It’s the most wonderful time of the year—unless you’re in the automotive service business! Everyone’s mind is on mistletoe, shopping, office parties, Mary, Joseph, and Baby Jesus, and presents under the tree—but not automotive maintenance.
There’s no need for your shop efficiency, effective labor rate, or hours per RO to decline in December; but you may have to get a little creative to keep your traffic counts up.
- How about having Ladies’ Day with free manicures while waiting for an oil change and tire rotation?
- Or you could promote a “stress-free Christmas” by bringing in a massage specialist for a day.
- Maybe you could invite your customers to bring in canned goods for your local food bank and give them a $5 Starbucks gift card when they purchase an oil change and detail service package.
- If you want to appeal to a customer’s need for safety and reliability, you might want to offer a free winterization check-up with each oil change in December.
The intent is to keep the service bays full, to get cars in the shop so your techs can get their eyes and their hands on them! The goal is a good inspection that leads to increased maintenance sales opportunities…and, most importantly, increased safety and reliability for vehicle owners. (Nothing would be worse than having car trouble while heading over the river and through the woods to grandma’s house on a snowy Christmas Eve.)
You’ll notice that none of my suggestions include offering a discount or a cheap oil change. Why? Because that’s not what people want. They want to a good experience and they want to deal with someone they trust. (See graphic.)
According to Bill Thompson, president of IMR, Inc., 40% of consumers choose an oil change provider based on having a good prior experience and 17% base their choice on the trustworthiness of the shop.
The IMR, Inc. Continuing Consumer Automotive Maintenance Study went on to show that only 3% of consumers choose an oil change provider based on cheap price. This fact will surely surprise a lot of service managers and advisors who think the only way to have a robust oil change business is to give it away or have some type of stupid-cheap pricing structure. Granted this marketing strategy sorta works for some service departments who may see a temporary spike in car counts, but it always comes with an overall loss in profitability.
In fact, I spoke to a domestic dealer twenty group earlier this year whose members were frustrated because of this exact issue. Their service lane traffic was plentiful due to low-cost oil changes, but revenue per customer-pay RO was also very low…and dropping.
“A great customer experience and service center trustworthiness are the elements necessary to keep customers loyal to your dealership.”
To drive the point home even further, the IMR, Inc. study found dealerships own the oil change business on new cars under three years old, capturing 64% of the business. But at the four-year mark, a dramatic shift occurs with only 40% of consumers staying loyal to the dealership. (See graphic.)
So dealers get all the no-profit oil changes in the early years, then by the time cars really need serious maintenance, consumers have defected to the aftermarket. When you retain them the most the first three years, they spend the least; when you retain them the least (starting in the fourth year), they spend the most! Let me repeat that: When you retain them the most, they spend the least, and when you retain them the least, they spend the most. Does that cause you pain?
So how do you stop customer defection? How do you stop the bleeding? It is a two-fold process of giving the customer what they want (based on the IMR, Inc. study):
- A great experience. This involves personal interaction with your employees and the overall impression of your service drive and customer lounge. To properly assess the situation, I’d recommend you invite a trusted female friend to look things over. Women are better at this sort of thing than men. Maybe the old waiting room chairs need to be taken to the dumpster along with the toys and games in the children’s play area. Clean restrooms with soap are a must. It may be time to replace the outdated coffee pot with a new Keurig and flavored coffee selections.
- Trustworthiness. I recently surveyed a group of advisors to determine the top objections they were hearing when they offered service suggestions to customers. One of the most common was, “Do I really need this service?” Service suggestions were apparently coming across as something the advisor just fabricated in order to pad the ticket. That wasn’t, in fact, true, but that was the perception. Trust is such a fragile commodity; so hard to build and so easy to destroy. The service sales process must be done correctly and with consistency—presented the same way, to each customer, each time. It can’t be left to chance. A detailed technician inspection of the vehicle followed by a logical sales presentation to the customer produces trust, not to mention increased sales! (I’ve developed a really solid vehicle inspection and sales presentation process. Email me at firstname.lastname@example.org and I’ll send it your way.)
The intersection of a great customer experience and exceptional service center trustworthiness centers around your ability to effectively present tech-recommended, needed services to vehicle owners. The better you do it the more customers you’ll retain and the more revenue you’ll make.
Some service managers and advisors think selling service will drive customers away. They think offering preventive maintenance services will lower the customer experience. Wrong! They think that selling service will erode trustworthiness. Wrong!
It’s a very convenient excuse to never sell anything, and it works—by chasing customers and maintenance dollars into the waiting hands of your competitors. Turning a humble oil change into maintenance revenue and increased retention means we’ll all have a Merry Christmas!
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. He has trained over 5,000 dealers, managers, and technicians – and has been a frequent workshop leader at NADA’s annual convention.