Ask anyone on the street “Why do dealerships exist?” and I imagine you’d get one primary reason again and again: to sell cars!
That much seems obvious, and based on what most dealers tell me is their biggest priority, they seem to feel the same way. With vehicle sales reaching over 17 million units last year and dealers enthusiastically implementing various marketing and CRM solutions to capture and follow up with leads, it’s clear that the sales floor remains the dealership golden child.
But, should it be?
When we take a closer look at what areas of the dealership receive the most attention versus who’s actually bringing in the most profit, there are discrepancies that are pretty hard to justify.
Focus on Service
According to NADA data, fixed operations is a $310 billion business. That dollar amount is only set to rise, as NADA also estimates that 80 percent of vehicles on the road are out of warranty while the average age of a vehicle is 11.5 years.
Unfortunately, dealers are only capturing about a third of that business. There are numerous reasons why, but the fact is a lack of investment in improving fixed ops processes and performance is stunting what should be the major profit center in a majority of dealerships.
Remember: The other two-thirds of fixed ops business that the parts and service guys down the street are getting is almost $213 billion in sales.
That ought to spark some questions:
- Why is the same CRM concept used in sales not used in service?
- How does your dealership track recommended services declined by the customer?
- How are those services followed up on?
- How many technician recommendations never make it to the advisor? I see this all the time – technicians see problems, and undertrained or overworked advisors don’t have the time or the skill set to sell additional services to the customer. They could be afraid of upsetting the customer or worried about getting other work done.
- Have you implemented a consistent service process?
If a dealership hasn’t implemented a consistent service CRM process, technicians and advisors are prone to leaving. Technicians want advisors to upsell their recommendations and advisors want the technology to do their job effectively. Worst of all, customers will leave to find a shop they trust.
If you haven’t already, consider a process shift with a CRM tool for service. Ensure inspections are completed 100 percent of the time on vehicles that come through your service department. With the adoption of this new process, advisors can track upsell opportunities and follow up on them every time.
There’s one final, critical aspect to this that often gets overlooked, as well. The fact is, even when some or all of these activities are performed, if they’re not being done in a way that’s integrated within the existing dealership process, you’re still creating unnecessary inefficiencies for yourself and your staff and mitigating the value added.
To maximize the benefit of implementing a consistent service CRM process, consider a DMS that prioritizes seamless, digitized integration. Weaving the steps listed above into a consistent process is critical, but it’s when they’re integrated into a smooth digital workflow that you’ll realize the full value of both cutting out inefficiency and creating brand new value for your service department.
Author: Jeff Adams
Jeff Adams is a Product Planning manager for Service applications at Reynolds and Reynolds.