Jessica Russell Blog
Total Posts: 7
JR
Performance Management Associates, Inc.
Oct 10, 2010
They are YOUR customers and you can have them or get them back!
When you drive by a Midas, Jiffy Lube, Wal-Mart Service Center, Grease Monkey, Pep Boys, or whatever in your market and see a vehicle that’s your brand, do you ever wonder? Wonder if your dealership sold it… and why is that vehicle not in your service department since it is your make?
Maybe you wonder how New Car Dealers could allow enough of their customers to leave them and flock to all that competition. It is true that 100% of the new vehicles sold in the US have to be sold by or through a Franchised Dealer, right? After five years, NADA states that less than 20% return to the selling dealer for service, especially if the customer is paying.
I know some of them moved, but 80%? No, typically 20 to 25% move away or are sold out of market, however many times there are more moving in than leaving. So again why are they not in your service department? If it is a bit puzzling just ask the sales staff or walk back to service and ask them. They have a list of reasons (trying to be nice) why they are at your competition. In fact many on the sales staff probably outright told them their vehicle and their wallet would be better off over at your competition.
Just think about it for minute and let it sink in. At the time of sale 100% of the new and even the used buyers are your customers. I know they just bought on price or you had the only one like it, right? No, most of them live near your dealership and they liked and trusted “their” salesperson enough to spend thousands of dollars with them. So what happened and why are my customers leaving and going to my competition (by the way you helped put them in business), unless it is warranty or free and sometimes not even when it is free.
Those are your customers and you can have them or get them back. Well maybe not all, but you can have and keep 70% or more of the ones (new and like brand used) you sold and you can keep them coming back longer than typical for a dealership. You can keep them when that vehicle starts getting more miles and requires more $$$ to keep it going and keep it safe.
You know they are keeping them much longer and driving them a lot more than before. The average age of vehicles in the US is now more than 10 years old and US drivers are putting 300 billion more miles on them than they did just ten years ago. That’s great news for you or your competition because the owners of those vehicles are spending more to keep them on the road.
Those are your customers and you can have them or get them back. One other thing, both your sales and service departments have high CSI, right? The sales and service staff probably “gets” the score and both departments are well over 95, right? Therefore your customers are satisfied and that means they will service their vehicles with you, spend more money with you, return to buy more vehicles from you, and refer their family, friends, and co-workers to do the same, right? Unfortunately wrong. After 10 consecutive years of CSI studies showing that overall satisfaction with dealer services continues to increase, customer pay revenue paid to dealership parts and service departments dropped $2 Billion to less than $29 Billion.
So why do your customers continue to leave you and go to the competition when they are truly that satisfied? Has to be our pricing, our hours, new car sales are off, or whatever the staff can come up with as an excuse, not the reality.
Would you agree? Could you use more customers?
2059
JR
Performance Management Associates, Inc.
Oct 10, 2010
They are YOUR customers and you can have them or get them back!
When you drive by a Midas, Jiffy Lube, Wal-Mart Service Center, Grease Monkey, Pep Boys, or whatever in your market and see a vehicle that’s your brand, do you ever wonder? Wonder if your dealership sold it… and why is that vehicle not in your service department since it is your make?
Maybe you wonder how New Car Dealers could allow enough of their customers to leave them and flock to all that competition. It is true that 100% of the new vehicles sold in the US have to be sold by or through a Franchised Dealer, right? After five years, NADA states that less than 20% return to the selling dealer for service, especially if the customer is paying.
I know some of them moved, but 80%? No, typically 20 to 25% move away or are sold out of market, however many times there are more moving in than leaving. So again why are they not in your service department? If it is a bit puzzling just ask the sales staff or walk back to service and ask them. They have a list of reasons (trying to be nice) why they are at your competition. In fact many on the sales staff probably outright told them their vehicle and their wallet would be better off over at your competition.
Just think about it for minute and let it sink in. At the time of sale 100% of the new and even the used buyers are your customers. I know they just bought on price or you had the only one like it, right? No, most of them live near your dealership and they liked and trusted “their” salesperson enough to spend thousands of dollars with them. So what happened and why are my customers leaving and going to my competition (by the way you helped put them in business), unless it is warranty or free and sometimes not even when it is free.
Those are your customers and you can have them or get them back. Well maybe not all, but you can have and keep 70% or more of the ones (new and like brand used) you sold and you can keep them coming back longer than typical for a dealership. You can keep them when that vehicle starts getting more miles and requires more $$$ to keep it going and keep it safe.
