Phone:  800-580-0024

BG Products Industry News

From Fixed Operations News, to Sales & Marketing, to Sales Management, to Sales Strategies, to Customer Service - Our BG Products Industry News will help you with your operations.

Okay, Now What? Getting Customers Back to the Service Drive

car sanitizing

By Charlie Polston, Automotive Customer Retention and Profitability Consultant, BG Products, Inc.

America is once again open for business… sort of. The threat of catching the virus through person-to-person contact will be with us for some time, but savvy businesses are figuring out how to move forward.

I refuse to accept the current situation as the new normal, although, I must concede it is the ‘now’ normal. The issue is not reopening your service department (since 95% of you never shut down); the issue is getting customers back to the service drive.

The centerpiece of restoring your traffic revolves around customer confidence – a fragile perception that is easily lost. Specifically, I’m talking about vehicle owners having confidence that they won’t contract the virus after visiting your dealership. With that said, it doesn’t require much effort to instill confidence that you are going above and beyond to sanitize vehicles before returning them:

  • Advertise the sanitization procedures on your website and in any emails that you send to your customer base.
  • When your advisors or service BDC personnel proactively reach out, make sure they explain all that your team is doing to protect the vehicle owner’s health.
  • Tell them about your sanitization procedures when you set the appointment.
  • Remind them at the time of the write-up.
  • Let them see you sanitize their vehicle before delivery.

The sanitization process is simple. First, spray down all the hard surfaces like steering wheels, shifter knobs, and door handles. Next, disinfect and deodorize cloth seats, headliners, and seatbelts. Lastly, you kill the bacteria, viruses, mold, and fungi in the A/C system.

You complete the process by cleaning the key fob and putting it in a Ziplock bag.

The entire process takes just a few minutes, but like hand washing, social distancing, and covering your mouth when coughing – sanitizing vehicles must be a standard operating procedure. And again, remember that the customer needs to see you doing this. Perception is the key to restoring customer confidence. Allow me to illustrate.

Just before our governor shut down all the restaurants, gyms, nail salons, and barbers in our state, I was able to get Joni to squeeze me into her schedule for a haircut. I arrived in time to watch her finish up with the guy ahead of me.

He paid her in cash. She sprayed the money with disinfectant (both sides) before placing it in the cash register. Then, she began an elaborate process of spraying the chair, sink, counter, and hairdryer. Next, she washed her hands with the thoroughness of a surgeon.

She intentionally did all of this while I was watching. Realize, this happened at the height of the pandemic with dire predictions of death and devastation. I was deeply impressed with the extra effort she went through to protect my health. I’ve told the story countless times since then and my consumer confidence in her hair studio went sky high. (By the way, I gave her a 200% tip… it was worth it.)

I’m telling you, if you’ll get this sanitization-prior-to-automobile-delivery process in the fiber of your DNA (every car, every time) it will make a lasting impression on how customers view your shop. The word will spread, and your drive traffic will increase.

On a related subject, let’s talk about pent-up demand versus pent-up need. As America gets back to business there will be a pent-up demand for many goods and services. There’s a lot of pent-up demand for hair and nail salons, barbers (I went seven weeks and started looking like the neighbor’s dog), movies, and taking your sweetie out for a romantic dinner.

There’s pent-up demand for elective surgeries, dental work, business suits and dresses, hand soap, and toilet paper. Demand means that people know they have been denied these things for several months and they will buy it without any prompting at all. They want it!

To a lesser extent, there is some pent-up demand for automotive repair. If the car is broken, it must be fixed to reliably get to work. Demand will naturally bring a few vehicle owners to your dealership. They are forced to come to your shop to avoid disruption to their lives and their livelihood by having an unreliable vehicle.

But there is no pent-up demand for preventative maintenance. However, there is a tremendous pent-up NEED for preventative maintenance.

“If you’re waiting for pent-up demand to provide a post-pandemic revenue stream, you’re going to starve. But if you proactively pursue pent-up needs (needed preventative maintenance) the possibilities are endless – including increased CSI, retention, and profitability.

