When it comes to earning trust and loyalty, your service department is already behind the eight-ball. Most customers don’t recognize the value of the trained personnel, specialized equipment and OEM-specific experience you offer, so they perceive your pricing as inflated. They also tend to believe in speaking directly to the person fixing their car and may therefore distrust your service advisors.
Customers who manage to look beyond these negative perceptions are rare commodities that should be treated with the utmost care. The best way to reward their trust and keep them coming back is to maintain consistency in personnel, labor times and parts and menu pricing. Let’s take a closer look at all three.
Service technicians often stay at the same dealership for years, but service advisors have an extremely high turnover rate. Dealers tend to see them as more expendable than techs and treat them accordingly. That is a mistake.
As the customer’s only point of contact with your service department, service advisors are on the front lines of retention. Frequent replacement of personnel leads to an inexperienced staff and missed opportunities to establish a rapport with longtime customers.
2. Labor Times
If three different customers get the same repair at the same dealership with three different techs on three different days, will they pay the same amount? The answer should be “Yes,” but the reality at most dealerships is those three customers will receive three different prices.
Why? Because each technician will quote a different labor time for the same repair. One may quote the job at an hour, another at an hour and a half and yet another at two hours. Well, guess what? Customers talk to each other, and when Customer A finds out Customer B paid half as much for the same repair, you have permanently lost Customer A’s trust and, likely, his business as well.
Service departments must use a standardized labor time booklet. Whether it’s ALLDATA, Chilton, Mitchell or Motors, the entire department should use the same reference so labor times do not vary with technicians.
3. Parts Pricing
Many dealerships use a matrix or “customer pay” price for parts used in the service department. This price is typically higher than the “list price” quoted by the parts department. The theory behind the practice is this: A customer who contacts the parts department is shopping for price, whereas the service department customer is a “captive customer,” i.e., they’ve already selected the dealership for their repair and, in many cases, won’t even see the breakdown of parts and labor.
While this practice may yield extra profits, it is not conducive to customer trust. If a customer becomes aware of the discrepancy between the costs to the parts department and the service department, they will feel cheated — and understandably so.
Ideally, both the service department and the parts department should use the manufacturer’s suggested retail price for parts. If this is not feasible, then both departments should use the matrix price so that prices are at least consistent.
4. Menu Pricing
Let’s say you sat down to dinner at one of those fancy restaurant where the prices don’t appear on the menu. Now let’s say you ordered a steak and, when you received the bill, you discovered the guest at the next table paid half as much? To say you would feel cheated would be an understatement.
Dealership service departments are essentially doing the same thing when they allow pricing for their menu services, such as oil changes and tire rotations, to be flexible. Allowing the prices to vary at certain times with certain customers calls into question how fair the prices are to begin with. After all, a specific service uses specific parts and takes a specific amount of time, so shouldn’t the cost be etched in stone?
Listing prices on a printed menu shows you charge everyone the same amount. More importantly, it shows you believe your prices are fair and reasonable.
No customer is truly captive. Just because they chose the dealership once doesn’t mean they always will. Betray their trust with inconsistent business practices and they’ll join the ranks of people who avoid dealership service departments. Reward their business with honest, quality service and you’ll make them customers for life.
Jim Alton is service solutions specialist for Service Group, an F&I income development company. JAlton@AutoDealerMonthly.com