You know they are keeping them much longer and driving them a lot more than before. The average age of vehicles in the US is now more than 10 years old and US drivers are putting 300 billion more miles on them than they did just ten years ago. That’s great news for you or your competition because the owners of those vehicles are spending more to keep them on the road.
Those are your customers and you can have them or get them back. One other thing, both your sales and service departments have high CSI, right? The sales and service staff probably “gets” the score and both departments are well over 95, right? Therefore your customers are satisfied and that means they will service their vehicles with you, spend more money with you, return to buy more vehicles from you, and refer their family, friends, and co-workers to do the same, right? Unfortunately wrong. After 10 consecutive years of CSI studies showing that overall satisfaction with dealer services continues to increase, customer pay revenue paid to dealership parts and service departments dropped $2 Billion to less than $29 Billion.
So why do your customers continue to leave you and go to the competition when they are truly that satisfied? Has to be our pricing, our hours, new car sales are off, or whatever the staff can come up with as an excuse, not the reality.
Would you agree? Could you use more customers?
2059
No Comments
JR
Performance Management Associates, Inc.
Jul 7, 2010
Who feels that when dealers allow employees to manipulate, gyp, phony up, or outright cheat to enhance or “get” the CSI score that they are only short-changing or cheating the dealership.
What percent of time do you think customers just “give” the highest rating only to help their salesperson or advisors, and then they just go-away because the experience was unacceptable and all trust was lost?
What percent of dealerships spend more time and energy trying to cheat the CSI System, rather than focusing on TRUE customer satisfaction?
As a "Dealer Coach" we've seen dealerships use all kinds of incentives to try and get a high CSI score, even requesting the customer bring in the survey. We've seen customer information changed or modified to protect the store, hold outs on closing and RO for 30 days or more, etc.
I'm not trying to give out any ideas (it's okay to laugh now!) but, who is brave enough to admit that CSI scores have been driven to insane levels by practices like this?
2091
No Comments
JR
Performance Management Associates, Inc.
Jul 7, 2010
Who feels that when dealers allow employees to manipulate, gyp, phony up, or outright cheat to enhance or “get” the CSI score that they are only short-changing or cheating the dealership.
What percent of time do you think customers just “give” the highest rating only to help their salesperson or advisors, and then they just go-away because the experience was unacceptable and all trust was lost?
What percent of dealerships spend more time and energy trying to cheat the CSI System, rather than focusing on TRUE customer satisfaction?
As a "Dealer Coach" we've seen dealerships use all kinds of incentives to try and get a high CSI score, even requesting the customer bring in the survey. We've seen customer information changed or modified to protect the store, hold outs on closing and RO for 30 days or more, etc.
I'm not trying to give out any ideas (it's okay to laugh now!) but, who is brave enough to admit that CSI scores have been driven to insane levels by practices like this?
2091
No Comments
JR
Performance Management Associates, Inc.
Jun 6, 2010
I love reading blogs. They are an amazing insight to what is going on in the mind of the writer. So, after reading blog after blog I am impressed and ecstatic that everyone seems to be aboard the customer retention train!
Here’s the rub. Everyone (okay, most everyone) would agree that the key to profitability in a dealership is not based on units sold or hours per R.O…it’s based on how many of those sold are retained as customers and refers their friends and family to the dealership. Yet, no one seems to have a real strategy or plan on how to get it.
So, for your consideration I would like to share the following suggestion: You have to implement, measure and monitor a process that is done 100% of the time to get your best customer (the one you just sold a car to or completed service for) to keep coming back! Sounds so simple, right?
Every dealer has had the “rah-rah!” mentality that gets everybody pumped up, or the CRM System that would basically run itself with little engagement. And, most of them would tell you they should’ve just stood in the showroom and threw the money they spent up in the air for all the good it did.
Now, before everyone gets upset, I am a believer in technology. And who doesn’t love a good fist pump during the sales meeting? I just know that when all those great ideas and systems are left up to the employees themselves, it inevitably will fail. This doesn’t mean that you don’t have great guys and gals in your sales and service departments, because let’s be honest, they are the foundation of your dealership. They are the ones that begin to build the relationship with your customer in the first place! It’s just that at the end of the day we’ve all done what we are responsible for. If you were to ask one of your salespeople or service advisors what they are responsible for, they will probably say: “Sell the Customer,” “Close the Deal,” “Up Sell!” or something along those lines.