There is no demand for preventive maintenance, because while everyone knows they must fix their car when it breaks – no one knows what to do to keep their car from breaking. Therefore, we must point out what their car needs. We cannot passively wait for them to ask for preventive maintenance services (that will never happen.) We must proactively ask them to have those services performed.

Pent-up demand requires no salesmanship; people know what they want, and they demand it.

Pent-up need, on the other hand, requires a trained sales professional to point out the maintenance need, present the solution, and ask the vehicle owner to purchase it.

Two kinds of service advisors, technicians, and service managers will emerge as this national crisis fades.

The first group includes those that sit back and wait for vehicle owners to demand their cars be fixed. They will have low paychecks, low CSI, low retention, and bad attitudes. These folks watch things happen and hope for the best.

The other group consists of winners and leaders that proactively point out necessary maintenance to protect vehicle owners from costly, catastrophic failure. They’ll have satisfied customers that return to the dealership to spend more money. They’ll have higher paychecks and will be able to earn enough money to make up for any losses during the pandemic. These folks make things happen.

So, there are two kinds of people; those who make things happen and those who watch things happen. (Okay, I guess there’s a third kind: those who wonder what happened.) Which are you? *

Continue reading

Every Service Department Should Have a Salesperson Running It

sales

By Charlie Polston, Automotive Customer Retention & Profitability Consultant, BG Products, Inc.

“Every service department should have a salesman running it,” according to Don Hardcastle, service sales manager at Route 66 Chevrolet in Tulsa, Oklahoma.

Hardcastle is referring to himself and Fixed Operations Director, David Willard. Willard’s background is F&I sales, F&I sales management, and extended warranty sales. Hardcastle’s background includes a 20-year career in the Navy (with the last 10 years as a Navy recruiter,) automotive sales management, new car sales, and F&I sales management.

Note that neither of these guys have a service background – they have a sales background.

During his tenure as a Navy recruiter, Hardcastle was a master training specialist for sales psychology and philosophy. The job focused on teaching sailors how to sell the Navy as a career.

“They can feel the difference in power and performance after an air and fuel service, and they can see tread depth on the tires. All of these are tangibles that create emotion, and people buy on emotion.”

“Selling the Navy is an intangible – which is hard,” said Hardcastle. “But the challenge of selling an intangible taught me how to overcome objections and close the deal.”

Automotive maintenance services are tangible products, according to Hardcastle, if the salesman will just follow the sales process they will close the sale.

A customer can see the pollen, dust, and debris in the cabin air filter, they can feel the difference in power and performance after an air and fuel service, and they can see tread depth on the tires. All of these are tangibles that create emotion, and people buy on emotion. Hardcastle has put processes in place to help advisors educate customers in a way that leads to a sale.

Hardcastle continues, “Our job is to make customers aware of all their automotive needs according to what the technician noted in the maintenance inspection. Most people don’t know what their car needs; so we tell them and give them options. That is our sales process.”

The highest paid people in the world are professional salespeople.

As you consider adding a service sales manager to your service management team, you might want to consider the job description/to-do list that Hardcastle and Willard created from their vast sales experience

The Service Sales Manager Must:

  • Manage all aspects of the service drive
  • Manage cashiers, porters, and advisors
  • Have weekly mandatory sales meetings (at Route 66 Chevrolet that happens on Wednesday mornings for about 20 minutes)
  • Mentor, train, and coach the service sales team
  • Monitor daily sales results
  • Review every RO every day, looking for missed opportunities
  • Review every MPI to make sure advisors and techs are not only communicating but also working together for service sales growth
  • Make sure advisors are following policies for discounts and coupons
  • Make sure advisors are aware of the importance of preventative maintenance
  • Keep it fresh with sales goals and promo money to spark competition and to reward outstanding performance
  • Take a T.O. – that’s a variable ops term that means “Turn Over” – it is a technique used when an advisor hits a brick wall with the customer, and turns the customer over to the service sales manager to see if they can get the deal done.

Hats off to Willard, Hardcastle, and the service sales team at Route 66 Chevrolet. Thanks for showing all of us how it’s done!

