Article

Optimism Abounds in Fixed Operations

June 2011, Auto Dealer Today - WebXclusive

by Don Reed - Also by this author

Over the past couple of months I’ve conducted several workshops for NADA and the Detroit Auto Dealers Association. In attendance were dealers, GMs and service directors, and I was amazed at the level of optimism displayed by all. Dealers are selling more cars and trucks, retail service traffic is increasing and net profits are improving. Great news for us all!

Many dealers tell me that the dealership closings in their markets have resulted in more customers coming in for both sales and service. This of course is a positive trend, but my concern is this: What are you doing with the additional service customers when they show up? Have you prepared your service team for these new opportunities? Do you have a customer-friendly appointment process online, on the phone and in person? Do you have the proper selling processes in place to professionally engage your customers? Once you get these new customers, do you have the right processes in place to keep them coming back?

In my February 2011 article for Auto Dealer Monthly, I addressed the “Five Rules of Engagement for Service Customers,” in which I outlined how a dealer must hold their service team accountable for following the rules outlined below:

Rule #1: Offer an appointment to 100 percent of incoming service calls.

Rule #2: Conduct a vehicle walk-around with the customer.

Rule #3: Present a maintenance menu at the time of write-up.

Rule #4: Complete a vehicle health check with every RO.

Rule #5: Conduct an active delivery of the vehicle back to the customer.

Interestingly enough, J.D. Power and Associates conducted a recent mystery shopping study of new-car dealers’ service departments, measuring a dealer’s performance in following rules two thru five, and Worldwide Phone Pops evaluated dealers’ performance with rule one after shopping over 9,000 dealerships nationwide. Let’s review the results of each of these.

Starting with Rule #1, Worldwide Phone Pops states, “57 percent of all service advisors do not ask the customer for an appointment.” Why would a dealer allow that to happen? Why would you not hold everyone accountable for offering 100 percent of your service customers an appointment? (My dentist does!) To make matters worse, Phone Pops states, “38 percent of operators keep customers on hold too long causing hang-ups.” Are you going to let this happen to all of the new opportunities we are all so excited about? Would it be acceptable if your salespeople didn’t offer 57 percent of phone ups an appointment for a test drive? Do your phone ups stay on hold for prolonged periods of time waiting for a salesperson?

The mystery shopping study from J.D. Powers shows that Rule #2 did not fare much better; only 53 percent of service advisors conducted walk-arounds. My guess is this means that the remaining 47 percent of advisors performed the function of a clerk, preferring to stay at their work station waiting for the customer to come to them. When you install a walk-around process, you will discover that your customers like it and your CSI will most likely go up along with your sales and gross profits.

The walk-around is a perfect lead-in to a maintenance menu presentation, Rule #3. The survey showed that only 29 percent of service advisors made recommendations for other maintenance or repairs. Even more interesting is the fact that 46 percent of customers said yes to additional work at the time of write-up. That sounds like a closing rate of 46 percent! How would you like that closing percent on extended service contracts in your finance department?

Rule #4 is about the vehicle health check (VHC), or multi-point inspection. It’s really like giving your customer’s vehicle a physical checkup to ensure the customer is driving a safe, reliable vehicle. The survey showed when an advisor called a customer, reviewed the results of the VHC and made recommendations for additional repairs or maintenance services, a whopping 56 percent of customers said yes. A 56-percent closing percentage, in my book, is a great job! Are your technicians inspecting 100 percent of the vehicles in your service department? Are your service advisors reviewing the results of the inspection with every customer?

The active delivery, Rule #5, is one of the most important processes for building owner retention and increasing CSI. This process is quite simple and costs absolutely nothing. Always retrieve the vehicle and bring it to the customer; never send the customer to find their vehicle. J.D. Powers states that 23 percent of advisors had their customer wait alone while their vehicle was retrieved, 5 percent of advisors waited with the customer while the vehicle was retrieved and 16 percent of advisors escorted the customer to their vehicle. So, let’s be generous and give the advisors a combined compliance rate of 44 percent.

By now, I’m sure you see where I’m going with this scenario; 56 percent of customers were simply told where the vehicle was. When you deliver a new or used vehicle to a customer, do you tell them where it’s parked and to have nice day? Again, this is a very simple process that costs you absolutely nothing. Why not make it a rule starting today?

Yes, optimism abounds in fixed operations, and that optimism will turn into record sales, record profits and record CSI scores for those dealers who make the Five Rules of Engagement company policy and hold their service teams accountable for 100-percent compliance. You might hear a few moans and groans from your underachievers, but remember you are not running a democracy!

Vol. 8, Issue 4

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