On average, dealers capture just half of the necessary service work that needs to be performed on vehicles that come into their service lanes. This is a big leakage point that has a direct impact on service revenue. It also offers tremendous untapped potential.
In addition to acquiring new service customers, it’s important to focus on maximizing service potential from the ones you have. To be clear, I don’t recommend trying to upsell every customer or sell unnecessary repairs. If that’s your strategy, all you’re doing is compounding the problem.
Addressing this leakage point requires knowing why it happens in the first place. In my experience, most customers decline service for the following reasons, in this order:
Trust: I’m not sure if I really need this repair or not, and I don’t know if I can trust you.
Timing: I wasn’t planning to leave my car here today/more than one day, and I need my car.
Affordability: I only budgeted $300 for this repair, and now you’re asking me to pay $750. I don’t have the money right now or I’m not emotionally ready to pay for it.
It’s important to distinguish affordability and budget from price. Most customers coming into your service department know that you’re not the cheapest option in town. When a customer buys into your dealership value proposition, there’s a good chance they won’t go home and shop around to save $50 or even $100.
Think about it. You have a customer who bought into your initial value proposition. They brought their vehicle to your store. They were willing to buy some services from you, but not others. They have a need, even if they don’t realize it. You are prepared to fill this need.
All the ingredients are there for you to capture that business. So, what’s the best way to stop the 50 percent of unsold service repairs from leaving your service department on a daily basis?
Start with electronic multi-point inspections (MPIs). A perennial problem most dealers have with the MPI process is that advisors and techs are compensated only for the work they do, not for doing the inspection. It needs to be ingrained that if they do the inspection, they are paying themselves.
An effective MPI process has five parts to it:
- Identify all the work that needs to be done.
- Have a quality conversation in a timely way with the customer about the recommended services.
- If the customer declines, identify the reason. Is it trust, timing or affordability?
- Offer a solution for the reason. If it’s trust, show visual proof of the repair with photos or videos, if at all possible. If it’s timing, offer a free loaner car. If it’s affordability, offer a payment solution.
- Continue the conversation for the 50 percent of the time when the customer says no.
It seems pretty simple, but communication is not something that registers as a high priority for many service staff. Conveying or relaying information, sure. Communication as in conversations that help to build relationships, not so much.
If you want to continue the conversation with your customers, it’s critical to have a tablet that helps your staff perform the MPI in an effective manner. A tablet can help to identify the work that needs to be done and it can be used to sell the recommendation, preferably with menu options.
The tablet also needs to be integrated with your CRM. I’m guessing that about one-third of dealerships right now use tablets for the MPI process. Yet in most dealerships, those tablets aren’t integrated with the communications system.
One of the most important reasons to capture the data in the tool is so you can use that data effectively downstream. It’s the data that helps you continue the conversation with the customer, which is necessary in order for you to re-capture that 50 percent of unsold service.
This is where most dealers fall down in the MPI process. Lack of continued conversations with customers. With an integrated tool, your CRM will prompt you to email, text or call the customer to remind them to come back in for service.
In your follow up communications, don’t just try to sell your customers. Offer solutions to their objections. Educate them on the importance of having the repair done, whether it’s a safety issue or because it will help to prevent bigger, more expensive problems down the road.
Tablets are more than just tools for capturing data. Their biggest benefit is that they can help your staff communicate, build relationships and overcome objections, so that you can turn unsold service into revenue.
Author: Scot Eisenfelder
Scot Eisenfelder is a 25+ automotive market veteran who has driven innovation across multiple auto sectors. Previously, Scot was Senior Vice President Strategy at AutoNation, responsible for major change initiatives in eCommerce, pricing, IT and creating a blueprint for auto retail transformation and before that served as acting CMO, focused on realigning marketing spending. Before that, Scot led JM Family’s dealer software business and was Senior Vice President Product Management, Strategy and Marketing at Reynolds and Reynolds, leading both companies through value creating sales. Scot is a Board member of Quorum, a public dealer software company. He has an MBA from Wharton School, graduating with distinction and is a Palmer Scholar. He attended Mannheim University in Germany as a Fulbright Scholar and graduated summa cum laude in Economics from Princeton.