It’s no secret that automotive dealerships universally are dealing with shrinking customer counts in service and parts. Not only has the sudden and significant downturn in new unit sales impacted this figure, but the fact that vehicles only need servicing a couple times a year has exacerbated the situation even more. These facts create a relatively simple management choice of “let it happen” or “make it happen.” If a dealer’s market share is currently 35%, a common average, then it’s simply 35% of less, and by the national calculations it will be 35% of a heckuva lot less in the coming two years.
Next time you motor to work (I assume you work since you read this magazine), take a moment to absorb the massive amount of vehicles you are constantly surrounded by on a typical American highway. In every city and large town, the highways are jammed with tires and sheet metal bounding about in a parade-like march to the same locations every day. How many of these highway congestants (I made that up) use dealer service? Obviously, Clouseau, not enough.
Since there are as many as 280 million cars and trucks available for movement at any time on our highways, it is an enormous market. Some three-fourths of this group are in the hands of second-, third-, and fourth-title holders who never darken the doors of dealerships, so dealers are confined to a much smaller first-owner market. And frankly only about one-third of that. Ouch. Running the calcs on those figures show that of the 280million available, only some 30 million vehicle owners are dealership oriented, give or take a million.
That being said, the dark side (competition) has managed to attract, steal, or inherit some 250million vehicles. Yikes.
This obviously begs the question, “Can dealers attract, steal, or inherit them back?” Or is it too late to permeate the hardened hearts of vehicle landlords, who have abandoned the very creators of their transportation (that would be you)?
Yep, nope, maybe
As the world turns, I have good news and bad news. The good news is that just about every vehicle entering a service drive has a sister/brother vehicle resting at home. The bad news is that it is being serviced elsewhere, likely by an adversary. Considering that dealer service personnel have established a respectable relationship with the owner of a vehicle already in the drive (OK, most of them), these same personnel can snatch that lost income simply by asking for the business.
Since we have been conducting The Garage workshops for almost a year now, some interesting results are coming in from attendees in that regard. The overwhelming verdict is that simply asking for the “other” business from the current loyal customer base is a hit. In fact, the growth in service volume from this simple no-cost practice has been a surprise to everyone, including me.
I have received financials showing an increase of “other” business, which is now making up as much as 20% of the total service and parts volume. This increase has been generated from the ASMs simply telling customers that the shop was capable of maintaining any type of vehicle, and then requesting the customers– “other” business. The verdict is that happy dealership consumers are responding positively when approached for all their maintenance and repair business, especially by a competent service professional they have learned to trust.
No way, yes way
How about this shocker? I now have sales departments getting into this action. Face it; showroom traffic has diminished considerably too. Salespeople are hungry to talk to prospective customers and they need a plausible reason to make a valid contact besides the infamous, “Yo, hear about our sale, bro?” Using their own contact list, they have a legitimate reason to have a meaty conversation about The Garage, and the fact that the dealership is servicing all makes and models. This call also opens the door for making a right-now service appointment, as well conversations about a potential vehicle purchase. Smart service managers spiff the sales guys a fiver ($5) for an actual appointment — worth every nickel.
In fact, if you want one, send me a note at firstname.lastname@example.org (subject line: sales script) and I will send you an effective word track for your sales staff to use in developing more business for service. If you have a great relationship with your current service patrons, you should expect to get up to 30% to utilize your service department for their other vehicles too. That’s no small potatoes from the dark side.