Happy New Year! I hope you enjoyed a relaxing time with family and friends over Christmas and had a few days to recharge your batteries. Service directors will need to be at the top of their game in 2018 because dealers will be depending on fixed ops more than ever to keep the dealership profitable.
The prognosticators are saying there will be one million fewer cars sold in 2018, so parts and service will be called on to pick up the slack. (Savvy dealers already know that fixed ops is the backbone of profitability, but there’s nothing like declining new car sales projections to cause everyone to get religion about the cash cow we call the service department.)
There are two critical opportunities you must introduce new and used car buyers to your service department: The first, of course, happens at the time of vehicle delivery when the salesman brings the buyer out on the service lane to meet the service advisor. The second occurs at the new and used car buyers’ clinic.
The following is a true story that happened last summer. Dewey and I have been friends for over 30 years, so he knows what I do for a living and he sent me a lengthy email explaining his experience. Everything in italics is in Dewey’s own words.
My wife and I were looking for a good, used, larger vehicle to better meet the needs of our family. However, due to some incredible incentives, we decided to purchase a new vehicle instead. The overall buying experience was very good and very pleasant! Our salesman was just super and the whole experience from his greeting to the test drive to meeting the new car manager to the finance presentation was well done.
A few days later, we got a letter congratulating us on our purchase followed by an email and call inviting us to their customer appreciation event for new car buyers. My wife and I accepted the invitation.
There were about 50 people there, some with families, but at least 35 of us were “new car buyers.” They had barbecue set out and lots of tables set up on the show room floor. After checking in, the first person I met from the dealership was a man that was very busy setting up and serving drinks and very hastily moving around. I said, “Hi, is Vinny, my salesman, going to be here tonight?” I got a very quick and disconnected response of, “I don’t know anybody by that name, nor do I know any of the salesmen.” Wow, that was not a good first impression at all and actually, it was rude. He had an employee shirt on, but there was not a greeting of “Hello, I’m glad you’re here!” And then to not know any of the salesmen! I seriously thought he was a low-level employee that got the job of setting this all up.
When the meeting started, to my surprise, the rude guy turned out to be the SERVICE DIRECTOR! He ran the entire meeting. I was not impressed and already thinking, “this is not the way to retain new customers.”
He handed out an agenda for the meeting…one he said would only last about 30 minutes. What a joke! He basically just read the agenda. My impression was that he did not want to be there or doing the meeting. The agenda said we would meet several employees, but as it turned out, just one service advisor showed up at the end and there were no parts people, not a single salesman, no techs, and no upper management. He did mention that the general sales manager was there, but he was way too busy to come out and say hi. The service director pointed at him in his office and he didn’t even look up, he just waved. Are you kidding me?
The service director went on to brag about how great they were: number one in sales and service, service experience award winner, fixed right first award winner, how large they are (average 100 cars a day) …yet no other employee, other than the one late-arriving service advisor, was present to say thank you or be up front.
The service director also bragged about their waiting area and the fact that they had 96 different flavors of coffee in their machine for their guests. Yep, that’s why I bought my van there and would want to have it serviced there! (Sarcasm).
The service director briefly discussed oil changes, and I was really surprised when he downplayed the importance of the “oil change due” reminder. The only maintenance he discussed was an oil change and his attitude was like it was no big deal.
Thankfully the meeting ended and it was time to hand out the door prizes! One person had a question about their home link garage system not working and that led to another 30 minutes of questions and now the service director was getting impatient. Clearly, he did not want to be there and finally said, “I will take more questions individually, let’s do the door prizes and get you all out of here!” By this time, I knew I would NEVER be bringing my van here for service! If I have warranty issues I’ll go somewhere else for service and probably to a very good independent shop to have oil changes and routine maintenance performed.
I left without saying anything. I love my new van, but I will never bring it to him for service. I’m confident that I will find a much more appreciative and thankful shop or dealership who truly wants to have me as their customer for life.
Wow! What an ugly story. Talk about a textbook example of how to chase customers away!
Let’s unpack this just a little bit. The attendees at the meeting had purchased 35 new cars, so that means they had spent almost $1 million. At 5% the dealership grossed roughly $50,000 on these 35 cars.
The average vehicle owner spends about $600 annually for maintenance, so for 35 vehicles over a 10-year period, that’s over $200,000 revenue and $120,000 gross for fixed ops. That’s how much these customers will spend somewhere…but, if they respond like Dewey, it likely won’t be at this dealership! No wonder dealerships only get about 14% of the annual customer-pay maintenance and repair revenue. AND just think how many future new and used car sales will be lost due to a lack of loyalty to the dealership.
So, if other attendees felt like Dewey, then here’s 35 precious people that were royally turned off by an unfriendly, impatient service director and a team of managers that couldn’t be bothered to show up and say thank you.
The leadership of this dealership needs to remember that you sell cars to make customers so you can sell maintenance services to make money! They apparently believe that once they’ve sold someone a car that they’re done. What a costly mistake.
Here are some action points:
- Teach your sales, service, and management team how to do a new car clinic that keeps the customers loyal to the dealership!
- Teach them to make the customer feel welcome and appreciated. The employees who host the customer appreciation clinic need to be the epitome of graciousness, warmth, and hospitality.
- Teach your management team that they must be present, engaged, and have their game face on. (No waving from the office without looking up. Wow, how unprofessional and utterly clueless.)
In closing, you might want to consider creating an incentive for the sales person who has the highest sales-to-attendance percentage. This will encourage them to phone, text, and send email reminders encouraging their customers to attend. Double the incentive if the sales person shows up also.
The new car buyers’ clinic matters. It’s a big deal. It will get your customers started out on the right path to many years of driving pleasure. It keeps them loyal to the dealership and it makes you lots of money.
Happy sales to you.
Author: Charlie Polston
Charlie Polston is an Automotive Customer Retention and Profitability Consultant with BG Products, Inc. Charlie has been with BG’s Fixed Operations Division for over 34 years.