As I look through a group of dealers’ financials I quickly see the huge increase in warranty labor sales and gross. I quickly think of the enormous opportunities there are to capitalize on the increased traffic coming in the door. They are endless, increased revenue, increased customer database, unknown or lost customers coming trough the door and I even know of a dealer that sold 12 cars last month off customers that have come in simply for a service recall. These are all great right? The answer is yes, for the short term. Even though there are incredible profits made currently due to the increased warranty traffic you need to keep a few things in mind to make certain your business is positioned for future prosperity.

Keep an eye on your retail business: Due to the increased traffic and workload from the recalls your retail business will suffer. Quite frankly all of your service advisors made more money last month than they did the prior year due to the “free” warranty money coming in, so their focus is not on your core business. All your hard work and effort to build your retail sales and gross can go out the door simply due to the ease of running and filling your stalls with recalls. Suggestion: Do not let the recall business erode your “core” business and keep your advisors focused on selling service, menu presentations, complete multi point inspections, proper walk around and cultivating customer loyalty.

This too shall pass: Although the immense nature and huge volume of recalls that still need to be done will keep us going for a period of time, there will be a point in time that they reduce. When this happens your traffic will stop. If we are successful in retaining ten to fifteen percent of those that came in for the recall and that have never been in with you before I would consider it a success. The point is, the majority of them you still will not see coming back to your store. On smaller scales history would dictate this to be the case.

Learn from history: When I was running a Ford store in the early 2000’s at the height of the firestone recall we had more late model trucks and SUV’s coming in for replacement tires. Then this was the largest tire recall in history. At the time everyone in the store from parts to service was fat and happy because we had more traffic than we could handle doing over 100-tire replacements daily including Saturdays. The bad news we were more interested in getting the work done instead of looking to grow and retain our customer base. In addition we didn’t have awesome tools at our disposal to give a customer a professional inspection printout with a competitive price quote. Suggestion: Increase staff to help with the increased demand, perform a complete inspection and communicate to the customer. Take it to the next level and make it a positive customer experience and imagine if we were able to retain half of these customers that have not visited a dealership prior to the recall.

Many dealerships are focusing and investing in fixed operations. They are adding high tech equipment, expanding service bays implementing growth strategies and extending hours to meet the demand of the customers. All of these for the most part are necessary and will provide bottom line improvement but I warn you, the time is now, more than ever to focus on your people.

It is the people within your store that provide the experience that customers remember and want to come back. It is the people that build the relationship with your customer. Customers come to see Jim in service – not the brick and mortar or fancy alignment checker in your service drive.

I bring this up because our people see the financial investment being made on specialty equipment and space, but in return they are asked to work longer hours and handle more responsibility and duties. I understand the “tools” put in place are there to help improve profit that in return allows them to make more money. Adding more space allows more cars to flow through the shop that in return helps the advisor improve their customer satisfaction scores, end result make more money. So these tools are actually put here to help everyone achieve higher customer satisfaction and increased income potential.

So why don’t a majority of our employees see it this way? It’s simple, as an industry we typically do not do a good job of communication and performance acknowledgement. Our people want to feel the love and be recognized for their efforts.

Here are some tips that will help communication within your employees and ways you can praise and acknowledge your team’s efforts.

• Commit to training and advancement from within – Employees will see this process and strive to achieve the same levels.
• Make sure your compensation plan is fair and within guideline in your market – I wanted it to be known that I will overpay for performance, people wanted to stay with me and I often had calls from those that wanted to come to work.
• Tackle negative emotions – Do not let these fester, they only get worse. Be in touch with your team so you can see and feel when these issues arise
• Encourage, Encourage – Bob Wooden – NCAA basketball coaching wizard had a teaching way about him. A study was performed of his teachings for an entire year and they found only 6.6 percent were expressions of displeasure. But 75 percent were pure information on what to do, how to do it, when to intensify an activity.
• Authentic recognition – Not automatic, the human touch is paramount. Automatic recognition can become impersonal.
• Tied to the employee’s perception of value – People know when they’re valued, and they should have a good idea of their value to the organization. Monetary rewards can skew this notion of value, linking it to cash when it should be linked to appreciation of extra effort and smarts. Money is appropriate much of the time, but it’s not the only – or even the most effective – motivator. Treat employees as valued team members, not as numbers. Most of the time it’s the best way to really recognize a valued player.

