Monthly Archives : August 2016

LIFT from CFS > 2016 > August
29Aug

Quick Lube: A Minor Investment for a Huge Return

blogpost_salestalktracksIn the past, customers were willing to bring their vehicle into a service department and wait patiently. However, with the rise of convenience and the promise of speed in the form of express independent chains such as Jiffy Lube, regular service customers began forsaking the dealership and started defecting to these chains. Manufacturers took notice and started initiatives encouraging franchise dealers to implement their own quick lube services in order to recapture this lost business. Many dealers acquiesced and started offering these services to their customers.

To start with, these quick lube service processes mimicked those of all other services: Inspection, Service Recommendations and then Repair Order Completion. Yet somewhere along the way, that process changed. Spoiled by an overwhelming amount of highly profitable warranty work, franchised dealers were making so much money that quick lube services somewhat fell to the wayside and customers again defected to the independents for these services.

Well, I can promise you this, if you fail to do a good job with your quick lube, you are missing out. It only takes a minor investment to get one heck of a return in CSI, customer retention and yes, that all-important profitability!

The bottom line is that it is all about the process. Sadly, this is what typically happens: The customer arrives for an oil change. In the interest of speed, the work is completed and the customer receives an inspection report as they check out at the cashier. Well, you can forget the customer agreeing to do any additional work then — they are ready to leave. That is if the inspection report and recommendations are even gone over with the customer in the first place. Many times a greasy report gets handed to the customer, which is summarily ignored, as they pay for their oil change and go on their merry way – completely unaware that their tires are so worn down they could blow out on the freeway at any time.

The process should be is as follows: As soon as the vehicle pulls in the inspection should be complete and the report out to the advisor before the oil cap is even off the car. The advisor should then grab the customer and go over the report, “your catalytic convertor is making a whining noise and is about to go. In the interest of safety, how about we fix it while you are here? It will only cost $X and take X hours and we can have you out of here by X time.”

Instill this process right from the first customer interaction in service. Inform the customer about your complimentary inspection that ensures all is well with the health of their vehicle. On that first visit, establish the process and go through everything top to bottom – no TSBs were found, no outstanding recalls, the 21-point inspection details, the car is operating just fine. This builds trust right from the beginning and the customer is more likely to believe your recommendations when additional work starts coming up as the vehicle ages.

If done up front like this, and if the process is run correctly, CSI and customer retention soars.

I think many dealers miss the opportunity to make a whole lot more money and take better care of their customers with quick lube — it truly is a missed opportunity. Let the customer know about that tire special from the OEM –Four tires for the price of three – no one has better prices on tires. You have them in stock and it will only take a few minutes…

The funny thing is, when I bring this up with dealers, they uniformly reply, “we don’t have a problem with our quick lube, we already do it that way.” Yet I can see that this is not the case.

My suggestion: send in a mystery shopper to see how the process really runs. The results may surprise you and open up a gold mine of opportunity.

Slow the process down just a little bit and be sure to go over the inspection report with the customer. Train your quick lube techs to do a thorough inspection, look for all the TSBs and outstanding recalls work — around 80% of vehicles will have something that needs fixing, so why leave that money on the table? Get that inspection report out to the service advisor FAST so they can review it with the customer at the start of the process, rather than when they are ready to leave.

If needed, incentivize your techs and service advisors with a little bonus to ensure this process is handled well. You will see a huge return on investment in CSI and customer retention, as your customers will no longer defect to the competition for their minor work.

The end game is this – implement (or re-implement) the process of a full vehicle inspection followed by a service advisor presenting recommendations prior to any work being completed in your quick lube department. If that means training your “B” and “C” technicians how to do inspections, how to look up VIN numbers for open recalls, warranty or TSBs and then turning those results over to the service adviser, do it. Your service advisers are your salespeople, not your technicians. Give them the inspection report and let them do their thing. By doing this, you will immediately increase service revenue for one simple reason – you started asking for it.

 

-Tom Cannata

VP OEM & National Accounts

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8Aug

Give Them Options & Revenue Will Come

There’s nothing more disphonecover3heartening to a service advisor than presenting a customer with a list of service recommendations only to hear the customer agree that they need the service, understand its importance and value, but they simply don’t have the available funds to complete it.

In such a highly competitive market that service advisor knows that when the customer walks out the door, the likelihood of them returning is not great. They will probably price shop the service and end up getting the work done elsewhere.

Sure, there are times when the “can’t afford it” excuse is simply that… an objection. But even the service advisor with the best sales skills can’t overcome the objection when the customer truly doesn’t have the money to pay for the services. However, there is a way to overcome those objections and assist customers that want the service but can’t pay for it all at once, regardless of their credit:

Offer them options!

I’m not saying start accepting bitcoins, or trading service for cows. But here’s the deal: Many dealerships limit the forms of payment they accept to cash, check and credit cards. And some now even refuse payment by check.

Not all of your customers have money sitting in the bank waiting for emergencies, or credit cards with available credit just waiting for their use. There are, however, plenty of options available for all types of credit customers. They are worth investigating so you can offer your customers all the many types of financing available – and let them choose the right one for their needs. It is a great way to improve the customer experience. And today’s sales process is increasingly all about that customer experience.

With that in mind, many of the dealers I talk to don’t really know about the different types of service financing options available. Here’s a brief summary of potential options depending on your customer, which I hope helps:

  • Low Risk Customer: For customers with excellent credit
  • Credit Cards – This is the option that almost every dealership accepts as a form of payment. While the upside may seem to be that it’s simple, there are unseen costs involved including processing, terminal and service fees, etc. And, just like any credit card processor, you pay a percentage of the total charge. Plus, you are banking on the fact that the customer has enough available credit on their card, which isn’t always the case.

Options: Synchrony, CFNA, OEM Manufacturer Card

  • Mid Risk Customer: For the broadest spectrum of customers
  • Simple Interest Loans – These loans are similar to car loans in structure – but in much smaller amounts. They allow a customer to finance the repairs – oftentimes at much lower interest rates than a normal credit card – and, in many cases, offer an interest-free period where the customer can repay the loan with no interest. Several companies offer this type of loan. While the interest rates are credit-based, many have a wide range of credit scores they consider for loans and can finance the more credit challenged customer as well.

Options: Confident Financial Solutions (CFS), NetCredit

  • Highest Risk Customer: This is a point-of-sale solution for those with no other options
  • Secured Loans – This type of loan is typically secured by some sort of collateral. Because of this – and depending on the collateral – lower credit scores are considered and could qualify for these loans. While not as high of a cost to the consumer as a payday loan, the interest rates for low credit customers can go as high as 40%.
  • Lease Agreements – This type of financing is typically reserved for the highest risk consumer. Leasing auto parts (and service) is costly but could be a viable option for those customers with the most challenged credit. The pros for the dealer are that they get the service business. It also gives that consumer who has no other resources an avenue to get their vehicle repaired. As opposed to rent-to-own products, this arrangement tends to come at a high cost to the consumer, typically resulting in repayment of double the amount financed over the entire term. However, it will help those that are truly in need.

Options: Springleaf Financial, One Road Lending

As you can see, there are many options for payment you can provide for your customers. The simple fact of offering all of these options will, by itself, help increase service revenue as car repairs, in general, are a necessity for many and maintaining a vehicle properly will, in the long run, cost them less.

I am not in any way suggesting that as a dealer you should act as a financial advisor. Just provide your customers with all the available choices. Let the customers decide which payment method best fits their needs. You may be surprised which they select. Either way, you’ll get the service business that might otherwise have walked out the door and down the road to your competition.

 

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