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Q&A: Service Does Not Equal Sales

Scot Eisenfelder says too many dealers fail to fully capitalize on the customer-retention and lead-generating potential of a frictionless service experience.

April 2018, Auto Dealer Today - WebXclusive

by Tariq Kamal - Also by this author

Affinitiv’s Scot Eisenfelder advises dealers to plug service retention leaks to protect fixed ops revenue and continue the conversation that leads to each customer’s next purchase. Photo by Danny Baza Blas via Flickr
Affinitiv’s Scot Eisenfelder advises dealers to plug service retention leaks to protect fixed ops revenue and continue the conversation that leads to each customer’s next purchase. Photo by Danny Baza Blas via Flickr

Dealers rely on fixed ops to maintain the customer relationship and tee up their next purchase. But many dealers fail to fully mine that resource, allowing customers to shop around, drift away, or leave a dealer group when they leave a store. Auto Dealer Today sat down with Scot Eisenfelder, CEO of marketing solutions provider Affinitiv, to ask how a dealer can be sure their next service customer will stick around long enough to buy another vehicle.

ADT: Scot, tell us something about the relationship between service and sales that we don’t already know.

Eisenfelder: Clearly, there are a lot of stats out there that say the customer who is servicing with you is up to two-and-a-half times more likely to buy their next vehicle from you. The key is understanding why, because no sale is a foregone conclusion.

For a lot of consumers — and this is hard for those of us who grew up in the car business to understand — the vehicle itself is kind of an appliance. It gets them from here to there. Having confidence that the vehicle is performing the way it should and knowing they have a trusted source to get service when it’s not performing the way it should is often more important than the vehicle itself.

That’s where the relationship lies. If there is an issue, God forbid, I know where to turn. We often get too caught up in product and price. Those confidence issues around the vehicle are incredibly important.

ADT: That’s good information. What does the dealer do with that information?

Eisenfelder: The dealer must acknowledge that, to get the sale from someone who is servicing with me, I need to create an ongoing dialogue. Service marketing is not just about the next service appointment. Make your customer aware of other things you can do for them at the dealership level. How do you use the fact they are physically visiting your store? Do you invite them into the showroom or meet them where they are? There are lots of tools you can now use, as a dealer, to make that dialogue happen.

ADT: How about at the group level?

Eisenfelder: That is where the great future opportunity lies. I’ll give you an example: My wife loves the Mercedes-Benz service experience. But she has had four in a row, and she expressed to her service advisor, Anya, that she is not interested in getting another one. Anya actually called up one of her friends at her group’s BMW store: “I have a customer here. She’s had a Mercedes the last four times, and she’s finally decided to try another brand.”

ADT: That’s impressive.

Eisenfelder: Right? That’s what owners of dealer groups need to think about. How do I start to expose someone to other brands in my stable? When do I start communicating that? The fundamental problem is the primary economic unit is the store, not the customer. As far as we know, nothing in Anya’s pay plan will reward her for making that call to the BMW store.

ADT: They would need a process.

Eisenfelder: Some dealers do that within their group loyalty programs. Few do it well. But I have seen some that offer a benefit for moving a customer within the family. So let’s think about that process from a brand expectation standpoint: First, you make a branded promise that transcends more than one store. Next, you share information. You make every store aware this customer’s lease is up. You attack the incentives, at least at the leadership level. Then you compensate the employees who are retaining customers within your portfolio.

With most of the money in this business coming from the service side, we should be able to invest more in the average customer. The real shame is that, as an industry, we spend more money on conquest than we do on retention.

ADT: What’s the first step toward flipping that equation?

Eisenfelder: Invest in that relationship. Don’t take it for granted they’re just going to keep showing up. If they’re in for service twice a year and someone is not thanking them for their business, that’s a lost opportunity. And don’t only communicate when you’re trying to sell something. We recently went through daylight saving time. Inform me about how to change my clock. Do I know how to set the seat memory? Send me a tip of the month. Tell me about accessories.

The second investment goes into making the service experience smooth. You have an opportunity through your scheduling system to make those minutes productive and focused on each customer’s needs. The loaner car, to me, is a strategic asset. No Jiffy Lube will ever have a loaner car for you.

The third part is to only sell me what I need. A lot of dealerships will sell radiator flushes and nitrogen to fill tires. I call them gimmicks. There is enough work to do on those vehicles. The tires, brakes, and windshield wipers will all need to be replaced. Yes, it’s less engine and transmission work, but it’s still work.

ADT: But the customer can get that work done anywhere.

Eisenfelder: Think value over price. I know a Ford dealer who posted a Pep Boys employment ad in his service waiting area. He had circled with a big red marker where it said “No experience required.” People expect some price premium at the dealership. The factory trained your technicians. You use OEM parts. You have a loaner program. If they’re on a prepaid maintenance program, you can show them the invoice that says “zero.” It’s worth $125, but it’s priced to zero for you. Take credit.

ADT: Does the demand for your tools typically come from the service manager or the dealer?

Eisenfelder: We sell at three levels: service manager or advisor, dealer or dealer group, and factory. Sometimes manufacturers have co-op funds available, and it’s helpful if we can access that data. When we sell at the service department level, we have to provide them information — ROI, case studies, references — they can use to argue for the budget. When the service manager has ideas about profitability, the dealer will listen.

ADT: If you became a dealer next week, would you rotate Eisenfelder Honda so the service department faces the street?

Eisenfelder: Honda has defined brand standards and wouldn’t let me do that, but your point is well-taken. I would certainly market my service department more. I would recognize that one of the reasons you buy a Honda is there isn’t much that’s going to go wrong with that car. I’m getting customers who are more safety- and security-oriented. The idea of having a frictionless service experience should appeal to buyers of that brand in particular.

Dealer advertising still tends to focus on price and availability rather than the experience. Meanwhile, CarMax and Carvana have created entire brands around the sales experience. CarMax doesn’t talk about price. They’re charging a premium. Carvana doesn’t say you’ll get the lowest price. Carvana’s slogan is “That didn’t suck,” drawing the negative comparison to franchise dealers on experience, not price.

ADT: Love them or hate them, it speaks volumes.

Eisenfelder: I really believe in building a brand around your service experience and not being bashful about it. Have that confidence and make those investments. For most dealers, it’s not a big expense. What’s expensive is customers not getting service with you.

Comment

  1. 1. Phillip Hellstrom [ April 10, 2018 @ 10:52PM ]

    I truly appreciate the insight by a fellow Chicagoland business. Servicing customers is a challenge that most dealers fail to view as an opportunity to suggest retail options. For example, most domestic vehicles on the market fall victim to having the better half of profit servicing the vehicles rather than reinvesting in the brand for new-car volume. When it comes to converting the customers from service to sales: there most be a process; an enforced and implemented process; allowing each sales consultant to contribute in their own specific way, by their selling style. Time to separate selling styles by knowing one's personality, mannerisms, and figure or speech. Price sells no one, but value sells them all. Being able to define the ratio between cost and value will separate you among your competitors. Great subject-matter Tariq and thank you Affinitiv for your level of commitment!

 

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