Fixed Ops – February 2018 – by Jim Maxim, Jr., MaximTrak Technologies — It all starts with great conversations, excitement, and anticipation, but with time comes a lack of appreciation, and then you have retention problems! No, this is not dating advice, but thinking this way can keep the newness alive in your relationship with your customers.
Do your customers feel special in the service lane the way they once did in the showroom, or do they feel like the routine of an old couple? Moreover, perhaps a more important question is this: what business are you missing because they’ve “lost that loving feeling?”
Of course, when customers first walk into the dealership, they are appreciated. They are treated to all manner of beverages, a comfortable place to sit, and the latest in Wi-Fi and other connectivity amenities. They’re hand-held through a complex process and given the Five-Star treatment.
I’m suggesting here that there are good reasons to treat customers consistently, by empowering and equipping the service department to extend the showroom experience to the service lane for enhanced opportunities for retention, sales, and synergy with your entire dealership.
Given the volume of customer traffic a service department encounters daily, any opportunity like this to push back at margin squeeze can mean additional revenue for the dealership.
New service drive opportunities
Here are some considerations to strengthen that exciting showroom experience, improve retention, and create fantastic sales opportunities on the service drive.
There are many practices for opening gifts at Christmas time. It has been our practice to take turns to give each person enough time to “ooh and aah.” Each gift, giver, and the receiver has the opportunity to be appreciated. I think this “sharing” idea is a good thing to extend to your service advisors as well.
When you open up your service appointment schedules – i.e., spread them out – advisors will now have sufficient time to engage in more fruitful discussions with their customers. Not only does spending conversational time with customers nurture goodwill and customer satisfaction, but it also contributes to retention. It helps customers feel appreciated and for them to recognize the valuable services you provide to them. After all, it is a relationship.
Another value-rich reason to give advisors more sharing time is that a more relaxed schedule creates opportunities for advisors to upsell and cross-sell. They will not do that if the next appointment is breathing the same air, the customer at hand feels rushed, or the experience feels unfriendly to them when that is allowed to happen.
Using more casual scheduling – i.e., limiting the number of R.O.s an advisor handles each day to no more than 20 – should leave 15 minutes between appointments for upsells and cross-sells, and in today’s tight market, the presentation and sale of F&I aftermarket products.
Sell F&I in the drive
When selling aftermarket products like vehicle service contracts, tire and wheel, prepaid maintenance, and others – whether in the F&I office or the service lane – taking the time to educate, identify needs, and present product solutions almost always results in more of these products being sold per customer. The reason is the same that helps you make choices – customers understand and desire the value these products can bring to their lives.
Some customers who declined to purchase aftermarket products in the F&I office when buying their vehicle will have reconsidered those options post-sale. They may be ready to review those offers again when they bring their car in for their first and subsequent services – if you offer and ask them to consider them. Thus, you want to be proactive here. Have an aftermarket products presentation prepared, consistent with what they experienced in the showroom when buying the vehicle. By using this structured approach, you build experience cohesion and brand consistency.
However, to navigate that conversation, customers would benefit from a dynamic digital products presentation (with pricing), viewable on the advisor’s tablet, smartphone, or desktop. It would interface with the same e-menu technology used in the F&I office but be tailored with options related to the customer’s specific vehicle, available upgrades, and service needs.
For the advisor, these presentation tools offer a unique and powerful method for enhancing the dealership’s value to customers by maximizing, at the moment of repair, upsells to accessories, parts, services, and aftermarket protection products – all while reinforcing the relationship with their valuable customers.
A real service, no gimmick
Selling F&I products on the service drive – informing customers about how aftermarket products can help them better manage unexpected or out-of-pocket expenses – provides a real service. It provides other ways to save them from headaches, improve their vehicle’s performance, and enhance their overall ownership experience. Considering how the average American has around $500 in their bank account for emergencies, products like service contracts and prepaid maintenance plans that can help them offset the cost of future needs, can be a big win.
The service lane is an excellent and widely untapped opportunity to reinforce that relationship and to offer F&I protection products. For example, Fidelis PPM, the dealer-branded prepaid maintenance company, says 75% of its plans are sold in the service lane.
Selling accessories on the drive has great potential too. David Stringer, President of Insignia Group, which offers accessory sales and training for dealerships, notes that 70% of dealers don’t have accessory sales on their radar. Selling F&I in the service lane can reintroduce customers to accessories, and the right technology can show them what their vehicle will look like wearing various accessory products.
Selling products like preventive maintenance and service contracts also reinforces a customer’s connection to the dealership. For instance, many prepaid maintenance plan services that feature regular oil change or tire rotations schedules are redeemable only at the issuing dealership. Each visit by a plan holder gives the dealership another opportunity to service that owner’s vehicle needs – and again be rewarded with potential upsell opportunities.
The potential revenue alone that these plans can generate should encourage their sales in the service drive. An East Coast group says users of its prepaid maintenance plan purchase $175 in additional maintenance/repair business per repair order. For this group, this usage translates to $200,000 a month in otherwise largely unrealized revenue.
So how does management implement a service drive program like this and measure the results? First, the service manager must set a lower daily write-up quota. Second, require the use of F&I menu-selling tools; and third, measure results through use of a reporting system.
Spiffs for success
I’d like briefly now to touch on practical ways to incentivize advisors for upselling and cross-selling, whatever the product, which I am repurposing here from a related article appearing in the November/December 2017 edition of Fixed Ops magazine.
- To promote advisor buy-in and enthusiasm, structure plan reimbursement so the store and advisors make money. Consider plans that include in their administrative structure compensation for advisor upsells.
- Link pay plans and spiffs to production goals and targets – and hold staff accountable for performing plan steps and practices correctly and consistently.
- Train advisors so they can accurately describe and explain the F&I products you sell in the lane – and give them talk tracks for helping customers understand these products’ value to their vehicle performance, safety and security, and budget protection.
- Be sure your F&I platform can offer dashboard-reporting tools for tracking customer use, advisor activity, and sales by product category.
Service department advisors should be your dealership’s most potent retention ambassadors. When they can earn commissions from the sale and renewal of such F&I products as dealer-branded prepaid maintenance and service contracts, to name just two, retention and customer-pay dollars will go up. Advisors are making more, and as a result, their job satisfaction is conveyed in every customer greeting and their loyalty to your dealership.
Selling F&I in the service lane is not a new idea, but until now the technology and processes to make these sales practical and successful haven’t existed. Now, as the digital revolution continues to bring process improvement to dealership practices, connecting your entire business – and making your customers feel special – has never been easier. The secret to a lasting relationship is never to stop treating them to the best you have to offer.
Jim Maxim, Jr. is president of MaximTrak, a RouteOne company, chief digital officer for RouteOne, and a provider of digital F&I platforms for dealers. He is an F&I visionary recognized by CIO Review magazine, a frequent panelist and speaker at various F&I conferences and summits, and a contributor to automotive retail media about evolving F&I technologies. Reach him at email@example.com.