July 2011, Auto Dealer Today - WebXclusive
It’s common knowledge that houses must have strong foundations to withstand the forces of nature. Didn’t we all learn that with the three little pigs? The same could be said for your service department. The best technicians and facilities won’t do any good if you don’t have a foundation for presenting your service customers with all maintenance and repair options.
Laying the Foundation
A great place to start is implementing maintenance menus and inspection checklists. These tools provide the groundwork for the processes that will lead to more sales.
Paolo Amendola, general manager of Steve Moore Chevrolet in Charlotte, N.C., stated that when Steve Moore purchased the “struggling” dealership over three-and-a-half years ago, a preliminary evaluation of the service operation revealed an inefficient and underperforming department with a low customer satisfaction index and not enough hours per repair order.
"Simply having the menu is useless unless [advisors] have the proper words and scripts to use to thoroughly explain it to the customer, build value and ask for the sale ... An inspection is only as good [for upselling] as an advisor's ability to sell the work."
- John Widiger, General Manager, John Youngblood Motors
The store’s managers consulted with their DMS provider, Reynolds & Reynolds, and devised a plan to revitalize the service department. The plan included implementing a menu-selling process and inspection checklists, along with an electronic service pricing tool that enabled advisors to show customers the exact price of any requested services up front; they also purchased six tablet computers for use by service advisors in the lane.
They now have two different menus in use, both in electronic format—one from General Motors and one of their own design, which Amendola said covers many of the same items as the GM menu. Advisors are able to use the tablet computers to evaluate vehicles in the service lane and present menus to customers. Customers can choose whether to use the GM menu or the dealership’s menu, which is presented with economy, value and premium options.
Steve Moore Chevrolet has also implemented an electronic 27-point inspection checklist. When the car is serviced, the mandatory inspection is performed. Then, said Amendola, “We showcase to the customer the 27-point inspection that the technician has performed while the car’s in the shop.” The customer receives a report card with items color-coded in red, yellow and green to rank the urgency of any issues discovered. The advisor is not only able to show the different issues that need to be addressed immediately or upon the next visit, but he is also able to show the customer the exact price of any recommended repairs. The advisor can present this information to the customer in person, over the phone or via e-mail.
John Widiger, general manager of John Youngblood Motors in Springfield, Mo., said he saw definite room for improvement in service when he was brought on at the dealership in mid-2010. Inspections were being performed, but no consistent process was in place for upselling based on the results. Additionally, maintenance menus were not being presented to customers at all. The store now utilizes a menu from VinExplosion that makes a series of maintenance recommendations based on the mileage of the vehicle; the advisor has the ability to look at the vehicle’s service history and cancel any recommended items that have already been done. For inspections, he said the dealership is utilizing a system from Mobile Productivity, Inc. (MPi).
During the initial walk-around process, the advisor has copies of the customer’s service history and maintenance menu in hand. At the end of the walk-around process, the advisor will tell the customer what maintenance is due on the vehicle based on their service history, as well as “the benefits are of getting those services done now,” said Widiger. The customer is given a copy of the menu and prices for the work already agreed upon, as well as the price of any recommended maintenance.
With respect to vehicle inspections, Widiger said the advisor explains to the customer that it is the dealership’s responsibility to advise the customer on how to maintain a safe and reliable vehicle. Advisors also inform customers that inspections are performed at no charge. Once an inspection is completed, the advisor can print out a report for the customer that uses the standard red-yellow-green color-coding to illustrate the urgency of any issues spotted.
"If you don't create value in what you present to [customers] and you don't show the reason why you're doing what you're doing, it's difficult [to build credibility]."
- Paolo Amendola, General Manager, Steve Moore Chevrolet
Michael Maccar, fixed operations director for Burlington Automotive in Burlington, N.J., said that while the group had been using menus “forever,” they didn’t implement inspection checklists until 2005. The checklists were implemented because the quality of the inspections being done was lacking; the technicians had no specific forms to follow and were not evaluating vehicles according to any specific guidelines. He added, “Each technician recommended their favorite repairs and the ones that they could do the quickest. They were not recommending tires, batteries and alignments, and we have found that they are the largest defection points for when a client goes somewhere else for service.”
Maccar said the stores now use inspection checklists provided by the manufacturers. The maintenance menus they currently use are printed, but they will move to electronic menus at some point. “Menus give clients a reference point of what needs to be done,” he stated, adding that all customers are given a copy of the menu as well as a copy of their inspection sheet, “and on their invoice it documents what is declined and what should be done the next time in.”
Framing the Structure
Menus and inspection checklists, however, are just the beginning and are not solutions in and of themselves. Having menus and checklists won’t increase service profits unless processes are established, advisors are trained to properly use the menus and checklists, and monitoring is performed to ensure the tools are used properly and consistently.
