Dealers know you must provide fast, convenient, and competitively-priced service in order to retain your customer base. They also know that oil changes and light maintenance are the most requested service items by customers. Knowing this, why do dealers continue to fight express service?
I’ve heard all the excuses ...
"It hurts my hours per repair order."
"It hurts my gross profit percentage."
"It hurts my effective labor rate."
"I can’t make any money in express service."
... the list goes on and on. Shouldn’t we think about it differently?
Isn’t it logical that if a customer comes to you for express services, you will have the advantage by getting the remainder of their maintenance and repair work? Customers generally do business with people they trust. If you start to grow that relationship from day one, when the only things that are needed are express-types of items, won’t you have the trust of the customer when the “real” repairs come into play?
We need to realize express service is a gateway to greater profits, and if done properly you can make plenty of money along the way. After all, how do you think all the mass merchandisers and independents stay in business?
Let’s look at it this way, have you ever taken a low profit (or no profit) deal on a new vehicle? I’m sure that every dealer has, many times. Why do you do this? Often times it's because you are getting a trade-in you feel you can make money on. Other times it's so you can move a unit off the lot to reduce your inventory costs, or maybe to help you reach unit bonus levels for factory incentive money. Possibly, it was just so you would have an opportunity for the F&I department. Whatever the reason you decided to take the short deal, you have a plan. The loss of front-end gross on that unit gave you opportunities to make more money in the long run. You had to make the deal to gain all of the other benefits.
Can you relate this concept to express service? We must retain the customer in order to get all of the long-term benefits.
Express service has an added benefit
If properly structured, you will make money in express while retaining your customers. That is a win-win, both short- and long-term!
Take a few minutes and examine how much money is spent on a single vehicle over its lifetime. Include average warranty work, recalls, oil changes, maintenance, tires, brakes, breakdowns, and anything else that can eventually happen to every vehicle. Once you add all of these amounts together and look at the complete picture, you really see what the customer is worth over the lifetime of the vehicle. You must develop your plan to make sure that customers never go anywhere else, and express service has to be a part of that plan.
Let’s look at express service for what it can and should be, a profit center with long-term financial benefits. Remember, customer retention is a good thing. Get fast, get efficient, get competitive, and get profitable!
Learn more from Steve Hall and the other NCM Institute instructors in our Express Service Management, Collision Center Management, Service Management, Parts & Accessories Management, and Service Advisor training programs.