Okay, so here’s a disciplined, no-nonsense, career military man; a quick-thinking, quick-talking, take-no-prisoners leader – wow, he must be tough to work for.

“I’m an easy guy to work for… if my service sales team will follow the processes I have put in place,” Hardcastle concluded. “If they follow the process, their sales closing ratio will increase, and they will make more money!”

“We have a performance-based pay plan,” Willard said, “and we do all we can by way of training, coaching, and mentoring to make sure our team has great sales success.”

Hardcastle and Willard are quick to point out that their mission is never to “get into customer’s pockets,” but rather to help vehicle owners lower their cost of ownership by having a safe, well-maintained vehicle. Maintenance is cheaper than repair.

Willard is a businessman who understands that you have to spend money (invest) to make money (return). Moving Hardcastle from the position of service lane manager (which was really nothing more than a glorified lead service advisor) to service sales manager was a big step. It added an extra salary to his service team – so there had to be some major improvements in revenue to justify the investment.

It’s paying off! They’ve jumped from 1.3 hours ($224) per RO to 1.9 hours ($339) per RO. Effective Labor Rate has climbed from $55 to $92. Very impressive! Service Absorption has grown from 48% to 78% and continues to climb. CSI and retention numbers are up, also.

With a service sales manager monitoring sales production, David can focus on technician production, conquering new fleet accounts, expanding the service BDC, and creating service marketing strategies.

Route 66 Chevrolet has actually done something other dealers just talk about: they drastically lowered the advisor-to-customer ratio to 1:10. That means each advisor sees only 10 customers a day. The strategy is to have more time with each vehicle owner so the MPI can be thoroughly reviewed with the customer. It allows time to educate the customer and give them options when purchasing maintenance and repair service.

According to Willard, the biggest mistake service managers make is hiring the wrong people as advisors. “It’s a sales position,” Willard emphasizes, “you have to look for people with a sales background – or those wanting to begin a sales career.”*

 

https://www.digitaldealer.com/sales-variable-ops/every-service-department-should-have-a-salesperson-running-it/

Continue reading

Value Is Important… So Are You Charging Too Much?

servicing

By Charlie Polston, Automotive Customer Retention & Profitability Consultant, BG Products, Inc.

Customers in your service department say that value is their top priority. Does that mean you’re charging too much; that you need to lower your prices; or that customers want cheap service? No! No! No! 

The Cox Automotive Service Industry Study, after interviewing 3,500 dealership service customers, found vehicle owners want a good return on the vehicle maintenance and repair dollars they invest, and that is the definition of value. You get what you pay for; cheap isn’t good and good isn’t cheap. 

There is this crazy wrong impression that dealerships charge too much for service work – way more than anyone else does. It just isn’t so! For example, Cox found the average dealership oil change to be $61, while the quick lube average was $60, and tire stores and repair chains averaged a whopping $75 – for an oil change. 

Fact: Quick lubes, tire stores, and auto repair chains do millions more oil changes than dealerships. 

Fact: Their average oil change price is the same or much higher. 

Conclusion: Cheap price is not a huge motivator – but value is. 

Quality, convenience, and trust rounded out the top four customer priorities – in that order. I find that very interesting because a great definition for value is quality (skilled technicians and precisely engineered parts), convenience (reasonable wait times, loaner or rental cars, shuttle, and streamlined drop-off and pick up), and trust (keeping your word, following through, and showing transparency). 

Speaking of convenience, the study revealed the threshold for wait times was 2.4 hours. Customers that spent less than 2.4 hours at the dealership gave a CSI grade of “very satisfied.” There is this crazy notion in the collective fixed ops mindset that says we have to get them out in 30-45 minutes. 

This rush to push customers out the door is a great excuse to squash any service up sales. In their quest for speed, many advisers never discuss needed maintenance with the customer – or if they do, it is discussed in terms of “do it later.” My friends, never put off until tomorrow the labor that you need to sell today! Strike while the iron is hot – ask vehicle owners to buy tech-recommended, needed maintenance – right now. Your shop can get any fluid maintenance service, filter exchange, or fuel service done in an hour, and the Cox study says the consumers will give you the time. 

