Through the peak of the pandemic, we saw customer pay repair orders (CPROs) all but disappear in some markets and greatly diminish in most. In June 2020, a historically strong service month, CPROs were down 20% from the 2019 YTD average across all brands and greater YOY. Whether you believe it or not, your service departments are the conduit for your dealership customer retention. Think about this: If you do not get those customers back to your dealerships via your service departments as soon as possible, will they ever come back? I am not necessarily concerned with your service department’s growth during the pandemic; I am very concerned, however, with your dealership’s entire customer retention strategy, the foundation of which is your service department. Volume is the elusive elixir to profitability. As a moderator, I get asked this question by clients all the time, and more so during times such as those we are currently going through: “How do I increase volume?” or “How do I increase ROs?” Let’s look at a few strategies and paradigms that might affect our service retention and therefore our dealership retention.
How do you define prosperity at your dealership? Profit? Growth? CSI? These attributes are all closely related and arguable start with your service department’s retention strategy. Your sales team sees your customers once every three or four years, while your service team has face-to-face interactions with your customers twice per year! Advisors are the face of your dealership. Service department customer deflection can be synonymous with dealership customer deflection. Are you rolling out the red carpet for every customer upon every dealership visit? What are you doing today to ensure your service customers are booking appointments in the future?
With the pandemic, it’s safe to say automobile utilization has decreased simply due to an increasing percentage of the workforce now working from home, avoiding crowds, delaying vacations, etc. The consumer might be thinking, “I can skip my service this season …” How are you educating your customers that they need to continue regular maintenance to prolong the life of their vehicle? A quick search showed several of the best dealerships I work with have multiple advertisements concerning service on their dealership homepage – not buried in a drop-down, three hyperlinks deep, but on the dealership homepage! Consider marketing your service department and your dealership at the same time.
Arguably, oil changes and tires are the most significant deflection points of your dealership. In some markets, tire storage/swaps create a somewhat captive market. No matter the climate in which your dealership is located, you have to educate your customers upon every visit that you sell and service tires. Not only do you sell tires, but you’re just as competitive as the tire supercenters located around your dealership. Your service advisors should talk to every customer coming through your shop about tires, whether they’re needed on this visit or next. Have word tracks and make the tire pitch part of every customer interaction in your service department.
“Do you have another car in your driveway at home? We service all makes and models.” Have you ever heard one of your advisors offer this word track to a customer? I’ve never been asked that by an advisor, and my wife and I take our vehicles to two different dealerships for service. I’m sure many of your customers haven’t been asked that either. Create a “Household Special” to incentivize your customers who are not currently bringing all their vehicles to you to start doing so. The NCM Institute’s Service Advisor I course suggests making this word track part of the Active Delivery Process, a step in the Service Advisor’s Road to a Sale with every customer.
How does service capacity contribute to RO erosion? You need to be managing your appointments considering your shop capacity. Let’s keep it simple. How many hours do you need every month to fill your stalls for eight hours/day for every working day? Technician shortages will result in unmet capacity. With the furloughs that might have occurred during the onset of the pandemic, it is possible you created capacity issues or bottlenecks in your operation for a period of time. In weekly discussions with my clients, I listened to a lot of challenges with the self-inflicted staffing shortage. Out of necessity, suddenly, shops were in a very reactive position while navigating the unknown challenges ahead. This was a painful time for business, but it provided the opportunity to look at the operation from the ground up and better optimize the staffing. Across all brands I saw ROs diminish but hours per RO increase. It was not long before bringing back staff was in order, with the luxury of bringing back the right staff. The goal is one technician per stall. How many appointments do you need every day given your shop’s average hours per repair order? If your afternoons are slow and/or you do not have holdovers from time to time, you need more appointments. Avoid allowing your advisors to decide when the shop is full. If they are managing it, it’s human nature to slow down toward the end of the day.
Why don’t all your customers set regular service appointments? It is more than likely because you have not done an adequate job of conditioning them to do so. Your advisors must do their part to educate your customers on the value of an appointment. Beyond that, if we look to CSI data, there’s a strong correlation with low CSI scores and waiters. The NCM Institute service manager/advisor curriculum presents word tracks for walk-in customers to explain the value of a future appointment while graciously accepting their unexpected business. Setting next service appointments is a world-class process. Have your advisors set the next appointment for your customers upon every visit during the active delivery and, just as important, ensure you have a process to follow up with those appointments at the appropriate time. Setting appointments must become the culture of your service department as they are on the variable side of your business.
Not to be redundant, but service appointments along with CPRO preservation/retention are the lifeline to your dealership customer retention. Please start today strategizing around building customer satisfaction, customer retention and customer recruitment strategies in your service departments. If you don’t, your customers might end up somewhere else. Once they leave, it is much more difficult to lure them back.