Everyone working on the dealership’s showroom floor understands they are working in a sales organization. Vehicles are attractively positioned on the sales floor to create the proper mood, whether it is luxury and elegance for the high-end import or rugged durability for the heavy-duty pickup or tech-savvy gadgets and software for the digitally-connected crossover. The lighting is perfect, the music is appropriate, the temperature is comfortable; it’s all designed to create an environment conducive for making the sale.
The general sales manager and his co-managers typically spend their day in an elevated area called a sales tower. The folks on the front lot and in the showroom are called sales associates. Their ability to stay employed revolves around how many sales they make per month.
There is a large group of virtual shoppers that are assisted by dealership employees called the internet sales team. There are new car salespeople, used car salespeople, and F&I salespeople.
They have daily sales meetings led by sales managers that teach them sales skills. The “sales culture” is so prevalent that the front of the dealership is even called the sales department. Their sole purpose is selling… and everyone gets it.
With all this emphasis on selling, surely the message has made its way back to fixed ops, right? Sadly, no.
Tony Nolan is one of my heroes. I attended his bootcamp over 20 years ago, and it changed the way I did business. His wisdom and wise council continues to help and guide me through the complexities of the automotive industry.
In December, Tony made a profound statement in an online publication: “If dealers ran their fixed operations using the same practices they use in their variable operations, they would see an,increase in business.” The simplicity of this truth is what makes it so profound!
Dealers run their sales department like a sales department. If they would run their service department like a service sales department, they’d make more money, have higher retention, increase their customer satisfaction, and increase employee morale.
Dealers run their sales department like a sales department. If they would run their service department like a service sales department, they’d make more money!
Here are three quick processes that will help you create a sales culture on your service drive:
- Create a sales production-based pay plan. Don Reed, CEO of DealerPro, says 40% of an advisor’s income should be base salary and 60% should be based on performance. To me, that means if an advisor doesn’t sell service, he will starve. (If a technician doesn’t thoroughly inspect the car and recommend needed maintenance, he’ll starve, too!) If 60% of a person’s pay is based on production, they’ll produce— or they’ll have to quit and go to work somewhere that pays them an hourly wage with no incentive or pressure to produce. “Do you want fries with that?”
- Service managers must require advisors and techs to produce. If service advisors aren’t selling maintenance services, then who’s to blame? Not the advisors—the managers! The service manager must see that the advisors are trained to sell. He must see that they are coached and mentored. He must see that they know how to overcome objections. He must see that they practice, drill, and rehearse their sales presentation. This training and coaching can be outsourced. There are online courses, consultants can be retained, and vendors that can come alongside to help.
Accountability and leadership, on the other hand, can’t be outsourced. If an advisor that has been trained, coached, and mentored in the art of selling still refuses to sell, then he must swiftly be replaced. And yes, you will find a replacement. Every expert I know says advisors need not have an automotive background to be successful. Maybe that friendly and hardworking waitress at the local diner is your next advisor. She doesn’t have any bad habits, she doesn’t know what won’t work, and she knows how to up-sell dessert! “You do want a scoop of ice cream on that hot slice of apple pie, right?”
3. Impress upon your techs and advisors how important vehicle maintenance is to vehicle owners. Consumers must maintain their cars. Let’s diagram it like this:
- New Car (A want)
- Used Car (A need)
- Service (A must!)
Let me explain: No one has to buy a new car (although last year, almost 17 million people wanted to buy one). Used cars could also be a want, though most would classify it in the “need” category. But service is a must. People must have reliable transportation in order to live their lives. People must service their cars in order to keep them reliable. Vehicle owners don’t know what maintenance services to ask for, but they know their car must be maintained. Keep preaching this truth to your advisors and technicians. Selling maintenance is the right thing to do.
In conclusion, let me give you one case study of success. One of my clients is a metro Hyundai store that embraced this service “sales culture” philosophy. In 2012, they sold $190,000 in fluid maintenance services. It grew to $340,000 in 2013, and last year it doubled to $700,000. Frankly, this year I think they’ll top $1 million in fluid maintenance services. Wow!
So what are they doing? The service manager has a service sales meeting with his advisors every week. They talk about all the things I have mentioned in this article and discuss how to implement them in their shop. They are running fixed ops like variable ops—what a novel idea!