There are several critical performance indicators in service, however, the most critical one to measure and excel in is customer retention. Customer retention is the source for future growth. If we are able to reduce the amount of customer defections over a defined period of time while we keep our arms open welcoming new, we will continue to have a customer base that grows month after month. The main focus is to reduce the customer defection after the warranty time period expires. It is no secret within our industry that once a customer reaches the end of the warranty time period they almost simply disappear into thin air. The reality? They were looking to defect long before they vanished.

Every service visit, every customer touch point is recorded in a service experience bank deep within our customers minds. Every time a positive customer experience happens there is a deposit in the emotional bank and trust. Conversely when there is a negative experience there is a withdrawal. Here is the secret, and it's really no different than our physical bank accounts, the withdrawals are easier, quicker and even more severe than the time and energy it took to earn the deposits. For instance, during a relationship with a customer over the last three years that included several visits each year can be taken into overdraft with one negative experience. Simply put, our account is volatile and every single customer touch point should be treated as such. Walt Disney said it best “do what you do so well that they will want to see it again and bring their friends.”

Here are a few ways to ensure you are performing positive customer treatment.

• Actively listen – Hear what your customers are saying.
• Show genuine interest – Treat your customers right
• Treat your customer as a managing partner – value their opinion
• Build trust by being transparent
• Own up to your mistakes – Take full responsibility and then some, do a little extra
• Keep your word – Follow through on your promises
• Always say “thank you” – show extreme gratitude
• Communicate – building a strong relationship takes communication
• Invite them back – Ask your customer to come back and see you.
• Continue to over satisfy – build value and offer VIP specials.
• Respect – respect your customer, respect their thoughts and their feedback

Keep in mind that a minor 5% increase in customer retention can equate to a 70% increase in profit. Apply these eleven trade secrets on every interaction and watch your loyal customer base grow.

In my current work capacity, I have the opportunity to interact with multiple vendor partners that service the automotive industry. We are continuously discussing activities that would promote the engagement from service managers to use the innovative tools that would help solve current industry deficiencies. The feedback from the vendor partners to me is typically that the service manager is extremely busy and has a lot going on. This causes the commitment to using the performance-enhancing tool more of an obligation. After many years in the service manager’s seat, I understand how busy and hectic the day-to-day business is and it takes exceptional skill to structure your day to work on the business instead of within the business. Great leaders do this at an exceptional level and it allows them to visualize, plan and execute their strategy. Recently, I came across a great article that made several great points on what productive people do within the first fifteen minutes of their day to be successful. I will review a few of these that I feel directly applies to the position. The article in its entirety can be read on the following link on Lifehack.org http://www.lifehack.org/articles/productivity/14-things-productive-people-the-first-15-minutes-the-workday.html

On time is 15 minutes early – Be early to work and use this time to collect yourself for the day.  Instead of rushing to work anxiously and hoping to be on time, they plan ahead and stroll into work calmly. This sets the tone for the day.

Review your to-do list and deadlines – By reviewing your to-do list at the beginning of the day allows you to strategize and plan ahead. This will allow you to prioritize deadlines, meetings and future commitments.

Identify no more than 3 important tasks for the day – Leo Babauta, founder of the productivity blog Zen Habits, also sets himself 3 most important tasks (MIT’s) each morning to move himself forward. This is very critical in the service manager’s role as your task list can grow faster than you can finish them. The point is to work on it and cross 3 off the list every day to make progress.

Reduce or remove the distractions – By putting your phone on silent, not checking your personal email first thing in the morning will allow you focus and not have your schedule dictated by the chime of incoming messages.

