Dealerships are typically slow to embrace technology. In some cases, it’s for budgetary reasons and for others it’s out of a lack of a sense of need. A recent article in WardsAuto.com reinforced the need for dealerships to streamline their processes. The article explains how as car manufacturing improves and service intervals grow, the only way for a dealership to increase or maintain its current service revenue is through the ability to service more vehicles.
This is increasingly being done through the digitization of repair orders; more streamlined processes during the write-up involving iPads or mobile devices that contain all the customer’s service history at a glance. This is similar to systems that many hospitals have adopted.
WardsAuto.com advises that dealerships should “expect a different breed of car buyer who want a more hands-off, yet transparent, way to engage the dealership.” At the same time that manufacturers are creating onboard computers that will wirelessly relay vehicle data to the dealership, customers are adopting mobile device apps and expect businesses they patronize to as well.
Improving workflow between departments is key to increasing efficiency. At the same time, dealers don’t want to miss opportunities that they could have upselling a repair order. Just as dealerships have adopted CRMs to control sales processes, technology can be used in the same way. It can help to control service processes and ensure that shortcuts aren’t taken while writing repair orders. It can also ensure that the dealership successfully captures all revenue opportunities by correctly presenting them to the customer.
WardsAuto.com explains that many dealerships are embracing paper-free systems that allow them to decrease paper and storage fees as well as employee error, while also reducing warranty chargeback costs.
Service advisors of the future will need less expertise because all of the technical information will be at their fingertips. Qualities that make a good service advisor will change from auto technical knowledge to customer service and sales skills. Dealerships will always need human interaction, however. Most consumers don’t want to deal with push-button robots in the nature of gas-station car washes (press 1 for 85,000 mile service, etc.) What they want is more transparency and efficiency in the processes involved in getting their cars serviced.
Dealerships that adopt technology, streamline their processes and make a more pleasant customer-centric service experience will position themselves well to compete with the independent auto shops for the extra service business that they’ll need to acquire to maintain and grow fixed ops revenue for their stores.
There was a fascinating article in Automotive News which discussed a new trend that many dealers are adopting: placing their service departments at the front of their dealerships.
In the article, it showcased Bill Underriner of Underriner Motors who was also the President of NADA in 2012, explaining why this concept was a wise strategy. With the service, parts and body shop accounting for, on average, 43% of a dealership’s annual gross profits, it made no sense to hide it as is the case with most dealership’s building design. Although costly, he expects that it will pay for itself within 2-1/2 to 4 years due to an expected 14% increase in revenue from those departments.
Many dealers focus too much of their marketing on building showroom traffic and car sales. It’s certainly an area in which they need to excel as well as sate their OEMs through branding. In some cases, OEMs are even subsidizing building redesigns to conform dealerships to a single look and feel. Given the high percentage of revenue generated by these fixed ops departments, however, why would you want to hide them in the back of your building?
The facts are that there is a transformation occurring within the automotive landscape. While the number of vehicle on the road has increased to 249 million, the number of vehicles on the road under warranty has decreased by 10%. The length of ownership has also increased from 34 months in 2001 to 58 months in 2012 – an increase of 170%. The trend of length of ownership increasing, in combination with the decrease in cars under warranty, means that there has never been a better opportunity to increase your fixed ops revenue.
By putting your service department front and center, implementing processes and technology that facilitate easier communications amongst departments while making information available that will encourage and increase up-sells to service clients, the opportunity to increase revenue has never been better.
To be continued…
Customer: “Is my car ready?”
Advisor: “Let me check…. I’m not showing that its ready yet, ma’am.”
Customer: “Do you know when it will be?”
Advisor: “I’ll have to check with the technicians. We’ll be sure to call you when it is, however. It should be done by the end of the day.”
Is this a conversation your service advisors or cashiers are having with customers? Wouldn’t it be nice to be able to have this conversation instead?
Customer: “Is my car ready?”
Advisor: “Hi Mrs. Smith, the oil change has been completed. The tech saw that the fluids were low in a couple of areas so he went ahead and topped them off. Your car is in the service bay currently getting the tires rotated and balanced. ETA on completion is about 30 minutes. Is there anything else I can answer for you?”
Not only would a customer be impressed, it would probably save your employee from having that same conversation with the same customer 3 hours later. Not to mention the time it would take them to track down and get the information from the various people involved to deliver it to the customer.
In today’s world filled with instant access to order statuses, tracking numbers and information, consumers are now used to getting immediate answers. With all the available technology at our disposal, and with that technology decreasing in price while becoming more powerful than ever, there’s no reason why a dealership can’t implement a similar tracking feature into their operations.
Having a system like this in place not only puts the power of information at your disposal for the purposes of customer service; it makes your operations more efficient. Gone are the days of the service advisor having to track down the tech to find out what’s going on with the customer’s vehicle. The tech doesn’t have to go to the parts counter to request parts for an RO, and the parts counter no longer has to track down the tech to deliver the parts.
Even at the most basic level, a system like this is worth its weight in gold. Of course, MPi takes this philosophy and multiplies it by a hundred but whether you go with a full-featured system like ours, or implement one of your own, the fact remains that customers want information. The more effort it takes to get them that information, the less time that service advisor has to write new ROs or upsell existing ROs on recommended repairs.
Businesses across the world are embracing and integrating technology into their operations to increase both efficiency and customer service. It’s time for your dealership to embrace technology and use it to create a more efficient and customer-friendly operation.