Help with growing Retail Service

[jccarguy]

We have a small (400 retail unit) Ford Store. 3 years ago we merged two Ford stores in the same community. There was previously a lot of animosity between the two dealers. We seem stuck at our current service level, and we know there is more out there. We use a basic R&R system, no CRM system. What advice would you care to offer as cost effective places to start and what stratedgy for pricing. Its very much a commutor market, we are open Saturdays with mediocre results. I would appreciate earing from anyone, in particular simular stores. Thanks

[johnnyo]

Dear JC

People need a reason to go to your shop.

Our service department had a high CSO and parts RO fill was good. The problem for the dealership is that it is a country dealership often selling to people living in a metro area. People would often would buy the car from us and service it elsewhere.
So we scratched our heads and decided that our customers needed an incentive to draw them back to the dealership.

Here is what we implemented with excellent results.

We pre-sold 10 oil changes (as a special) using a plastic card (like a credit card). The 10 oil changes when bought on the card where almost 50 % off. The front of this card had our dealership name and phone number and the back had 10 scratch off spots. The service advisor scratched off a spot each time the customer used the card.
The decision on splitting the costs involved (as this special was below cost) was that the cost would be split between all departments. The reasoning was that if the customer could be brought in that they in turn might car shop. The key was getting the customer to come back to the dealership and in the door, satisfying them once they where there was now up to all staff.
It took about 6 months, but the results surprised all of us. Our shop is about the same size as yours. We sold some 300 cards in 6 months. (And more since). The next step was to include this in the sales process. Sales would introduce the card and the cost savings to the customer at the time of the sale.
We allowed customers to share their card between family members. Some bought it as a gift for a son or daughter.
Getting the customer to come back is only one half the equation, it is still up to the tech (and everyone) to see if the customers car requires any further service.

Some one is going to look after each of these customers service needs. Giving these folks a financial incentive to return made it easier for them to choose us.

Once they have the card we know that they will be in at least ten times.

Hope this is of help.

[Mike Vogel]

Besides the given that the customer needs to be treated right the other 2 things that should help you grow is that your hours are convienent and your pricing is competetive with your local independents. You need to price shop your competition (not other ford stores) and work on your techs to concede on competetive services such as lof, tune ups, brakes, tires, etc. If you are slow on certain days such as saturdays try offering an extra discount to drive the traffic on those days. Also try offering a reduced price oil change on their next visit if they perform a maintenance service today. Last thing is have your advisors book their next scheduled maintenance before they leave and follow up with customer the day before the next appointment to confirm. Some or all of these things can help develop your department along with the usual service reminders and direct mail pieces that you should already be doing.

[flyboy]

I think I am going to step in here and disagree with the previous posts.

I have proven, time and again, that slashing prices is not what makes a service dept profitable. If you loose customers because your oil change price is a couple dollars higher than an independant, you have lost nothing more than a mooch, seriously.

Consider this, as it sounds as if you are in it for the long run, and understand the quick fix is not usually the answer. What you really need is customer education. Help them see the benefit of doing business with factory trained techs, held to a higher standard. Show them the difference in the factory oil filter and one from jiffy lube. Explain the numerous computer controlled functions within the vehicle they purchased, and that a dealership is the only place for training on such systems. Help them to appreciate the second largest investment they have, should never be cared for by the same guy who was flipping burgers last week!

As dealers, we are so much more advanced than the independents, why don't we advertise that? Why in Gods name would we lower ourselves to the level of some knucklehead that has never opened a service manual, taken any kind of training, or works without any factory support? Why don't we do some simple research and see just how many years of experiance the individuals have in your local area who are changing oil? Compare that with what you have in your own shop, show and sell benefits!

This has to be implemented in the dealership from the sales persons, to the finance, to the service writers, to the parts persons etc. We are lightyears ahead of the aftermarket, in every area, but we fail to inform our customers of that. Shame on us.

And to think, our response is to cut our prices. Please.

I do agree comparative shopping is valuable. What I am suggesting is to show our customers value, the value in doing bussiness with a quality dealer.

(Whew)

Thanks for letting me vent.

