Yes, data mining is part of our EDGE Service Turn program and yes we are telling car dealerships that they should not rely on data mining services. You see, data mining is only “part of” our program as we offer clients a full-service, technology-driven program.
Here’s what’s wrong with most data mining services and software…
1. Data mining software and data mining services are great at identifying prospects who should be in the market for a new car – but they leave sales executives hanging afterward.
There are many reputable data mining services, programs and solutions that help sales executives at car dealerships identify the best service prospects that should be in the market for a new car. They provide sales executives with all the information they need including:
- The car owner’s current interest rates – and the rate they can be getting right now if they got a new car
- Book values and auction market reports so sales executives can offer their clients appealing trade-up values
- How much is being spent on the car for maintenance issues so sales executives can show clients the maintenance savings they’d be experiencing if they got a new car
However, what good is this information if your sales executives do not know how to use this information to turn service customer into new car buyers? You see, data mining companies that offer their tools as a solution for car dealerships (rather than part of a solution that offers support to a process) enables car dealers to continue the traditional sales approach in the service department that’s converting less than 1%! In fact, the industry average for selling new cars from the service drive is .5%, while our clients are experiencing an average of 3% to 5% closing rates from the service drive.
It’s not your sales executives’ faults that you are not selling more cars from the service drive. They do not know any better. Instead of adapting to a new environment where customers are not looking to be sold, they are relying on the same strategies that worked on the sales floor as all they are given is data.
We offer clients an entire process that helps car dealers sell cars through service by providing:
- Complete manager’s report
- Appointment confirmation phone scripts
- Merchandising that lets customers know that the dealership is interested in buying high quality cars
- Letters from the GM that provide a highly personalized customer experience
- Client information worksheets that are designed to demonstrate your genuine interest in getting to know about the customers while showing the customers that they really need to get a new car now
- Rep training as sales executives need to know how to use the data to provide service customers with a unique customer experience that focuses on quality assurance first.
I’m revealing our 8 step quality assurance process that helps Kelly Nissan sell at least 25 additional cars per month (from the service drive) that they would not have gotten otherwise. Not only is Kelly Nissan getting more cars sold but they’ve also increased their CSI & SSI!
Register for this webinar now! https://www2.gotomeeting.com/register/970279266
2. Data mining tools help you find the people that might be interested in buying a new car for a variety of reasons but then you have to get them into the dealership somehow.
On average, car dealerships are paying $400 per car sold on advertising to get people inside their doors. Their spending money on telemarketing, sales reps performing cold sales calls, radio/TV/newspaper/magazine/internet marketing and now even social media marketing.
Car dealerships are spending all this money on lead generation – and they’re totally forgetting about the leads that are already at their dealership. That’s why I help clients focus on the customers already coming in for service (maintenance and repairs of their current car). You don’t have to worry about getting them to the dealership – as they already have scheduled appointments (meaning existing new car sales opportunities.)
3. Car dealerships are only taking advantage of 30% of new car sales opportunities using data mining tools.
Data mining tools like Auto Alert can’t help car dealerships with customers that come in without an appointment. That means dealerships miss out on 40-50% of the opportunities, as that is the typical percentage of people that come in for service without an appointment. You need specialized car dealership software and technology that allows your dealership to quickly identify prospects for a new car and put them through the new car sales conversion process whether they have a scheduled appointment or not.
4. Because of the financial crisis – the data can be inaccurate
After the global banking and financial crisis, banks are making their own decisions on the residual value of the car and their estimated current value of the car in order to reduce risk and cut their losses. This is resulting in inconsistent information and inaccuracies that sales executives would be unaware of if they do not have a process to evaluate the customer’s current situation.
You see, the data and the technology should not be the end solution. You need a complete process that offers a personalized, human touch that gives customers the service experience they are looking for while letting them know about their options.
To see how your car dealership can sell at least 20 to 25 new cars per month from the service drive (while simultaneously increasing your dealerships CSI and SSI) – register for our next case study webinar where we show you how the Kelly Group gets a 5% sales conversion from their service drive month-after-month.
Register for this free webinar now! https://www2.gotomeeting.com/register/970279266
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.
Hotel chains across the country have long had problems with customer loyalty due to an inconsistent customer experience. In researching the problem it was found that the prime reason for the disparity in customer experience was due to the growth of each major brand. Hotel chains were acquiring new properties and, in many cases, simply slapping their corporate branding on the building to attract customers.
Despite the fact that each hotel within the chain shared the same name, the quality and amenities at each varied. Some were luxurious and offered all the amenities that a business traveler could want; and some were below the standards that their loyal customers had come to expect. In 2004, the hotel brand, Hyatt decided to tackle the problem and do something different.