The service manager/service director job can be very demanding and using a few known tricks to coordinate your thoughts and activities will allow you to execute a flawless gameplan.

Customer retention is much more than just a “buzzword” in the car business today. It should be what governs your day to day decisions when handling customers and training your staff. One of my favorite authors that I like to quote in sales meetings and re-read regularly is Jeffrey Gitomer. I have carried Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless: How to Make Customers Love You, Keep Them Coming Back and Tell Everyone They Know around now for the last 10 plus years because his common sense approach to customer centered ideas are easy to implement for anyone who talks to a customer, especially anyone on your service drive. Providing excellent customer service should be common sense, then how come I am constantly reminded about the phrase “common sense in this business is just not so common.” Here are a few quick tips to help those provide exceptional customer service.
 

RELATED: 5 No-Fail Ways to Increase Service Customer Retention
 

Show genuine interest

Customers like to have their concern acknowledged and want someone to have an active interest in fixing their concern. Some easy ways to accomplish this would be acting with urgency or maybe anticipating their needs.

Make it personnel

Offer a personalized greeting or use their name regularly. This is a simple and common skill that has a huge pay off...the customer may remember your name.

Never quote policy

When a customer is upset the last thing they want to hear is your policy because quite frankly I’m sure your policy is what created this upset customer. Try telling them what you can do for them and figure a way you can help with the situation.

Make a commitment and keep it

This is really important in a couple of areas. Follow up communication – If you tell someone you will call him or her with an update, you better call them ten minutes before that time. Appointment reservation – if a customer is taking the time to set an appointment you better do everything possible to follow through. For a good laugh look up Seinfeld episode rental car reservation.

Invite the customer back

Just like it says in the classic customer service training video, “The Guest.” Invite your customer back just as if your best friend was leaving your house and you wanted to watch next weeks football game with them as well. In this case your really setting the expectation to the customer that you “want” to help them next time them come in for service.

In your next training do a little role-play in these areas and watch your team become comfortable with these skills. When everyone in your organization is on the same page you win. Customer retention will soar and customers will become loyal.

The average new car customer keeps their vehicle for 6.5 years reported by Rian Bosse of BusinessJournalism.org and according to IHS consulting firm the average age of a vehicle on the road is 11.5 years. Where are these customers going for their service and repair needs?  NADA reports that the franchised dealer is capturing less than 23% of the “total” revenue potential for labor and parts sales. Here is my point, customers are keeping their vehicles longer so its time to develop a well funded, perfectly executed customer retention strategy and start to earn your customer back. There are two basic fundamentals in service that your team should practice everyday to win in the game of market share.

Previous service experience

This measure is still king of the jungle when a customer is choosing a service facility. When Google teamed up with CriticalMix and performed a market study this spring of 1500 drivers who had their vehicle serviced or repaired in the last six months it showed that a positive past experience is the number one feature for a customer when they are choosing a future service facility. In the same study fifty five percent of your customers are likely to post a review online and a staggering eighty one percent will tell their family and friends about the previous service experience. The importance of delivering a world-class service experience is second to none and you simply can’t have a customer leave your facility with the feeling of inadequate service. More than ever, the time is now, dust of the processes, hold a shop meeting and tune up your department. Make sure your processes are customer centric and discuss any updates that need to be implemented. Get buy in from your team and hold them accountable to deliver a service experience to the level you would expect delivered to one of your family members.

How well do you know your customer?

My wife said to me in passing one day. “I’m a soccer mom, a regional VP of a growing business, room parent and volunteer at our kid’s school, when do they think I will come in for service on my vehicle?” The point is most of your customers fall into this bucket; everyone is extremely busy these days. We better respect their time and not waist it when they come in for service if you want them to come back. In addition a general service reminder will not engage todays customer. All offerings need to be timely and relevant or they will be discarded and ignored. Your marketing strategy needs to be engaging and well rounded. A multi level campaign that not only is a reminder of the needed service but also provides value to the customer or they will breach their contract with you and simply move on.

