If your service department makes the majority of its revenue fixing broken cars, then get ready for massive layoffs and a huge downsizing. If your business plan is heavily dependent on warranty revenue and customer-pay repair work, then for your service department it’s “Game Over.”
If your traffic count on the service drive is based on your customers having “car trouble,” then prepare yourself for some slow days ahead. If your service advisors are simply write-up-what-comes-in-the-door-and-hope-for-the-best guys, then they need to be prepared for much smaller paychecks…and the techs should only expect to flag 30 hours a week.
Here’s why: Earlier this year, J.D. Power and Associates released its 2012 US Vehicle Dependability Study. The bottom line is that modern automobiles are more reliable and don’t break down as often as they used to.
For the study, JDPA surveyed consumers after three years of vehicle ownership. Therefore, the 2012 study represents cars purchased in 2009. In other words, if something was going to go wrong, it would have gone wrong by now.
Dependability is measured according to problems per 100 vehicles (PP100). In 2009, there were 171 problems per vehicle. In 2012 it has dropped to 132 (see graph). That’s a 22% reduction in reasons to show up on the service drive, which is alarming, if the only time your customers come to your service department is when something breaks.
John Tews, director of media relations for JDPA, said the PP100 has been trending downward for several years. “This trend explains, in part, why consumers are holding on to their vehicles longer,” Tews observed.
Tews is right. The average age of cars on the road is over 10.5 years old. Therefore, the consumer mindset is easy to understand: they made a significant investment in a vehicle that is safe, reliable, and has had very few problems… might as well hold on to it for a few more years.
But, what about the service department…since repair work is declining, how will you make up the lost revenue and labor hours? How will you avoid some of the dire predictions that I mentioned earlier? Preventive maintenance. No matter how sophisticated and dependable they are, mechanical things will always need maintenance. Tires have to be rotated, wipers have to be replaced, throttle plates get gummy, transmission fluid wears out, belts and hoses deteriorate, vital fluids have to be flushed out and replaced… and on and on.
In fact, – and this is the most important point – vehicle reliability is dependenton preventive maintenance! Engines aren’t very dependable if you never change the oil, power steering systems will fail if you don’t replace the fluid and cooling systems will corrode and leak if neglected antifreeze becomes acidic.
In this era of safe, dependable vehicles, it is imperative that your fixed ops team shifts their focus from repair work to preventive maintenance. Your survival depends on it and your customers deserve it. Preventive maintenance is a winning proposition for everyone; your customers save money and your shop makes money – it’s a beautiful thing.
Making a paradigm shift to preventive maintenance is an attainable goal for your dealership…you can do this.
Here are the action points to get you started:
(1) I will be leading a fixed operations workshop at the NADA Convention, February 8-11, 2013 in Orlando. My topic will be “A Multi-point Inspection Process that Really Works!”
My workshop schedule is as follows:
Friday, Feb. 8 12:15 -1:30 pm
Saturday, Feb. 9 10:30 – 11:45 am
Monday, Feb. 11 10:30 – 11:45 am
I hope you’ll put this workshop on your schedule while you’re at the convention. I’d love to have the chance to meet you face-to-face.
(2) My February 2013 Dealer magazine article will address the same topic and I’ll use a couple of case studies to highlight the results of a properly executed Multi-point Inspection.
(3) Additionally, I’ll be leading a free live webinar March 13, 2013, where I will recap the key points of the process and have an interactive question and answer session.
So that’s three major opportunities you have to get everyone on your service team up to speed on a great customer retention and profitability strategy. Next year, nothing will jump-start your preventative maintenance sales faster than a Multi-point Inspection process that is implemented and sustained properly. E-mail me firstname.lastname@example.org if you want additional information on these training opportunities.
On a personal note, as we close out another year, I want to thank you for all the e-mails and phone calls throughout 2012. Your feedback has been so positive and encouraging and I really appreciate it. I hope you and your family have a wonderful Christmas and a blessed New Year.