What I’m talking about is accountability. Being accountable for the customer…and what happens. Continuing and building on the relationship they have started with the customer. Transferring the trust they have built to others at the dealership (Service Retention, anyone?) So, who holds them accountable to do this? Your CRM, your Desk Managers? Don’t they have enough “responsibilities?”
My point is this. If you want real customer retention, and the Millions of Dollars that come along with it, you have to consistently measure, monitor and maintain the right processes and systems. And, these must be implemented and part of the dealership culture. You cannot do this by dictating it (“They’ll do it because I said so!), force of personality or a “buy-in.” It has to be measured and coached to perfection.
If you would like to see the Millions of Dollars that exist for your dealership, I invite you to email me to look at a spreadsheet and plug in YOUR dealerships numbers. When you feel like screaming “SHOW ME THE MONEY!!” call or e-mail me and I guarantee you I can!
1242
No Comments
JR
Performance Management Associates, Inc.
Jun 6, 2010
I love reading blogs. They are an amazing insight to what is going on in the mind of the writer. So, after reading blog after blog I am impressed and ecstatic that everyone seems to be aboard the customer retention train!
Here’s the rub. Everyone (okay, most everyone) would agree that the key to profitability in a dealership is not based on units sold or hours per R.O…it’s based on how many of those sold are retained as customers and refers their friends and family to the dealership. Yet, no one seems to have a real strategy or plan on how to get it.
So, for your consideration I would like to share the following suggestion: You have to implement, measure and monitor a process that is done 100% of the time to get your best customer (the one you just sold a car to or completed service for) to keep coming back! Sounds so simple, right?
Every dealer has had the “rah-rah!” mentality that gets everybody pumped up, or the CRM System that would basically run itself with little engagement. And, most of them would tell you they should’ve just stood in the showroom and threw the money they spent up in the air for all the good it did.
Now, before everyone gets upset, I am a believer in technology. And who doesn’t love a good fist pump during the sales meeting? I just know that when all those great ideas and systems are left up to the employees themselves, it inevitably will fail. This doesn’t mean that you don’t have great guys and gals in your sales and service departments, because let’s be honest, they are the foundation of your dealership. They are the ones that begin to build the relationship with your customer in the first place! It’s just that at the end of the day we’ve all done what we are responsible for. If you were to ask one of your salespeople or service advisors what they are responsible for, they will probably say: “Sell the Customer,” “Close the Deal,” “Up Sell!” or something along those lines.
What I’m talking about is accountability. Being accountable for the customer…and what happens. Continuing and building on the relationship they have started with the customer. Transferring the trust they have built to others at the dealership (Service Retention, anyone?) So, who holds them accountable to do this? Your CRM, your Desk Managers? Don’t they have enough “responsibilities?”
My point is this. If you want real customer retention, and the Millions of Dollars that come along with it, you have to consistently measure, monitor and maintain the right processes and systems. And, these must be implemented and part of the dealership culture. You cannot do this by dictating it (“They’ll do it because I said so!), force of personality or a “buy-in.” It has to be measured and coached to perfection.
If you would like to see the Millions of Dollars that exist for your dealership, I invite you to email me to look at a spreadsheet and plug in YOUR dealerships numbers. When you feel like screaming “SHOW ME THE MONEY!!” call or e-mail me and I guarantee you I can!
1242
No Comments
EB
Performance Management Associates, Inc
Jun 6, 2010
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.
1846
No Comments
EB
Performance Management Associates, Inc
Jun 6, 2010
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.
1846
No Comments
EB
Performance Management Associates, Inc
Jun 6, 2010
From “as vehicle sales go, so goes service” mentality, to believing that you own 100% of that business and you can capture more of it and grow service regardless of what sales is doing.
From focusing exclusively on generating prospects to replace the customers that are leaving
To realizing that nothing is more important or profitable to a dealership than knowing and working its current customers.
From allowing 84% of our customers to leave and go to the competition, to implementing and requiring processes that get them stuck on you and coming back again and again.
From less than 40% of vehicle buyers initiating any kind of visit to our service departments to requiring that all vehicle buyers receive an orientation at delivery and have that critical first service appointment established with your dealership.
From being only transactional (If I cut another $2000 will you take it home today?) to realizing that at least 50% of your prospects and customers are relational (Do I like you and can I trust you?) and that your sales and service staffs have little idea how to recognize them or treat them. And so on…..
Today, dealerships are faced with extreme competition and finding it problematic maintaining margins and finding it impossible to grow margins because dealerships typically develop customer relationships based solely on price with little that differentiates them.
