Practically every dealer I know is aware that service can be a huge generator of profit. But it's alarming how rarely that sense of awareness translates into meaningful action even as new car sales margins continue declining.
It amazes me when I see dealers spend lavishly on sales marketing and then skimp on service or retention technology, process and accountability. It's really a shame especially when you consider that with a little effort, the service department can make an impressive contribution to your net income.
The primary business challenge, of course, is first-time customer retention. In other words, you need to get a customer into your service department the first time and then do all the follow-up work necessary to make certain the customer returns again and again.
Over the years, I'vehave witnessed and implemented quite a few best practices that can significantly increase your chances of scheduling that crucial first service appointment, ensuring that the customer shows up and then keeps coming back time and again. Remember, if you can get them to that first appointment, they then have the chance of coming in again! And again and again! Now we're talking about some real cash flow!
Here are five proven best practices for improving your income from service:
- Implement a workable process enabled by a technology for automatically identifying which of your customers should be coming into your service department and then market your service offerings directly to them in a very specific way.
- Make it as easy as possible for your customers to schedule their own service appointments, whether by phone, by email or via the web. This should be an easy process if the right tool is chosen.
- Use the tool and process to follow up swiftly to confirm their service appointments and send automatic email reminders to minimize the chances of them forgetting about their appointments. If they are a no-show for the appointment, your tool and process will notify you and drive an activity to reset the appointment with the customer.
- Make sure they have an ideal customer experience and become raving fans of your service department. This requires you to coordinate your processes and your technology to deliver truly personalized, top-notch service on a consistent basis and make sure that you can measure your success.
- Give your service customers a good reason to come back. Don't lose track of them when they leave. Communicate with them. Follow up with highly targeted communications.
If you make the effort necessary to send the right messages to the right customers at the right times, you will be rewarded with an increasingly steady stream of income from a growing pool of loyal customers.
As you well know, this isn't rocket science. But you'd be surprised how many dealers fumble the critical hand off between sales and service. With service department margins running in the 60 to 70 percent range, that's a fumble you just cannot afford to make.
Today's cost-effective technologies make it easy for customers to set up their own appointments while you manage the workload to keep operations running smoothly and efficiently. The same technologies also enable your customers to arrange for shuttle rides or loaner cars while their vehicles are being serviced or repaired in your shop.
Best of all, these technologies can push real-time customer information into your dealer management system, creating multiple opportunities for generating fresh revenue and profit.
Integrating sales, customer service, communications and service isn't difficult, but it does take discipline. Fortunately, the solutions and expertise are available. Don't fumble the opportunity.