Prepare for the Tsunami?

Brad Bossen
Why is all the attention being given the service and parts departments? Every manufacturer's DSPM is visiting the dealership at least weekly. Trade magazines that seldom had much to say about the back of the store, now suddenly write volumes about how customers should be served, follow-up processes on un-sold service, how the telephones should be answered, and shop efficiency. Service and parts managers are having to document and report on everything from the time the first customer appeared on the drive to what flavors of cream are being requested at the coffee bar! Does someone know something you don't? What's causing this sudden interest in Fixed Operations is the realization that employees in these departments "touch" about six times as many customers per day as any other department! Touch, meaning; interaction at the counter, on the telephone, in the Drive, texting and mail. This isn't something new, it's just that EVERY single customer is taking on a whole new value. Each year just after the New Year, departmental financial projections for the next one, two and three years have worked their way up the hierarchy to the manufacturer's desks. This year's the realization that the service and parts business just lost three years of business! When the dealership's new car sales numbers drop the impact of each lost customer has a 36 month impact on the service and parts departments. Follow this: If your dealership's new car sales are reduced by 100 vehicles per month, times twelve months, that's 1200 anticipated vehicles taken out of the service and parts customer base for good. Even if you sold twice as many new cars for the next three years, you can't replace those 1200 customers that would have (potentially) been using the service and parts departments for the next 36 months. Let's continue: Now deduct the normal, annual attrition rate of customers due to relocation, death, sell their car or dissatisfaction with the dealership (about 8%), now the alarms are starting to sound. Don't stop now; Deduct the reduced sales from those good customers who are not servicing their vehicles as often, and refusing any up-sells. New floor mats, wiper blades, cargo nets, tires and even air fresheners and all the other impulse purchases in Parts are just becoming depreciating "dead" inventory. Not gloom and doom. Reality. With the exception of most Fixed Ops managers, there are few dealership decision makers that realize the significant tsunami of lost sales that will be slamming right into the back of the dealership for at least the next three years. In a Sales department, if you have a bad month you realize you missed the sales; their gone. You blow up the big gorilla, run a few Saturday specials, and fire up the sales staff for better sales next month to recoup losses. It doesn't work that way in Fixed Ops. The service and parts departments are dependent on the constant sale of new vehicles to feed their base of customers that will return for warranty service the next 36 months; a perpetual cycle. The only way to replace the lost income is to attract and retain customers from your franchise competitors. Staffing, inventory levels and hours of operation have all been predicated on the this reasonable history of new car sales. Why are we seeing all the interest in Fixed Ops? Because as a dealership you can't afford to lose even one existing service or parts customer. Is it time to rally the computer and marketing gurus for a mass attack? If you haven't already, you're behind! This isn't a problem that will be solved by talking to the service manager about running a couple of ads. There is going to be "pain" involved at every dealership. How much and how painful will depend upon the speed and energy of the Team. It will require an all out, all departments, all skills, everyone's input and every idea. Analyzing and defining your customer data base, refining it, purging it, evaluating prior sales information, segmenting customer buying habits, follow-up and follow-through, mail, email and telephone. New processes and procedures checks and balances to insure that they're followed. All the force and ingenuity that is available needs to be directed to the back of the store, (surprisingly, history will show that a strong Fixed Ops sells cars!) to wage a front on customer retention. Please don't mistake this effort as a "battle"........ It's a WAR! Brad Bossen www.dealerscompass.com

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