to let the public know you're there to provide a service that's convenient for them and you will build your service business.”

The service department has valuable assets in stock. But they go unused every minute the back shop isn't servicing customers.

“The service department has the only inventory that can't be sold tomorrow, so the goal is to sell as much of it as you can today to maximize your grossing opportunities and watch your expenses as a percentage go down,” Atwood says.

Bill Hughes, general manager and formerly fixed-operations director for Honda Carland in Atlanta, is having success from simply asking others for their business.

But management must be firm about its any-make, any-model service commitment, he says.

“Democracy doesn't work in a dealership,” he says. “With mechanics, they prefer to work on the brand the dealership sells, because they're so familiar with them, so you have to reinforce that they'll work on other makes as well.”

One opportunity Hughes is mining profitably is drumming up more wheel-alignment businesss. His staff checks alignments on 90% of the cars coming into the shop regardless of reason.

“We've found that 47% of those vehicles will need an alignment. We don't pay the tech for checking it out, nor do we charge the customer for checking it out,” Hughes says. “We give the customer a printout with his alignment specs and then suggest we can take care of the alignment while they're in the shop. We close 85% of them.”