Article

Service With A Smile: Building A New Service Department

September 2006, Auto Dealer Today - WebXclusive

by Terran Lamp - Also by this author

“I am about the hands on approach to learning, it’s about getting involved in the operation and knowing what is going on,” says Debbie Beckford, head of the Parts and Service Department at Orville Beckford Ford Mercury. Located in Florida’s northwest panhandle in Milton, Florida, Orville Beckford Ford Mercury has seen its fair share of opportunities and obstacles. Family owned for 15 years, Orville Beckford Ford Mercury is home to over 2,000 new, used and fleet vehicles. The dealership generated over $400,000 PROFIT last year. Averaging 88 cars per month without fleet, Orville Beckford Ford Mercury sold 154 new cars, 401 trucks, 503 used cars and 987 fleet vehicles in 2004.

Times haven’t always been easy for the folks at Orville Beckford Ford Mercury, especially when it comes to development of their service department. In 2002, a competing dealership was built in the same county. Not only did the dealership compete in cars and trucks, they decided to buyout the Service Manager and 8 of the 14 techs that worked for Orville Beckford Ford Mercury. After the loss of employees, Orville Beckford’s service department started going nowhere fast. Between 2002 and June of 2003 the department went through four service managers with a combined 57 years of experience in the automotive service industry. Unfortunately, all this experience produced no increase in the bottom line for the service department and business began to take a downward spiral.

The future of the service department looked bleak unless someone stepped in and did some major reorganizing. Debbie Beckford decided to do exactly that in June of 2003. As the daughter of the dealership’s founding father, Beckford started with no experience in service but she was dedicated to saving the department and the dealership. With 12 years experience working the front end of the dealership, Beckford never imagined she would turn her focus to the service department. “My dad always said you must inspect what you expect,” she says. “I jumped in with both feet and tried to figure it out.” So she rolled up her sleeves and learned the process from all angles. She quickly learned to dispatch, write tickets and manage customers from a completely different viewpoint. In a male dominated profession she proved that she could get dirty and brave the unwelcoming weather conditions just as her male predecessors. “Figuring out how people wanted to be treated and what needs to be done played a huge role in structuring and fixing the service department,” says Beckford. Six months later, she had a staff of three advisors, a warranty clerk, a cashier and eight technicians. Beckford also brought along another female colleague, Maria Ceasar, currently the Service Manager at Orville Beckford Ford Mercury. “I knew it would be important to have someone whom would know what I wanted and make it an easy transition for the techs when I started focusing more on the operational side of the department,” says Beckford.

With things beginning to run smoothly, Beckford was able to take a step back and look at a strategic view of the service operation. One of the first reports she tackled was a service advisor report that listed the activity of each advisor by pay type. How is the service paid for? Is it customer pay, internals, manufacturer warranty or other extended service plan. Focusing on customer pay, Beckford turned her attention to increasing the number of customer pay hours per repair order. She also noticed that the service staff was using the incorrect pricing menu to up sell maintenance options. After reviewing the up sell strategy and the correct pricing matrix, Beckford was able to increase her gross by $10,000 the following month. At this point, she decided to take a deep look at the practices of the service department and work with her staff to create a strong synergistic team. “Every month I focused on bringing something new to the department or slightly changing something that was not going to have a long learning process,” says Beckford. “I am always looking for something new and trying to improve.” Suddenly, she began to develop her team and broaden their knowledge base as it pertains to customer focus and profitability.

There are some things that every service department can do to increase their bottom line and meet the customers’ needs.

  1. Make sure you get the first appointment set at the time of sale.
  2. Use mirror-hang tags to advertise specials and give customers a reason to come back
  3. Always look for marketing ideas for service
  4. Send out newsletters to keep your dealership in front of customers.
  5. Evaluate the maintenance programs in place for advisors to sell.
  6. Review the system or matrix you have set up to for selling to a customer.
  7. Get the customers involved in the inspection process.
  8. Counsel everyone on the changes you will be making in your Service Department.
  9. Make sure advisors are spending enough time with customer.

As a Service Manager, BE INVOLVED! Know how your operation is running. Know how your advisors and techs are interacting with customers and know how your appointment setting process is being handled.

In September of 2004, Orville Beckford Ford Mercury survived another devastating attack to the business. Hurricane Ivan ripped through Milton, FL and the dealership was unable to do business from September 16th - September 27th. Fortunately, Beckford and her team were able to follow the processes they had in place to accommodate customers and start up easily after the disaster. She attributes the ability to make adjustments and continue to meet customer demands to her devoted and reliable service staff. Beckford and the staff are committed to doing what is right for the customer and the department to get the job done.

The service department spends valuable time and resources to educate their customers and their employees. Beckford request that her advisors and techs slow down and take time with each customer to educate them on the importance of maintenance requirements and service options on their vehicles. The department also selected DealerPro training to help evaluate their business and offer valuable solutions. DealerPro provides Beckford with a performance evaluation and profit potential analysis that has helped make the service department more profitable. “It is important to remember,” says Beckford, “that whatever solution you choose, everyone has to be on board from the dealer to the service advisor to the techs. Otherwise your plan won’t work.”

Some of the goals that DealerPro has helped Beckford develop are:

  • Achieve 100 percent Service Absorption
  • 3.0 hours per customer-pay R.O.
  • Upsell oil changes like Lube franchises do
  • Increase service bottom line by up to 40 percent or more
  • Increase customer satisfaction
  • Training that will help them attain their goals are:
  • Fixed Operations Personnel Seminar
  • How to provide customer choices
  • Maximize sales
  • Maximize customer satisfaction
  • Maximize customer retention
  • Service Manager Training
  • Service selling
  • Service Maintenance menus
  • Job Pricing Guides
  • Daily performance evaluations
  • Service Advisor Training
  • Maintenance menu selling
  • Feature-benefit selling
  • Alternate choice selling
  • Customer follow up

Above all else, Beckford stresses the importance of communication with her employees and her customers. Making the customer feel valuable and involved is an overriding priority and with some hard work the rest will follow. “When we schedule appointments we make sure to tell our customers to schedule an extra 15 minutes so we can provide them with counseling and advice regarding the maintenance of their vehicle,” says Beckford. In addition, she also uses special incentives and customer recognition tools to keep customers excited and keep Orville Beckford Ford Mercury in the public eye.

It is important to get customers involved and increase the awareness of the options your service department offers. With help from a marketing company Orville Beckford Ford Mercury has been able to create a newsletter, “Fuel for Thought”, to send to customers. It is a place to recognize loyal clients and show continued appreciation. Give customers a fun and factual way to find out information as it pertains to maintenance of their vehicle. “If you just sit and wait for business to come to you then you are going to get what you get,” says Beckford. “You have to make changes and stand out from your competition.”

“It’s a constant learning process,” says Beckford. With ten techs and three service advisors, the future of Orville Mercury’s service department is beginning to see an upward trend. Compared to first quarter of 2003, just before Beckford began her walk into the service department, Orville Beckford Ford Mercury has seen tremendous growth. The average hours per repair order has risen from 1.4 hrs in January of 2004 in to 2.5 hrs in January 2005. During the same time, the number of repair orders written increased from 878/month to 909/month while the overall effective labor rate increased from 70 percent to 75 percent and climbing. In addition, average gross income jumped from 84K in January of 2004 to 88K in January of 2005. “These are normally July/August numbers not January/February numbers,” says Beckford. “I am extremely grateful that this is happening to me right now.”

Vol 2, Issue 4

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