What’s the solution? Dealerships have to learn to have some relationship with customers that, to some degree, overrides price- or dealerships will slowly, then suddenly go broke as is happening to far too many of them today. The success of a dealership today depends simply on its understanding of psychology. How each individual sales or service employee connects with customers and how each individual employee connects with the dealership.
Dealerships won’t survive continuing to focus only on transactional buyers and allowing that culture to dictate how they look at their customer base and the opportunities inherent in it. Twenty years or so ago it was so easy when sales got slow, just put up a big tent, set up a prize box, get the clowns or the bands, fire up the grill, invite the radio station in for a remote, and we could easily sell thirty or forty cars on a Saturday. Ten years ago that didn’t work so well and today it just doesn’t work at all. Okay so it’s the weather right? No it’s delivering the same old message to a new market filled with a new kind of shopper. It’s not just those transactional shoppers that believe they already know everything to make an informed decision, except the price. It’s also those transactional shoppers that are well aware they don’t know enough to make an informed decision and are shopping for an adviser they can trust not to take advantage of them.
Dealerships can no longer work only in the transactional dimension. They must learn to recognize the relational shopper and understand how to do business with them. Its time to adjust that dial from all transactional and accept that 50% of your customers are relational and that both relational and transactional customers shop in both modes. You must recognize both and adjust to both or continue to loose 84% of your customer base to your competition.
In just thirty-five short years how could the industry go from nearly thirty thousand mostly profitable dealers to less than twenty thousand today? How could the dealer body that sold 100% of the 240,000,000 vehicles on US Highways today give 84% of that business away and allow 400,000 service venues that didn’t exist thirty years ago to be flourishing off dealer customer bases today? How?
1151
No Comments
EB
Performance Management Associates, Inc
Jun 6, 2010
From “as vehicle sales go, so goes service” mentality, to believing that you own 100% of that business and you can capture more of it and grow service regardless of what sales is doing.
From focusing exclusively on generating prospects to replace the customers that are leaving
To realizing that nothing is more important or profitable to a dealership than knowing and working its current customers.
From allowing 84% of our customers to leave and go to the competition, to implementing and requiring processes that get them stuck on you and coming back again and again.
From less than 40% of vehicle buyers initiating any kind of visit to our service departments to requiring that all vehicle buyers receive an orientation at delivery and have that critical first service appointment established with your dealership.
From being only transactional (If I cut another $2000 will you take it home today?) to realizing that at least 50% of your prospects and customers are relational (Do I like you and can I trust you?) and that your sales and service staffs have little idea how to recognize them or treat them. And so on…..
Today, dealerships are faced with extreme competition and finding it problematic maintaining margins and finding it impossible to grow margins because dealerships typically develop customer relationships based solely on price with little that differentiates them.
What’s the solution? Dealerships have to learn to have some relationship with customers that, to some degree, overrides price- or dealerships will slowly, then suddenly go broke as is happening to far too many of them today. The success of a dealership today depends simply on its understanding of psychology. How each individual sales or service employee connects with customers and how each individual employee connects with the dealership.
Dealerships won’t survive continuing to focus only on transactional buyers and allowing that culture to dictate how they look at their customer base and the opportunities inherent in it. Twenty years or so ago it was so easy when sales got slow, just put up a big tent, set up a prize box, get the clowns or the bands, fire up the grill, invite the radio station in for a remote, and we could easily sell thirty or forty cars on a Saturday. Ten years ago that didn’t work so well and today it just doesn’t work at all. Okay so it’s the weather right? No it’s delivering the same old message to a new market filled with a new kind of shopper. It’s not just those transactional shoppers that believe they already know everything to make an informed decision, except the price. It’s also those transactional shoppers that are well aware they don’t know enough to make an informed decision and are shopping for an adviser they can trust not to take advantage of them.
Dealerships can no longer work only in the transactional dimension. They must learn to recognize the relational shopper and understand how to do business with them. Its time to adjust that dial from all transactional and accept that 50% of your customers are relational and that both relational and transactional customers shop in both modes. You must recognize both and adjust to both or continue to loose 84% of your customer base to your competition.
In just thirty-five short years how could the industry go from nearly thirty thousand mostly profitable dealers to less than twenty thousand today? How could the dealer body that sold 100% of the 240,000,000 vehicles on US Highways today give 84% of that business away and allow 400,000 service venues that didn’t exist thirty years ago to be flourishing off dealer customer bases today? How?
1151
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