In reality our customers have many choices and we need to be more convenient to earn their business. Have your team start building a relationship with the customer that can survive the constant noise of every other business trying to lure them in their front door. I believe more than ever that providing a “personal touch” approach will give you the upper hand in keeping your customers coming back.

Recently I was called by a dealership about a previous employee who was being considered for a service advisor position. Of course we were able to discuss how well he preformed for me in a lot of the standard service advisor performance metrics along with some of the areas that needed some improvement. Overall this was a young service advisor that has a great head on his shoulders and does really well with the customer. Typically he was the top producing service advisor on our Honda service drive among four other talented service advisors. I wanted to share with you why I was not able to give my previous employee a “go ahead” nod to his future employer and why I explained to the service director on the other line a glairing cause for concern.

It all boiled around his willingness to train and continue his growth early on in his career. Right now you may be questioning the head on my shoulders, but I wanted to explain the reason “why” a good training program can teach you so much about how a potential employee will fair in todays service drive. We know that an advisor will talk to more customers than any other position within the dealership, so why are they typically the least trained?

#1 our customers want to speak to the expert

There is constant change in our industry that is only accelorating. With change comes continuous improvements and enhancements from our manufactures. Our customers want to talk to the subject matter expert in all areas of the vehicle. A service advisor today has to know everything mechanically on the vehicle along with all the electronics and new features and then convey with confidence their knowledge to the customer.

#2 a good training program will keep the employee engaged

A recent study highlighted that a training session based on the “big picture” or showing the future direction of the department helped the employee understand the overall objective and be engaged in assisting accomplishing the goal. A continuous training program helps the employee evolve and when preformed correctly keeps the employee engaged with current issues. The strongest method to get that engagement is to have the employees help design the content for training.

#3 Recognition

Everyone likes to have a sense of accomplishment. Through a well-defined training program you can reward your employees for their accomplishments. Essentially you are able to fill up the emotional bank within the employee that will give them the feeling of accomplishing a hard task that ultimately will reward you for time to come.

One of the areas that I feel we fall very short on is the measurement stick used to monitor continuous training. We all have completed numerous factory-training programs and there is a lot of good content within those modules, but that is simply a foundation to start on. The factory comes out with a handful of new modules every year after you have completed the base training and that simply is not enough. You need to create a “higher learning” curriculum to follow that helps your employees to be more rounded and better versed in all areas of the operations. So when I evaluate if a new employee is going to be a critical cog in the sprocket of growth, I like to use training as the measurement tool. When I can evaluate how an employee is willing to invest in their growth and then also takes great pride in accomplishing a task, I know I have a strong core to work from. I also know that someone has not hit the “know it all” level, therefore I can expose him or her to the greater success within the automotive industry. 

As per Google’s most recent services path to purchase study the top 3 factors when a customer is deciding on a vehicle service center are, positive past experience, vehicle expertise and price of services. Of the 1,500 surveyed 63% said a positive past experience was the most important factor and vehicle expertise and price were 56% and 53% respectfully. 

Creating a positive past experience starts with ensuring their current experience has been infallible. A few easy steps to help with that are: Insist on having proper communication before, during and after the service experience. Appreciate your customers and do something for them unexpected. Resolve any customer concerns quickly and amicably. Make certain your business culture is a customer centric model and not just a catchy phrase word.

With information being readily available on most everything possible, it is super critical to customers that you are the subject matter expert. Having expert knowledge has become expected. Customers want someone that will answer their question completely and in their terms, no pressure, right? A solid training program starts the foundation, but a continuous learning strategy is a must. Those who demonstrate their knowledge will be rewarded with customers wanting to choose you for their repair business.

When looking at price, here's a few things to keep in mind. Price does not always mean cheaper. Most salespeople agree that overcoming a price objection is a matter of conveying value. At the dealer level we have the opportunity to talk about the value of the service and explain a fair price does not mean the cheapest price. In order to do this you need to be aware of your competitors pricing and know that a customer today is researching other options on price when standing in your service drive discussing the services needed. A fair price along with a conversation about value of services will help your customer feel better about the perceived cost.

