$91.73 B - service and parts sales for 2014

Denim Simkins
Looking back at the results for 2014 and there was an increase of $7.14B in service and parts last year and we wrote 33M more RO's. All that seems positive until I found out that the increase did not come from the retail customer repair order side. The retail customer business increase for parts and service was simply $81M, this was only 1.1% of the total increase. The disturbing trend is the increase came mostly from warranty sales, possibly recalls. This amount was an increase of $2.72B and the remaining coming from Internal, Bodyshop, Sublet, Wholesale and counter for a total of $6.33B. Where did our retail focus go? Did we simply fill our shops with warranty recalls and forget to work on the core business or is this just another indicator that our customer is spending their money elsewhere and simply using the dealer for warranty work? I look forward to everyones response
Mark Miller
I think it is a combination. From what I have seen, the art of sales (consultative or otherwise) seems to have become lost in service. It's almost as it the advisors are afraid of being to no. I think it is an indication that more training needs to be done, more real time monitoring by managers is needed, and there needs to be follow up. One poster noted they are starting a service BDC. I think that is a great idea as advisors time is being taken up by all they do. Now, the warranty portion. In a year filled with recalls, warranty could account for some of that. The disturbing part is, how much warranty up sell is really going on out there? I would hope little to none, but reality may be different in some stores. We all know that warranty is much less than retail, so every hour and every part that is warranty not only causes a loss of retail, but it replaces it at a much loser level. I would love to see a measurement of truly declined repairs vs. recommendations. Not just items on the RO or inspection sheet, but actually explained to the customer and declined. I think it would show that the majority of additional, repair work is being noted there and the advisors hope the customer see's it and sells it to themselves. So there is no simple answer Denim, it falls into several buckets in my opinion,
Stephen Carroll Jr
Its a combination of things for sure - lost retention #1 - especially for out of warranty customers for sure - but also - poor marketing - look at aftermarket web sites vs a dealers service web site - most dealers still focusing on coupons and reminders only - a lot of OEM's paying for maintenance now ( i have a Chevy and Toyota store - they pay for 2 & 3 years respectively - btw those RO's go on the financial state was warranty work - another reason why warranty up volume up ! ) - poor car sales nationally starting with recession years of 2008 .. less units in operation - OEM's focus ( and a lot of dealers too ) on leasing - customers do not tend to maintain their vehicles as well when leasing ( my Chevy store - over 50% leasing / Toyota over 55% leasing / My Nissan store is over 70% leasing ! ) we are focusing on three (3) things - - huge focus on Express iService n all 3 stores - creating an all new Certified Express Web Site - starting a dedicated service BDC
Mark Miller
I think Stephen brought up a very good point there, web site marketing. When you go to most franchise dealer websites, service appears as an after thought. Independent shops ONLY do service so that is their focus. Leasing is another good point. If you have a 3 year lease, there is little chance of any repair dollars being spent. Then upon lease return, if that car is sold through an independent used car dealer there is little chance that new owner will return to a dealer, they already showed there is no loyalty as they bought it from an independent used car dealer. All of Stephens points are very valid, and I think a dedicated service BDC with trained people on the phones can only help with CSI and customers returning for those recommended repairs.
Denim Simkins
Great points Stephen, Thank you. In regards to pre paid maintenance by the OEM. Have you heard any of the analytics from the OEM in how that is helping retaining the customer and leading to the next purchase? We all know that if the customers comes in (X) amount of times we are more likely to retain them as a customer and sell them their next vehicle. Express service is the key! A good one can really elevate your fixed profits!!!
mark rask
It is a combination.....warranties are also a lot longer than they used to be

Featured Masters

No members found

CRM - Fixed Ops Products

100%  Recommended Recom'd 90 Ratings
Company: ELEAD1ONE
100%  Recommended Recom'd 25 Ratings
88%  Recommended Recom'd 9 Ratings
Company: DealerSocket
99%  Recommended Recom'd 163 Ratings
Company: ELEAD1ONE

 Rate a Vendor Give feedback in three quick steps

Select a Vendor & Product
Can’t find what you're looking for?
Add a Vendor  or  Add a Product