In most dealerships, the sales department is typically seen as the favorite child, despite the fact that it’s typically the service department that does all the heavy lifting and keeps the house in order. Because of that, sales is usually where new technologies, website widgets, leads and other digital expenditures are introduced. Just take a look at most dealership websites and you’ll find a sad absence of any real service presence – other than perhaps hours of operation, hidden in small print in some corner, along with a basic service schedule form.
I get it. Acquiring new sales customers is a highly competitive business these days. As a result, dealers tend to focus the majority of their time crafting strategies to do just that. However, it is the service department that offers the greater opportunity to increased revenue — more than any other department. It just needs a little love and attention.
I’ve worked with hundreds of service departments over the years. Those that do well follow a few simple best practices that work. I thought I’d share a few processes that can transform your service department into a well-oiled and more profitable machine.
1. Use Technology Well:
Dealerships that embrace technology in their service departments operate more efficiently with increased profitably. Technology can help your service department decrease average repair times and better manage the flow of service traffic. It can also increase technician productivity by reducing the amount of down time waiting for parts, or an approval from the customer on a service recommendation. A simple way to start is to monitor the workflow and processes in your service department and identify areas which slow down or halt work progress. This can help locate any pain points that affect the volume of service work your shop can handle. Once the pain points are discovered, look for technology to help. Or, consider making changes by implementing processes to better service your customers and complete more ROs within the same amount of time.
2. Communication is Key:
How often do your service advisors play phone tag with customers to get service recommendations approved? Typically, the time between the inspection and actually reaching the customer for approval is far too long.
Offer multiple ways for your customers to contact and/or respond to a service advisor is key. While a customer may not be able to take a phone call at work, they can often easily answer an e-mail or text message. Internal communications are equally important. While most dealerships have a CRM to track activities pertaining to sales, not all have integrated their service department into their CRMs. Check with your CRM vendor to see what they offer, and train your service department well on its use. These type of systems allow relevant personnel to check vehicle status, see inspection results and service recommendations. It then becomes a much simpler process for the service department to more efficiently service the customer, answer any status-based question at a glance. It also creates a valuable record enabling advisors to offer more personalized service in future customer interactions. This tends to build trust — a more informed customer also means more approved recommendations and less declined services.
3. Offer More Service Financing Options:
I bet a good number of your customers decline service repairs today, not because they don’t want them, or find them unnecessary – but for the simple reason, they cannot afford them.
Consider offering multiple ways for the customer to pay for service repairs. Integrate financing options into each process touchpoint: From the moment the customer pulls into your service drive, train your advisors to inform customers that financing options are available to them. The customer is then primed with the knowledge and may not be quite so hasty to decline the recommendations, opting instead to explore financing as a viable option. Copy the successful practices of department stores. Whenever the customer is ready to pay for repairs, train your employees to ask whether they would like to pay with cash, check, credit card or financing. Department stores use this process for a simple reason, it works.
While some OEMs have lines of credit available, these are typically reserved for tier one credit customers and may not be available to the majority of your existing customers. There are alternative financing options that extend credit to a wider range of customers including those with less than perfect credit. Investigate and adopt those that work best for your dealership. A customer may not be able to pay a $1,800 repair bill all at once. But in the ever growing, payment driven society we find ourselves in today, they could be more comfortable with a $75 per month payment option.
4. Don’t Hide the Service Department on your Website:
According to a 2013 Google study, “The Road to Winning Drivers: What Drivers Want in Automotive Aftermarket Service,” each month, 70 million searches on Google were for aftermarket services. That’s sure to have grown over the last couple of years. However, most consumers have to turn to sources other than their local dealer’s website for information about their vehicle’s service needs. Look at many independent service facility websites and you will find robust information regarding the services they offer, along with some pricing for more basic maintenance services. Many offer blog articles and/or videos explaining the importance of different services as well. Update your website so that your service department presents online just as well as it does offline. Find a robust online appointment scheduling software that integrates well with your website, as well as internally in the shop. Have financing options highlighted.
Take steps now to give your service department the tools it needs for success in 2016 and beyond!
(This blog post was also featured on CBT News)
About The Author: Tony Orlando is CFS’ Vice President of Partner Development. More than 15 years Automotive retail, OEM and third-party lead provider experience. Two years dealership sales and service experience and 13 years with both import and domestic OEMs. This is Tony’s second automotive startup company. He spent three years with TrueCar cultivating its business in the Southwest states. Maintains relationship with over 600 franchised automotive dealers and industry leaders. Tony has a Business Administration and Marketing degree from Mary Washington College Fredericksburg, VA.
Legal Disclaimer: The application generally takes 2-3 minutes. CFS will promptly fund the repair amount once repairs are completed and documents are executed. All loans are subject to approval pursuant to standard underwriting criteria. The CFS 60-Day Interest Free Program applies to approved customers who pay their entire loan off on time with no missed payments. Available amounts, terms and the Annual Percentage Rate (APR) will be based on an evaluation of your credit history and your state of residence. The interest rate is fixed for the life of the loan and could range from 9.99% to 36.00% APR.Read More