Applying these 3 strategies are simply a start as there are many more factors that go into the customers decision to choose a service facility, however, they are the largest factors. As Google states in the afore mentioned study there has been a decrease from 2014 to 2015 of 12% in drivers likelihood to return to service centers and excellent service and a positive past experience are the ticket to loyalty.

Ok Service Managers, the tempature is hot, the shop is full and everyday you are wondering how you can get more vehicles through the shop to meet the summer demand. It’s upon us with a vengeance it seems. Every customer has planned that road trip and the cars are not holding up to the strains of the high temperatures. You have just finished a June that netted great profit and July is trending higher in the exact same direction. So things are great, business is good…right? The short answer is YES and it SHOULD be its summer and we see this typical spike in traffic. I warn you and to quote my favorite show, “winter is coming” and right now it’s time to plant the seed and prepare for the winter months. Here are a few tips that will help you keep your shop busy during those few months of shorter light.

Focus on the basics – I know everyone is busy, but make sure you are updating the customer record. Verify all the customers’ information. Make sure you have an updated email address which will allow you to follow up with them in the next 5 to 6 months with your holiday specials.

Plant the winter seed – Take a moment with each customer and explain the importance of proper maintenance during the summer and also the items to prepare for in the winter. We know the items their vehicle needs today, we should also prepare them for their next visit in late fall and prepare them for the need of tires, wipers, etc.

Slow down and pause – Its busy and we know that being busy causes extra strain, however, your customers’ expectation does not change with the seasons. Their expectation in summer is the same as it is in your slower months. Keep this in mind and take the extra steps necessary today to retain this customer for tomorrow. During the busy months it's easy to loose sight of this. Just remember the customer in front of you right now expects the same level of service today even if you have multiple carryovers from the prior day and a technician off for vacation and you have written twenty percent more vehicles this month.

Apply these basic fundamentals to ensure a great fall and winter season. When business is super busy, it is even more critical to make sure you complete every step of the repair process to keep the customer coming back. Do not loose sight – every customer is a precious commodity and the cost of losing one is staggering.

Transparency is key – This is the hardest one in our business since we have a history of doing just the opposite and our customer’s guard is up. In order to accomplish this you need to make certain that you are doing everything possible to allow the customer to relax their guard. Empower your customer and engage your customer early during the repair process by offering choices and listening and asking clarifying questions. Do not be afraid of transparency and simply embrace it. Everyone, customers and employees enjoy transparency

Remember that customers are people – This is one I hear on the service drive everyday. We associate customers with their vehicles and then naturally when it comes time to discuss needed repairs we are thinking of the vehicle instead of locking in and listening with the customer. The challenge would be to remember your customer by name by remembering a fact about them instead of the model and color of their vehicle. This type of name recognition will help you build a relationship with the customer instead of their vehicle.

Use humor to help lighten the mood – In no means do I intend you to suddenly become a stand up comedian when dealing with a customer, actually that type of behavior could cause the adverse affect and our customers will see right through the skit. Nothing is more upsetting than asking for a product and having a clerk or owner be rude. In contrast poking fun at yourself will help the customer feel more comfortable so that he or she can better open up to you about their need.

Treat others the way you would like to be treated – Ok this is one that has been taught to us since we were old enough to remember and understand so how come this simple behavior is so easily forgotten. Put yourself in the customers’ shoes and provide the same level of service and respect you would want. This classic lesson is a simple task that will help create trust.

Use open body language – Get out from behind the counter, smile, engage in open conversations, make eye contact; our customers can tell consciously and sub-consciously how you feel being around them. Simply be yourself, every customer interaction is unique and should be treated that way, keep it simple and don’t overthink it.

Relationships take significant time and effort to build but can fall apart quickly. Do not take the relationship for granted, appear apathetic and the rapport will fall apart faster than you built it, guaranteed. Use these simple steps to avoid the pitfalls and start cashing in on the currency of trust in your service drive.