As Widiger pointed out, “Simply having the menu is useless unless [advisors] have the proper words and scripts to use to thoroughly explain it to the customer, build value and ask for the sale,” he stated. Likewise, he added, “An inspection is only as good [for upselling] as an advisor’s ability to sell the work.”
As soon as the menu was implemented, Widiger and other members of management devised a new lane process incorporating the menu into the walk-around. Part of that process includes scripts designed for selling service, for which he sought help from DealerPro Training Solutions. He then set aside each Monday night for an advisor training dinner, during which they reviewed a portion of the process and role-played from scripts for menu selling and upselling from vehicle inspections. Nowadays in Widiger’s Monday-night meetings, they role-play incoming customer calls and outgoing service calls, in addition to going over any changes that may have been made to the menu that advisors should be aware of, such as weekly service specials.
To ensure that sales processes are followed by the service advisors, Widiger said the service managers are scheduled to be in the main service lane two hours every morning, where they greet customers and observe advisors going through the lane process and menu presentation. He also limits advisors to writing no more than 15 ROs per day. Any more than that, he said, “and they end up shortcutting part of the process, which affects the hours per RO and ultimately affects the amount of dollars that are generated per repair order.” Additionally, to make certain inspections are always performed, the technician must complete a form for each vehicle or the system won’t allow him to sign off on the repair order.
Maccar, who consulted with M5 Management Services on menus and inspections, said the group’s stores underwent “walk-around training and how-to seminars” to learn proper menu presentation and inspection checklist utilization. He believes training and employee buy-in are essential to upselling service. “I think when you are asking anyone to change or do something different, from lot attendant to president of the company, you have to show them the pay value and what is in it for them.”
He also pointed out that an advisor trying to upsell with no tools or processes in place can be just as detrimental as one who isn’t trying to upsell at all. He explained that many advisors have been wrongly programmed to oversell customers, which can drive customers away. “In this business climate, you cannot call a client and try to sell them $2,000 worth of work every time they walk in the door,” he stated. “You have to constantly monitor what is being sold in the drive because you could have an advisor driving people out of the door and you would never know it.” He said they are currently putting together new training classes for new hires and as a refresher for current staff.
"Menus give clients a reference point of what needs to be done ... [Customers are given a menu and their inspection sheet], and on their invoice, it documents what is declined and what should be done the next time in."
- Michael Maccar, Fixed Operations Director, Burlington Automotive
Also taking accountability into their own hands, Amendola and other members of management at Steve Moore Chevrolet devised the processes to be used in the lane and instituted training on those processes. The most difficult part, he said, is resistance from service managers and advisors accustomed to the old ways of writing up service. He believed many initiatives like this fail in other dealerships because management doesn’t stand firm and push harder to make the changes permanent, instead deferring to the opinions of service personnel who don’t want to adapt and insist the new way simply won’t work.
Indeed, adopting new tools and processes to help upsell in service can result in some personnel issues. Amendola said that telling service staff who were used to doing things the low-tech way that they now had to do everything electronically was the most difficult part of the overhaul. “It was difficult and we lost some people, but we lost them because they didn’t want to adapt … We tried to teach, coach, counsel, but we also let the people go if they didn’t want to follow our process.” So while some growing pains were necessary, the overhaul has resulted in “tremendous results.”
Widiger of John Youngblood Motors stated that since adopting the maintenance menus and implementing new selling processes less than a year ago, his service department’s hours per RO have gone from less than one to between 1.8 and 2.2. He broke down his department’s results from February 2011 to illustrate how the department has benefited. Of 424 retail repair orders, 24.8 percent had inspection upsells and 35.9 percent had menu upsells.
Amendola’s service department nearly doubled its hours per RO and gross profit since revamping the service operation over three years ago. He added that technician efficiency and service CSI have improved significantly as well. The menu, inspection checklist and tablet computers he implemented not only helped streamline the process in the service department, but also help build credibility with customers—something he said can be one of the biggest challenges to upselling.
“If you don’t create value in what you present to them and you don’t show the reason why you’re doing what you’re doing, it’s difficult [to build credibility],” Amendola said, adding that the way the information is presented shows the customer that there is a knowledgeable person in the shop who has evaluated their vehicle. “Customers like to see that you’re looking out for them in maintaining their vehicle.” Plus, presenting exact pricing helps build credibility by preventing any surprises at the cashier’s counter. “They know in advance what they’re going to pay.”
Widiger agreed that the physical presentation of the information was more persuasive to the customer than simply being told what is needed “because it’s black-and-white in front of them.” He added, “If you’re not using [menus and inspection checklists], you’ve got no shot at selling … Fixed ops is the most overlooked opportunity in the dealership. You don’t have to have another customer; you don’t have to write another repair order. You just have to train your advisors on how to do a better job on the repair orders that they’re writing.”
Vol. 8, Issue 4