How to reverse a decline in Customer Pay

Recalls and warranty work may be keeping dealership service departments busy these days, but it won’t last forever and may not be healthy for dealerships even now. Recalls don’t build customer loyalty and they crowd out customer pay and maintenance jobs, the real lifeblood of dealership service.

Giant Sonic Automotive Group, according to a report in Automotive News, “recognizes the problem and is working aggressively to reverse a decline in its customer-pay service revenue and gross profit that has been caused, in large part, by the surge in factory recalls.”

The big dealership holding company is recruiting hundreds of technicians to handle the customer pay work it hopes to generate and it is hiring and training service advisors in the use of maintenance menus to prime the pump for this hoped for gusher of customer pay jobs. The use of maintenance menus is an essential element in re-building customer pay volume:

To really make things happen, use your Online Service Menu program to automatically generate a customized Sales Presentation Booklet, specific to your customer’s make/model/year/mileage, and not only include the menu of services (with or without prices) but also the NEED for and BENEFIT of those services

 

…in a PDF format, it can be used a number of ways:

  • Pre-appointment preparation: include services that not only due now, but also past due
  • Customer presentation: pre-printed, and ready to use
  • Active delivery: email the upcoming services to a customer

As Automotive News says, “the changes are in response to a customer-pay revenue decline since the fourth quarter of 2014. In that quarter, Sonic’s customer-pay revenue fell 1.4 percent, while customer-pay gross profit slipped 2.1 percent. In the first quarter, customer-pay revenue fell 2.5 percent, and gross profit declined 3 percent.”

You have present it to sell it

Which brings us back to the question: With so much to recommend consistent presentations of maintenance menus, why do service advisors seem so resistant to the idea? It isn’t easy to express but from conversations we have had with advisors it seems the explanation is as simple as “I’m not use to doing it that way.” That’s an all-purpose excuse that works equally well for other worthy service drive processes like pre-writing repair orders to save time, vehicle walk-arounds, and the active delivery to set up the next service appointment. All great ideas but used only sporadically because “that’s not the way we’ve always done it.”

Rob Campbell, a dealership fixed operations consultant with The Mironov Group in Edison, NJ, tells a story about himself in an article for DealersEdge Service Manager: “When I was a sophomore in college I worked as an evening stock boy at our local Krogers grocery store. One lesson I learned was to pack the shelves with product, versus leaving the extra in the back.” As Rob’s manager explained, “No customer has ever wandered in the back storage area to buy something. Nobody can buy it if it isn’t on the shelf.”

Do you know what the number one reason why customer’s leave maintenance unperformed? They didn’t know it was needed – or least that is what they tell the folks who conduct the surveys.

You have to present the vehicle’s maintenance needs a 100 percent of the time to 100 hundred percent of customers.

Three tips to get started

  1. Make more presentations – The quickest and best way to increased maintenance sales (and bigger service advisor pay checks) is to increase the number of menu presentations you’re making. You would be better off recommending an oil change to 100 percent of customers, than pre-judging and offering a fuel injection cleaning to those few that are likely buyers.
  2. Don’t guess – Guessing is a gamble. When you gamble on a customer taking your advice, the odds shift in favor of them declining the service. And in today’s marketplace you don’t have enough cars coming through the door to take a chance on striking out on one. Here’s what we mean by guessing. A customer asks a question and we answer it without understanding the motivation for the question. We are guessing that the answer we are giving is the one that will help us. We don’t understand what is motivating the decision to buy. Therefore we guess. .
  3. Don’t pre-judge the customer’s needs. The problem, as suggested, is that too many service advisors begin to “pre-qualify” those customers who they think will be most willing to have recommend work performed. It just doesn’t work that way and that is bound to leave a lot of money in unperformed maintenance work on the table (and out of the advisors’ pockets.) Every customer must be made aware of the vehicle’s requirements and given an opportunity to make a purchase decision. Sure, you will people than simply saying no, but you will also hear more agreement than ever before – that is the very nature of advising people of their service needs