[johnnyo]

There once was a man who had a simple concept that if you give excellent value with a great price people would come. He did away with items that ended in 99 cents and used his own staff in the store flyers to sell products. With just a few good consistent ideas (and in just a few years)Walmart has become the worlds largest competitor in the retail industry.
It is noted that Walmart sale flyers use a financial incentive to draw the customer in to the store. Once there it is up to the staff to make sure the customer is well treated. The back of Walmart employees vest say our people make the difference. These simple and successful concepts can be duplicated and used successfully at the dealership level.
What works today may not work tomorrow, it is good to be flexible and keep trying new things.
I agree that part of the process is to educate customers.
It takes a good cross section of ideas to be successful

Nice to have this forum to compare.

[Mike Vogel]

In response to price slashing, what I meant was to get our pricing more competetive, not as low as independents. Anyone that has been around service long enough knows that it is us the dealers that created the independents by price gouging thru the years on quick services and maintenance. Be fair in your pricing and have the right people going the extra mile for the customer should get you plenty of customers. Earning the customers trust is the first part of the puzzle. Fair pricing would be second ( not the cheapest ).

[lightnup]

Ask your R&R rep to show you LoyaltyLink. It may or may not be right for your situation but it's worth a look before making a decision.

[RPMGeorge]

Hi Guys,
This was mostly intended for flyboy but there are quite a few "Dealers" out there with the same viewpoint on independent repairshops.
I dont know and never will understand why so many dealers are bashing the independent guy down the street. Most (not all of them) independent shops go thru quite some extend of Technical seminars, buying all sorts of Tech data bases and are very competent techs.
These people handle what, about 40-60% of the overall revenue on repairs? There is a reason independens are successful, they stay updated and in touch with there clients. There pricing structure might at first seem "cheap" but the matter of fact is that you need a body in the shop and being comfortable with the Techs, Services and the pricing. - A leather fitted and fireplace is not a necesity to get a client happy -
Well this is my take on flyboys answer.
As to the problem at hand, there has to be a Value for the customer to come back to your service drive. We have a weekly Thank you, recomendation and Reminder Mail System which brings some of them back on a regular schedule. The once the dont show will get a special invitation with a reduced service price, You have to remember that there is allways the possibility of up-selling once the car is in the bay. Ths works well for us. To get fresh / new public in the drive we developed some programs the work in our neighborhood (surveys will show what's needed)and these go out in bulk weekly as Flyers or other mailings, and of course advertising in the local papers to maintain the image of existence n the public mind.
Prospecting in our field is not easy but bare necesety without it we let good clients disappear to the chepo who does not invest in techs and equipment.



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[jazdale]

JonnyO,

I like the idea of the prepaid LOF card.

I think a lot of people would consider this a great Chrismas gift for the hard-to-buy-for group.

My question to you and anyone else thats done this.
Have you only increased LOFs - or did you have a signicant rise in other forms of CP sales?

How'd you handle the accounting (300 X 100 = 30,000)
Prepaid sales?
Do you post the LOF-RO as a wash to the prepaid card sale?

For USA, how would you handle the tax - if any?

*******************************

JC
Sounds like your problem isn't keeping customers - its just getting new ones in the door.

Are you tracking how many new car sales customers are coming to you for their first visit? Second?

Are you advertising?
Are you fighting with an old bad reputation?
Where are you're potential customers taking their car for service?

You sound ready to throw money at the problem - just need to know what the problem is?

[johnnyo]

Hi JazDale

RE your questions

Yes there was a definite improvement in the quantity of LOFs in the shop that was attributed to the card. (it took about 6 months too really see the change) . One of the key customers we gained was the young crowd that often went to a local jobber (too save money with a low cost lube oil filter). What we found happened is mom or dad loaned [sometimes by free will ] their son or daughter the prepaid card to come to our dealership. In this case it usually is an older vehicle that required some tune up or various things too be completed. By default CP did increase.

The thing is no matter how good a program or sales incentive it still comes down to people to make it successful. Its important that the dealership staff (shop and office) buys in to any marketing concept else all is moot.

As far as handling money, accounting set up a separate account for the monies collected. Service set up a special RO code to handle the internal billing.

This was a prepaid service. All taxes paid at time of sale.

The accounts receivable / payable clerk also kept a manual list just in case and kept track of the usage of each customers card. This was done in case a customer told us they forgot the card. She could instantly tell service if the customer was on the list and how many oil changes where left.

It does take a bit of cooperation to assure the success of the program. Once everyone had his or her procedures and accounts set up, the concept worked very well.
Often the various internal departments work as islands on separate sales promotions. The neat thing is that this small LOF card tied parts, sales and service and accounting into a combined marketing program. That in it self was a positive aspect for the dealership.