Hyatt created the “Hyatt Place” addition to their brand offerings. Their strategy was to create a brand in which, no matter where it was located, a business traveler would have the exact same experience. Everything is exactly the same. The lobby has the same floor plan, the bar/eating area is in the same place, the fitness center is in the same place and offers the same equipment, and each and every room at all 160 locations is exactly the same. Business travelers fell in love almost immediately. They knew exactly what they would be getting no matter which location they stayed in. Hyatt Place has won 7 awards over the last 6 years, and recently became the highest-rated mid-priced hotel chain in the country.
Consistent customer experiences generate trust. Trust generates loyalty. Trust, however, is a fragile thing. It is hard to earn but easy to lose.
How does customer experience translate to loyalty in your dealership’s service department?
It starts with consistency. Your technicians inspect customer vehicles and recommend repairs to your advisors who advise your customers. How consistent are your recommendations? Do you know how to find out?
An exercise that I recommend to dealerships is as follows:
- Find a car that none of your service techs have ever looked at.
- Put it on a hoist and have each of your technicians independently (and by themselves) inspect the vehicle, just as they would a customer’s car, and record their observations and make their recommendations.
- After all of the techs have inspected the vehicle, compare the findings.
This is an actual example of the results of this exercise:
As you can see, the results are all over the place. Imagine if a customer visited the dealership and the advisor told them they needed service on both the left and right front brake linings. The customer declines on this occasion. On their next visit maybe they ask the service advisor about those brake linings. Based on the inspection from that visit, where a different tech does the inspection, the customer is told that the tech marked them as fine. This would certainly raise red flags to the customer. It could also destroy the trust that’s been built with them.
I challenge you to perform this exercise on a regular basis. It will help create a more consistent customer experience with each visit reinforcing the declined recommendations given previously. And it will also help point out errors to any techs that need additional training due to recommending unnecessary repairs and/or failing to see needed repairs. Set a consistency goal in relation to this exercise and, when it’s achieved, have a pizza party to reward your techs.
Customer experiences are of course important in all areas of your dealership. The service drive accounts for almost half your dealership’s revenue and sees more traffic in a day than your showroom may see in a week. Make your service experience one that builds trust in your customer and loyalty will follow.
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.
Today’s world is full of review sites and social media- the epitome of information at your fingertips. And because of this, reviews have become that much more important for customer retention and new client business. Search engines are becoming increasingly savvier by routinely displaying reviews (and review sites) very high in search results. Many dealerships are recognizing this and paying more attention to them, thus creating processes to encourage customers to share their experiences when buying a new vehicle. This feedback is great and can help foster your next sale.
However, why solely focus on just the sales department? Your service department is the life-line to your customers after the sale is completed, from routine maintenance and repairs to aftermarket accessory purchases to the encouragement of buying their next vehicle from your dealership. Feedback on our service department is equally, if not more important, and shouldn’t be taken lightly.
We all know it’s easy for a consumer who has had a negative experience to leave a horrible (or less than flattering) review of your dealership without any help from you. And, it takes a little more effort to get a happy customer to actually leave you a glowing evaluation. Does it have to be this hard? No; by taking the few minutes to engage the customer to ensure they are satisfied, then asking them to share their positive experience, can be that simple. Most customers who feel they have been well treated and received good value will be more inclined to share their experience, even if the request is suggested by your service team. For those customers who chose to share a less flattering review, do yourself a favor and reach out and try to turn a less positive review into one more favorable. People can (and do) change their written opinion if they feel you made an effort to turn a wrong into a right.
Don’t fall into the trap of focusing only on sales reviews, thus neglecting your service appraisals. Unhappy customers don’t distinguish between the two departments when sharing or reading negative feedback. In a perfect world, you would never have to deal with negative reviews or be in fear of customers rejecting your business because of an off day. But in today’s world, where information is shared in real-time and at a moment’s notice, you need to be prepared to take the good with the bad. Whether it is sales or service, potential customers will certainly see all the shared feedback and will make their buying decisions based off another’s experience. How you deal with the feedback is what really matters… it can either make you stronger or set up for failure.
Here are a few thoughts on why you should be encouraging your service customers to leave reviews for your dealership and how those reviews can translate into more revenue for your store as a whole.
- In most dealerships, the service department produces a large percentage of the dealership’s income. And because of this, I would argue that there are more people using search engines, such as Google, Yahoo!, or Bing, looking for dealerships to service their cars than to buy a new car. Maximize this opportunity to spread the word.
