Like many car dealerships, Kelly Nissan was hesitant to sell cars from their already extremely profitable service drive.
So, they focused their advertising and marketing efforts on getting people to their sales floor – instead of those prospects that are already inside the dealership right now, getting work done on their cars. And, they were spending at least $400 to $600 per car sold on advertising.
Here Are the 3 Excuses Kelly Nissan Used to Explain Why They Weren’t Selling Cars from Their Service Drive…
Reason #1: They have tried selling cars from the service drive in the past- and it didn’t work.
When Kelly Nissan first thought about selling from the service drive, they rotated sales executives from the sales floor into the service drive. These sales executives who spent about 95% of their time on the sales floor failed to adapt to the service drive. They were using the same, pushy sales strategies that new car salesmen are known for on customers who came in specifically for maintenance or repairs and not to be sold to. That’s why their conversion rate from the service drive was less than one half percent.
When you have potential customers for a new car in your dealership for other reasons you can’t come across with a hard sell. You need to take a quality assurance process where you go over their account in full to ensure that their service needs are met. And, while you review their account, you let the service customers know about their options and how it can be saving them more money in the long run.
Reason #2 – They failed to get buy-in from both the sales and service departments
Many sales from the service drive efforts fail simply because there isn’t any buy-in.
Since the beginning, when car dealerships added a service drive to their dealership for additional revenue, the sales and service departments were always in two completely different silos:
- The sales department is responsible for bringing in new car sales from the sales floor
- The service department is responsible for bringing in additional revenue through maintenance and repair programs.
Part of this mentality is the fact that service managers get commissions on the services being performed – and they’re afraid that they’ll lose commissions if you turn a service customer into a “new car sale” customer. And, they’re afraid they’ll lose commissions if you turn service customers off because they’re not at the dealership now to get sold.
Car sales executives don’t buy-in to selling cars from the service drive because they know service customers are there for repairs and that the typical conversion rate from the service drive is one-half percent. Why would they want to be taken off the sales floor where they feel that they are more likely to close a customer on a new car deal?
Reason #3 – They were afraid to harm their CSI & SSI numbers
Because, the service drive is a profitable revenue center for Kelly Nissan (and for many car dealerships I speak to), they were afraid to try to increase car sales from the service drive. They rely on customers coming back on a regular maintenance schedule and they don’t want to push these customers away to other dealerships or mechanics.
Now, we showed Kelly Nissan real proof that they’d actually increase their CSI and SSI numbers by taking a quality assurance approach – and at the same time increase their new car sales from the service drive.
Here Are the Actions Kelly Nissan Took In Order to Sell 25 Cars per Month from the Service Drive
We challenged the Kelly Group to try our quality assurance approach with one of their dealerships – and see if they experience improved results from their service drive. With our guidance, support and technologies they:
- Created a team of quality assurance professionals who were given the tools to identify prospects in the service drive that should be in the market for a new car and trained in a personalized 8-step process that shows customers you are truly interested in meeting their service needs. Now, they were not just taking sales executives and putting them into the service drive just armed with data that they received from a data mining program.
- Integrated telemarketing, merchandising and consultative marketing strategies to help them gain a 4% to 5% closing rate. Their quality assurance reps would call the service customers and confirm their appointments plus using proven scripts, they’d let the customers know that they’d like to speak to them personally to go over their account and ensure that their service needs are met. At the dealership, customers find merchandise throughout the service drive that lets them know that the dealership is looking to buy “high quality cars.” Plus, the service customers receive a personalized letter from the GM that discusses in more detail how the dealership is looking to buy back cars. During the one-on-one session with a quality assurance rep, the customers go through a complete account worksheet to ensure that the dealership has the latest information on their account. From there the quality assurance rep can explain their options and show the savings they received.
- Kelly Nissan showed both the sales department and the service department how they BOTH will benefit from this quality assurance program. They showed their teams how it’s about improving the customer experience and how this will positively affect the whole dealership.
The Results Achieved…And Your Next Steps
By changing the way cars are sold from the service drive, Kelly Nissan is selling at least 20 to 25 new cars each and every single month from the service drive. These are additional sales that they would not have gotten otherwise.
Watch their video testimonial HERE
Now all of the dealerships are using the Service Turn technology to identify prospects within the service drive that should be in the market for a new car and they are using our 8-step quality assurance process. Instead of converting one-half percent of their service drive customers into new car sales – they have a 4% to 5% conversion.
During our next webinar for car dealers, service managers and sales managers, the former GM of Kelly Nissan will share with you in complete detail how he used the 8-step quality assurance process to get more car sales from the service drive.
Register for this free webinar now by clicking HERE!
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…
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.
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.