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Jared Hamilton
From: Jared Hamilton
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Jessica Russell

Jessica Russell Dealer Services Manager

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From we need more customers
To understanding that you have enough existing customers to make you a small fortune but you keep ignoring them in the pursuit of more prospects to replace the customers that are leaving.
 
Today’s existing customer is more important than ever and dealership survival going forward will be determined on how well your dealership understands and capitalizes on its existing customers. A prospect becomes a potential loyal service customer when they purchase a vehicle or maintenance service from your dealership. A dealership that sells one hundred new and fifty used vehicles of their brand per month is generating one hundred and fifty potential service customers per month, however the sales department mostly ignores that fact and does little if anything to insure that first critical service visit. Less than 40% of your vehicle buyers voluntarily visit your service department ever including warranty. After five years most of that 40% has found a new service vendor and left you with less than 15% of them.
 
You can have the latest customer contact technology on the planet, but without a relational reason for these customers to use your service department most of this one hundred and fifty are going to your competition, mostly because they did not feel their salesperson or the dealership really desired their service business even though you told them they need to change their oil and the first one would be free.
 
Now, really how many of these one hundred and fifty even knew that you serviced vehicles and that they needed to service with you. How many knew they had a responsibility to maintain that vehicle and what those requirements were. How many actually were introduced to anyone in service so they could feel connected. How many had that critical first service visit established, set, and recorded where accurate and timely reminders along with personal follow up could occur. 
 
Every new and like brand used vehicle buyer should receive a thorough orientation of the service process along with a professional introduction to their service advisor at the time of delivery, but I know you can’t do that because the manufacturer has convinced you that you need to get them out of there in a nano second to “get” a good CSI score. Well go spend that CSI score. Actually you can have both, more service revenue and better CSI. You can convert 85% of these buyers to your service customers and earn great CSI with the same process.
 
Do realize that the gross profit potential over the ownership cycle of each new and like brand used vehicle that your sales department sells will be three to five times your average sales gross including F&I. Question is will it be your dealership earning that gross profit or one of the seven or eight competitors they pass on the way to your dealership. And another thing, more than 70% of the customers that service with you will give you a chance to sell them another vehicle.
 
You could have plenty of customers spending plenty of money in your service department and giving your dealership a chance to sell them another vehicle while earning their referrals from family and friends if you would just adjust that dial. Every new and like brand used buyer should have a chance to become a loyal service customer and every active service customers should feel their advisor wants them to return by setting a reservation for their maintenance service. You need an effective plan to reach the dealership’s inactive customers, and you need to market to all the prospects in the dealerships UIO.
 
For long-term survivability and profitability, especially in the turbulent markets expected, every dealership must earn and maintain a score of 200. Dealerships must convert 75% of vehicle buyers to service customers, retain 75% of all service customers the first 24 months, and retain 50% of vehicle purchasers as service customers for 36 months.    
 
If you won’t or can’t do that profits and survival will be tough if not impossible. If you need help earning and maintaining that 200 score we know how and we can get you there and probably for a lot less than you think or you are spending now without these results.  
 
Tracy Stamper
What a great post, thanks! Check out our blog regarding understanding the service customer that goes along with your post http://www.fullcirclesolutions.com/blog/understanding-the-service-customer/

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