- The competitor base is larger for service than sales. When you factor in competing dealerships, aftermarket car care centers and DIYers you need to grab the attention of your service customers. When buying a new car, customers have limited options if they are drawn to a specific brand. For example, if you are a Ford store, even in a dense auto market, you may only have 5-6 real sales competitors. However, for service your competition can quickly escalate to 50 or a 100 (depending on the marketplace) with all the various service options available. Make yourself stand out from the pack.
- All dealerships strive to turn their sales customers into service customers. Apply this same logic to turning your service customers into sales customers. The fact remains that many of your service customers, if happy, will consider your dealership first when looking to buy a new car. Capitalize on this.
- On any given day, your service department, in reality, is going to be in touch and capturing the attention of more customers waiting for or having service performed on their vehicles than sales. It’s a numbers game. Take advantage of this opportunity. The best marketing is free marketing. Let you customers sell your business for you. AND, on the chance that you have a negative situation arise, work hard to turn it around. Don’t turn a blind eye to any opportunity.
With search engines incorporating more social signals into their algorithms, it will become increasingly important for you to get your customers talking about you. If you don’t already have a process in place to solicit reviews from service customers, start one today.
Final thought… at the end of the day, any customer review is an endorsement that can help you win new business, whether it is service or sales. Encourage your customers to sell your dealership, as word of mouth is the best form of advertising. It costs nothing and can empower you to gain a lot.
In today’s world, there are many standout companies when it comes to customer service; Zappos and Nordstrom being a couple of examples. These companies focus on providing their customers with world-class service and, because of that, people are willing to pay more while maintaining fierce loyalty. Not only do these companies earn the loyalty of their customers through the service experience, they transform many of them into brand advocates. The reason their customers patronize them and recognize this level of customer service is that it is, unfortunately, not the norm in today’s world.
Zappos and Nordstrom are not in business to lose money. In fact, both companies profit through their reputations of providing great customer service that, in turn, increase their customer base by attracting new customers eager to share in the experience.
The Olive Garden restaurant recently sympathized with a patron whose parent’s house had just burned down and decided to comp the party’s entire meal. The patron posted a photo of the comp’d receipt to the Internet in an effort to thank and show appreciation for the Olive Garden’s good deed. Because people aren’t used to acts of kindness and service from companies, many were skeptical and questioned the receipt as a PR stunt even after the patron posted links to news articles reporting the house fire and the Olive Garden’s PR agency denying their involvement. The photo quickly went viral and has not only spread through social media but has also been picked up by prominent news agencies like Yahoo!, The Huffington Post and the Consumerist.
By providing an exceptional customer service experience; your customers will become loyal and share their experiences with others. Even though people may begin with skepticism, by providing a consistent experience of excellent service, word will spread and customers will not only go out of their way to patronize your dealership but also to encourage others to do so.
Through technology, we’re more capable than ever to provide this experience to our customers in an easier, more efficient manner that will lead to increased revenue, loyalty, customer retention and consistently excellent CSI scores while allowing you to maintain an acceptable profit on your services.
Transforming your Service Drive into a Sales Drive
In this presentation Holland will address how to empower the service department with tools that build connections with customers and drive owner retention. Although the obstacles can appear formidable, your service department can flourish in today’s rapidly changing automotive landscape. How auto dealer service departments will remain profitable and viable contributors to the business with fewer units in operation, longer maintenance intervals, and higher vehicle quality is a challenge. The subsequent reduction in vehicle volumes means that every visit, no matter how small, needs to be viewed as a vital opportunity. Many service directors are leveraging technology to be more efficient and profitable.
Technology in the service lane helps dealerships:
- Turn service customers into new vehicle sales customers
- Inspect every vehicle thoroughly to boost per-repair-order parts and labor profitability
- Hone customer-engagement processes to improve customer retention
- Conquest the service business from customers’ families and friends
New technologies in the service department have helped dealerships:
- Increase annual service revenues 21% and more
- Boost revenue per repair order $55 and higher
- Double the volume of vehicles inspected
- Increase fixed absorption rates 20%and more
- Sell up to 6 times as many vehicles out of their service drive
The ideas Holland will share are to help your service department create a plan for profitability despite today’s challenges in automotive services and repairs.
Attendees will learn five key actionable points:
1) How to develop a client retention strategy that builds trust between the dealership and the customer
2) How to develop processes that turn service customers into new vehicle sales customers
3) How to create follow up marketing strategies that engage customers who’ve declined recommendations
4) How to create a personalized service experience utilizing mobile technology
5) How to identify new opportunities and metrics to use to identify and remedy inefficiencies in service work flow.