I realize this is an article about value but indulge me for a few more paragraphs about time and convenience. If you review the multi-point inspection with customers no longer than 25 minutes into their wait time, then odds are you can buy more time. Most people would rather spend an extra hour at your dealership today, than try to figure out a time to come back, fight traffic, and go through the inconvenience later. For heaven’s sake, ask for the additional tech-recommended maintenance and repair business – ask for it today! 

The reality is if you don’t sell it today, you never will. 

Oh, and by the way, the dealership will make more money doing repairs and maintenance services than oil changes – and so will managers, techs, and advisers. 

Remember, you do oil changes to retain customers so you can sell maintenance services to make money. 

By the way, that’s value. Your dealership becomes their one-stop service shop for all their automotive transportation needs. 

Your labor rate is probably somewhere around $125 per hour – wow, that’s a lot of money; or is it? Bob Greenwood says shops are, in reality, knowledge-based businesses. Your shop manages productivity through billed hours, which come as a result of selling your knowledge. Greenwood, president and CEO of Automotive Aftermarket E-Learning Centre, LTD., goes on to say that the automotive industry is all about competency – and competency is reflected in the labor rate. That’s value! 

Doctors, lawyers, nutritionists, CPAs, college professors, and automotive technicians are all paid in the same manner – according to their knowledge and competency! 

Earlier this summer, I bought a 14-year-old four-wheel-drive SUV so my wife and I could access two of our favorite fishing holes. It was in great shape, but it had a flutter, a stumble at about 40 mph. It annoyed me beyond measure. The shop diagnosed it as a transmission issue; yet $400 later the problem persisted. Then I went to one of the most expensive places in town. Ninety seconds into the test drive the technician diagnosed a misfire. Problem solved. 

Additionally, they found my alternator was on its deathbed. I can’t tell you how much safer I feel taking my sweet wife of 34 years into these remote locations to catch bass. (She usually catches more than me.) I paid more for the right diagnosis and cure – and it was worth it. That’s value. 

Let me make one final point. Value is not automatically perceived by vehicle owners; it has to be sold. It may well be your most important sale.

Make sure your advisers keep “telling your story” and that they explain the credentials and certifications your techs have earned. That’s how you build value. Examples of this might include: 

  •  “Our techs have a combined 10,500 hours of training.”
  •  “Collectively our guys have over 295 years of experience working on Fords.” 
  •  “We’ve invested over $150,000 in diagnostic tools, equipment, technology and software to assist our techs in quickly getting to the cause and cure.” 
  •  “Our maintenance technicians are fully certified to perform all necessary fluid exchange services.” 

Customers demand value, and your service department provides it! Happy value sales to you! 

(My special thanks to Jim Phillips of Cox Automotive for permitting me permission to quote from the Service Industry Study.)*

 

y Charlie Polston, Automotive Customer Retention & Profitability Consultant, BG Products, Inc.

Customers in your service department say that value is their top priority. Does that mean you’re charging too much; that you need to lower your prices; or that customers want cheap service? No! No! No! 

The Cox Automotive Service Industry Study, after interviewing 3,500 dealership service customers, found vehicle owners want a good return on the vehicle maintenance and repair dollars they invest, and that is the definition of value. You get what you pay for; cheap isn’t good and good isn’t cheap. 

There is this crazy wrong impression that dealerships charge too much for service work – way more than anyone else does. It just isn’t so! For example, Cox found the average dealership oil change to be $61, while the quick lube average was $60, and tire stores and repair chains averaged a whopping $75 – for an oil change. 

Fact: Quick lubes, tire stores, and auto repair chains do millions more oil changes than dealerships. 

Fact: Their average oil change price is the same or much higher. 

Conclusion: Cheap price is not a huge motivator – but value is. 

Quality, convenience, and trust rounded out the top four customer priorities – in that order. I find that very interesting because a great definition for value is quality (skilled technicians and precisely engineered parts), convenience (reasonable wait times, loaner or rental cars, shuttle, and streamlined drop-off and pick up), and trust (keeping your word, following through, and showing transparency). 

