Business is Good

Jack Gardner
Posted 3 years ago

Wow, we find ourselves in a period of great opportunity and prosperity. The economy is in good health, banks are lending, and, most importantly, customers are spending. This truly is a time of plenty. But we all know that this will change eventually.

The only way to view the future is to look at the past. And the further you look back, the further you can see ahead. This begs the question: What are you doing to ensure that when the economy turns (and it will) that you have put into place the processes, tools, and systems that guarantee you come out of a down economy stronger than you went into it?

What are you doing to ensure the customer that buys a car or truck from you today will return and buy from you in two, three, four, or five years’ time?

The hard work is done. You sold a new or used car or truck to Mr. and Mrs. Jones today. They are now your customer, and it’s up to you to keep them. It’s a lot easier and cheaper to retain a customer than it is to advertise and get a new one.

OK, so you sold them a vehicle and it was a good experience for the customer. Great, we started on the right foot, but you cannot depend on this good experience alone to bring them back in years to come.

The easiest way for you to ‘wow’ the customer during their period of ownership is in the service department. I am so tired of hearing owners and management referring to their service department as to the back end. Wake up, people, your service department is not the back end. It is the backbone of your dealership — and as your service department goes, so goes your business.

  • A customer is 4 times more likely to defect to a competitor if the problem is service-related than price-or product-related.
    — Bain & Company
  • The probability of selling to an existing customer is 60 — 70%. The probability of selling to a new prospect is 5-20%.
    — Marketing Metrics
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%.
    — Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy
  • 55% of customers would pay extra to guarantee a better service.
    — Defaqto research

What are the easy and inexpensive ways to leave your service customers with a warm and fuzzy feeling? The first is knowledgeable and friendly service staff. There is nothing worse than a service advisor making the customer feel like they have interrupted the advisor’s morning, or worse, making the customer feel stupid. Another is a complimentary wash and vacuum, it’s not that expensive but has a great impact.

Quick Lane: Almost all manufacturers now require dealers to provide some form of the quick lane. They do this because that’s what surveys say customers want, but it’s extremely important that dealers don’t get caught up in the time factor alone. Yes, it’s important that this service is provided in a timely manner, but not at the expense of providing subpar service. You are still required to carry out the MPI, and not just on cars with over 30,000 miles on them. Sure, this is most likely where some additional work will be identified, but what about the customer that has only five thousand miles on their vehicle? Surely they would like to hear that their vehicle is in perfect working order.

Don’t allow your service department to become Bad News Bobby. Don’t just tell customers about their problems, but also about the good things in their car. If possible, show them, use photos. Better yet, use videos to reinforce this. Remember, not everybody is knowledgeable about the workings of a car. They don’t know what a CV boot is, or what it does, and certainly won’t pay to have it replaced no matter how well your advisors explain it to them in person or over the phone. You need to show them. Think about it: when your kids were small you didn’t tell them how to do something, you showed them.

Warranty: Free has no value, so when you tell your customer that you replaced some part under warranty, it has little or no impact. The customer feels that you just did your job. Add value to warranty work by showing the customer exactly what you did, and by doing so the customer will appreciate your diligence and professionalism.

In closing, now is the time to put in place the programs and processes that will ensure your continued success. Don’t wait to make your service department the best it can be, make it great today. Exceed expectations and by doing so you will see an increase in referrals, service, and sales.


This article has originally been published in Massachusetts Auto Dealer Trade Magazine, August 2015

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