Car sales have taken a beating in the past six weeks. April sales figures aren’t in yet, but it’s safe to estimate that they remain at least halved compared to the same time frame last year, and probably a little worse. But with states starting to loosen COVID-19 restrictions, sales are sure to rebound in the next few months.
What does that have to do with fixed operations? Actually, the service and parts departments can play a huge role in the recovery effort for the sales department. Here’s how.
Yes, referrals. Depending on who you ask, sales leads that convert to delivered vehicles run from $200 to $600, occasionally more. A referral from the service department costs the dealership almost nothing. Someone like a service advisor has opportunities to refer from a few different sources. It may be customers who decline maintenance because they aren’t keeping their car, or it could be a client who always wants the latest and greatest. And of course, friends and family are always a referral source.
A spiff for referrals is always a good idea for staff buy-in. And as you might expect, the more referrals you pay out, the more referral customers you’ll be getting in.
Used cars coming in are consistently a wildcard, especially if they are trade-ins. The costs to recondition them were always a ‘blank check’ of sorts for the service department, so long as the car was still profitable. However, no one truly knows how hard the used car values will be hit due to the coronavirus. As much as it’s the sales manager’s responsibility to appraise cars well, the service department can do their part to keep reconditioning costs low.
Don’t trim the important things, obviously. Cars need brakes and tires, leaks need to be fixed. But consider whether some of the pre-emptive maintenance is better left undone right now. Your store may also want to consider a temporary labor and parts discount for used cars until the recovery is well under way.
New car incentives will be around for a long time it seems, driving the new car market back to full capacity. That’s going to mean truckloads of steel arriving on the lot – vehicles that can only be sold and rolled once they’ve been PDI’d.
It might not seem like a big deal. Just sell the car with the plastic still on, right? But it does not show well when the salesperson has to unwrap the car, take it for fuel, set the radio stations, and put wheel covers on while the customer paces around the lot.
Stay on top of pre-delivery inspections. It’s work for technicians and if there’s a backlog, it should be easy to rally a team to do a little catch-up on a Saturday. Having presentable new cars will help drive up the sales team’s effectiveness.
These aren’t new principles. It’s a team approach. While one part of the team is suffering, the others can help support them along.