Speaking of convenience, the study revealed the threshold for wait times was 2.4 hours. Customers that spent less than 2.4 hours at the dealership gave a CSI grade of “very satisfied.” There is this crazy notion in the collective fixed ops mindset that says we have to get them out in 30-45 minutes. 

This rush to push customers out the door is a great excuse to squash any service up sales. In their quest for speed, many advisers never discuss needed maintenance with the customer – or if they do, it is discussed in terms of “do it later.” My friends, never put off until tomorrow the labor that you need to sell today! Strike while the iron is hot – ask vehicle owners to buy tech-recommended, needed maintenance – right now. Your shop can get any fluid maintenance service, filter exchange, or fuel service done in an hour, and the Cox study says the consumers will give you the time. 

I realize this is an article about value but indulge me for a few more paragraphs about time and convenience. If you review the multi-point inspection with customers no longer than 25 minutes into their wait time, then odds are you can buy more time. Most people would rather spend an extra hour at your dealership today, than try to figure out a time to come back, fight traffic, and go through the inconvenience later. For heaven’s sake, ask for the additional tech-recommended maintenance and repair business – ask for it today! 

The reality is if you don’t sell it today, you never will. 

Oh, and by the way, the dealership will make more money doing repairs and maintenance services than oil changes – and so will managers, techs, and advisers. 

Remember, you do oil changes to retain customers so you can sell maintenance services to make money. 

By the way, that’s value. Your dealership becomes their one-stop service shop for all their automotive transportation needs. 

Your labor rate is probably somewhere around $125 per hour – wow, that’s a lot of money; or is it? Bob Greenwood says shops are, in reality, knowledge-based businesses. Your shop manages productivity through billed hours, which come as a result of selling your knowledge. Greenwood, president and CEO of Automotive Aftermarket E-Learning Centre, LTD., goes on to say that the automotive industry is all about competency – and competency is reflected in the labor rate. That’s value! 

Doctors, lawyers, nutritionists, CPAs, college professors, and automotive technicians are all paid in the same manner – according to their knowledge and competency! 

Earlier this summer, I bought a 14-year-old four-wheel-drive SUV so my wife and I could access two of our favorite fishing holes. It was in great shape, but it had a flutter, a stumble at about 40 mph. It annoyed me beyond measure. The shop diagnosed it as a transmission issue; yet $400 later the problem persisted. Then I went to one of the most expensive places in town. Ninety seconds into the test drive the technician diagnosed a misfire. Problem solved. 

Additionally, they found my alternator was on its deathbed. I can’t tell you how much safer I feel taking my sweet wife of 34 years into these remote locations to catch bass. (She usually catches more than me.) I paid more for the right diagnosis and cure – and it was worth it. That’s value. 

Let me make one final point. Value is not automatically perceived by vehicle owners; it has to be sold. It may well be your most important sale.

Make sure your advisers keep “telling your story” and that they explain the credentials and certifications your techs have earned. That’s how you build value. Examples of this might include: 

  •  “Our techs have a combined 10,500 hours of training.”
  •  “Collectively our guys have over 295 years of experience working on Fords.” 
  •  “We’ve invested over $150,000 in diagnostic tools, equipment, technology and software to assist our techs in quickly getting to the cause and cure.” 
  •  “Our maintenance technicians are fully certified to perform all necessary fluid exchange services.” 

Customers demand value, and your service department provides it! Happy value sales to you! 

(My special thanks to Jim Phillips of Cox Automotive for permitting me permission to quote from the Service Industry Study.)

Continue reading

So Many Used Cars, So Little Time

used cars

Dealership service departments have a great opportunity to increase traffic on the drive by pursuing recent used car buyers—those who bought from your dealership and those who bought elsewhere.

First, let’s look at the statistics (according to Lang Marketing):

 Almost a million vehicles were lost in 2017 due to hurricanes Harvey and Irma, creating a surge in demand for new and used vehicles.

 There were 42.4 million used cars sold in 2017; that’s up over two million units from 2014 when 40.3 million used cars were sold.

