Most dealers I know spend around $30, or more, per lead to drive more sales customers into the store. In many cases these leads contain little information that is actually useful to help close the customer. And, not all the information is accurate – perhaps the email is good but the phone number is not. It’s no surprise that closing ratios hover nationally at around 8-12% for these leads.
Yet there is a rich source of superior quality leads in the dealership every day that many dealers overlook. Ups in the service drive far exceed those in the front end of the dealership. And, as many of these are already your customers, all the data you need is at your fingertips to see exactly where these customers are on their journey. Your CRM and DMS contain a wealth of information that could be used to identify prime candidates for a service to sales hand off. You have more data on a service customer than you would ever get from any third party lead provider – it’s sitting there begging to be evaluated and used by service. Yet, rarely are service advisors motivated to turn over a service customer with a large RO to sales. Service advisors get paid on the RO — not if that customer buys a car and the repairs never take place.
Used car managers, at the very least, should be drooling over the list of service appointments on a daily basis. These service customers are essentially bringing a private auction into your dealership with front-line ready cars — and the best part is there is only one bidder!
With dealerships competing for prime vehicles at auction, it makes sense to try and capitalize on the desirable units that are daily coming into the dealership through the service drive. Even if you have to stretch a little on the offer to the consumer, you will save hundreds, if not thousands of dollars, through having no competition for the unit. And let’s not forget the savings in transport costs from the auction. This can only translate into higher front end gross when the unit is retailed.
There are many great solutions out there to assist in identifying customers in equity positions. Some CRMs will do that for you. Regardless, if the customer bought the vehicle from your dealership, chances are that you have a pretty good idea what they owe on their vehicle. This knowledge should enable you to identify prime candidates for a service to sales hand-off.
However, do take care with your approach and don’t be overly aggressive in service. It is pretty easy to irritate a customer who then may decide not to return simply because every time they come for service you try to sell them a new car. Keeping solid notes in the CRM can assist a used car manager or salesperson in identifying who has and who has not been previously approached. Any service to sales hand-off should be done with a smooth, consultative and soft-sell manner. The customer should not feel pressured but rather feel as if the dealership is simply trying to help them.
Consider offering spiffs and train your advisors on when they should get sales involved. Such as when a customer is about to be presented with a repair bill that is higher than the vehicle is worth. Service managers should also assist used car managers in identifying potential situations where high repair bills may occur and it’s advantageous to present a sales proposal to those customers.
Instead of spending thousands of dollars on leads that you may need to call 10 times and still never get a response, consider that service customer standing right in front of you. It’s a well-known fact that it’s a huge challenge to get those sales customers back in – statistics show that somewhere around 70% of customers do not return to their place of purchase for service. Then there are those customers already coming in for service – You should be able to contact them 100 percent of the time — and the best part is, it won’t cost you a dime.
Author: Tony Orlando
Tony Orlando is Vice President, Partner Development at Confident Financial Solutions (CFS), http://lift.mycfsapp.com, a leading developer of high quality financial solutions for automotive service centers and their customers. He has more than 15 years of automotive retail, OEM and 3rd party lead provider experience; 2 years dealership sales and service experience; and 13 years with both import and domestic OEMs. He spent 3 years with TrueCar, cultivating its business in the Southwest states, and maintains relationship with over 600 franchised automotive dealers and industry leaders.