 The average age of used vehicles sold in 2017 was 4.5 years old. That is down from five years old not too long ago. (Newer vehicles typically bring higher prices, which may explain the next statistic.)

 The average sales price for used cars in 2017 was $19,500. That’s $1,400 more per car than in 2010 when the average sales price was $18,100.

Jim Lang of Lang Marketing makes the following observations:

“Higher used vehicle prices are generally positive for the aftermarket since they make it easier for consumers to justify investing in the repair and maintenance of older vehicles. Higher used vehicle prices also raise the value threshold for scrapping cars and light trucks, thereby keeping older vehicles on the road longer.”

So, as prices go up, many consumers are motivated to not only keep their old car but to spend some money on it to make it last a few more years. Yea! But the sobering fact is most vehicle owners aren’t spending that money at their local dealership; rather, they are heading to the aftermarket.

You’re okay servicing older vehicles in your shop, right? And you’re okay servicing any make or model, right? If you’re an import store that sold an F-150 pickup off your used car lot, then you’re okay having that vehicle serviced in your shop, right?

Most independent garages and franchised aftermarket shops are ready, willing, and able to work on anything. I’m suggesting your dealership should be, also.

There are 267 million cars on the road in the United States and that’s increasing every year. Combine that with the fact that the number of service bays are declining every year and you have the perfect opportunity for fixed ops growth…if you pursue it.

Action Point #1: First, let’s look at the low-hanging fruit. I’m talking about being intentional in retaining your pre-owned car buyers—making them lifetime service buyers. I see a plethora of new car retention programs designed to keep consumers loyal, but rarely do dealers aggressively pursue their used car buyers. That’s tragic and doesn’t make good business sense.

The action point is to give your used car buyers access to all of the retention programs available to your new car buyers. Things like “Engines for Life,” lifetime warranties, complimentary roadside assistance for life, and scores of other incentives to keep them coming back.

But you can’t stop there. Customer loyalty in and of itself won’t make you any money. You can’t deposit loyalty in the bank. Forgive me for stating the obvious, but you can only deposit money in the bank, and the only way that will happen is when the service advisors sell something!

Don’t assume your advisors understand the big picture. Take the time to have a service sales meeting and lay out your two-fold used car buyer retention strategy:

1: Get them back on the service drive.

2: Sell tech-recommended services to keep their cars trouble-free and fun to drive…and to keep them coming back!

Action Point #2:
Secondly, equip your advisors with word tracks that are brief and easy to learn. For example, if you implement some type of lifetime engine warranty on all of your used cars, you might coach your advisors to check vehicle history and say, “Mr. Customer, I see you are already enrolled in our Engines for Life Program. In order to keep your coverage intact, you would want our performance oil change package, right?”

Or you might have them say, “All of our pre-owned vehicles come with Lifetime Roadside Assistance as long as you choose our “better” or “best” oil service. Which one of the oil change packages best meets your driving needs?”

The intent here is to give your advisors an opening sentence—a proven phrase that will “get them started” on the road to a sale. Most professional advisors can take it from there if you can just give them a starting point.

Action Point #3: Lastly, proactively reach out to “lost souls”—vehicle owners that haven’t been on your service drive in over a year. Most folks have their oil changed twice a year, so if you haven’t seen them in that amount of time, they’ve defected to the aftermarket. Oh, you’ll see them again if they have a catastrophic failure that’s covered under warranty, but for routine maintenance, you’ve lost them.

Go get them back! How about a car care clinic on a Saturday morning? Make it a grand party with hot dogs and those inflatable bounce thingies for the kids. All fixed ops personnel will be needed, from “A” techs to lube dudes to porters. The centerpiece of the event is a free multi-point inspection performed on every vehicle.

Granted, it’s a lot of work, but if you regain 20-30 lost customers, it’s a great success. Plus, you’ll sell lots of labor hours simply by having your techs get their hands and eyes on every vehicle.

So many used cars, so little time. Go start rounding them up. It’s worth it! My personal thanks to Jim Lang of Lang Marketing. For more information on the Lang iReport, you can visit langmarketing.com.

Continue reading