BG Products Industry News

The primary purpose of a professional service advisor is to sell service, or as Scott Russeau puts it, “inspire your guest to invest!”

Earlier this year, I attended one of Russeau’s energy-packed workshops. (Okay, it wasn’t a workshop as much as it was a workout!) Russeau is passionate about giving dealership customers a positive, consistent, predictable service drive experience—one that focuses on educating customers and inspiring them to invest in themselves by investing in their cars.

Before we unpack the process, let me tell you a little bit about the man. Russeau, a high-performance fixed ops trainer and coach is as comfortable on the service drive as he is in the classroom. His credibility comes from experience: in the trenches as a technician, on the front lines as a service advisor, in leadership as a fixed ops director, and at the top as a general manager. He gets it, because he’s done it!

Here are five takeaways from the workshop that, if implemented, will have an immediate impact on your service sales success and hence, your bottom line:

Inspire Your Guest to Invest

Inspire – Not pressuring, not begging, not arm twisting, but clearly educating, communicating, offering, and asking. A guest who is inspired takes action; they purchase.

Guest – An honored, unique person that invested their time and energy to enter your service center. “Of all the places they could have taken their car, literally thousands of service centers across America, they chose you,” Russeau said.

Just like a guest in your home, folks on the service drive deserve your highest respect and your undivided attention. You’ve got to treat them like family. They are why you came to work; without them, you are out of business.

Invest – Informing your guests about their vehicle needs and selling tech-recommended service is not something you do to your guests, it’s something you do for them. When they invest in brake pads and a brake fluid exchange, they receive increased safety and stopping reliability in return.

Inspiring your guests to invest in their vehicle is done for the benefit of your guests. They get a greater blessing by having a safe, reliable, trouble-free vehicle that gives power, performance, and that is fun to drive. And don’t forget about saving money. Maintenance is always cheaper than repair, and fuel economy is best when a vehicle is well-maintained. What a great return on their investment!

As an automotive professional, you are in business to make money. So here’s the win-win: the more tech-recommended maintenance and repair that you sell, the more money you make—and the more money your guests save.

System Selling

Russeau warned against offering service a la carte when presenting an estimate. Don’t quote a left outer tie rod for $200 and an alignment for $100; rather quote the suspension “system” repair for $300. You wouldn’t do one without the other, so keep it simple and quote it that way.

“You’re not selling parts (the rods) and labor (time),” Russeau said, “You are selling safety, peace of mind, a smoother ride, reliable vehicle control, and driver confidence.”

Package Pricing Technique

This is similar to system selling, but it is a comprehensive price quote that includes the primary concern and related items, immediate safety needs, and recommended maintenance. The process is used when organizing and presenting the results of the multipoint inspection to the customer.

First, the advisor organizes the tech recommendations into three categories: primary and related concerns, immediate needs, and recommended maintenance. Next, he reviews each item with the customer. Lastly, he quotes one price for the entire package.

If the customer says yes, you communicate with the tech and he gets to work. If you get hit with a price objection, then “sell up” (read on).

The Sell-Up Process

The priorities are:

1. Primary and related concerns

2. Immediate safety needs

3. Recommended maintenance

Sell up (from bottom to top) means you might drop recommended maintenance from your price quote, but then you would move related maintenance items up to item #1. For example, if the primary concern was hot air blowing out of the A/C, you would move cabin air filter replacement from the recommended maintenance category up to the primary concern category because it is a related item.

Likewise, if the technician finds a weak, corroded battery, then battery replacement becomes an immediate safety concern. Therefore, you would move battery protection pads and terminal cleaning up from the recommended maintenance category to the immediate safety needs category because it is related to the safety concern.

To clarify, let’s say our original quote included a cabin air filter, a battery service, an alignment, and a transmission fluid exchange in the recommended maintenance category. By selling up, you still get the cabin air filter and the battery service, even though you drop the other maintenance items. The package price drops and yet you still retain two services you would not have had if you hadn’t sold up.

Related, Immediate, Maintenance (RIM)

The RIM process has been around for decades, but Russeau’s twist on the process brings a fresh approach to RIM…with amazing results. I’ll fully explain RIM in detail in a future article. For now, I want to leave you with a simple yet effective word track Russeau has crafted to “inspire your service guest to invest.”

“Related to your original concern(s) for your vehicle, your technician has found that your vehicle needs…”

“From the multi-point inspection we discussed earlier, we found a few items that require your immediate attention.”

“Last but certainly not least, your technician has asked me to talk to you about the following maintenance needs…”

“So to take care of everything related to the original concern, all the items that require immediate attention and your maintenance needs, your total investment is $____. May we please take care of that for you today?”

‘Tis the season to be of good cheer, and fixed ops departments have much to celebrate. The future for dealership parts and service departments is very bright. In fact, there has never been a better time in history to be in fixed ops than right now—and I’ll prove it to you.

Vehicles in Operation Increasing

There are more vehicles on the road today in the U.S. (over 273.7 million) than ever before in history. Compare that to 202 million vehicles in 2001; that’s growth of 71 million vehicles. Every year we manufacture more cars than we scrap, so the vehicle population continues to rise with no end in sight.

Service Centers Declining 

Today there are 225,000 service centers in the U.S. compared with 245,000 in 2001. That’s 20,000 fewer places to have cars and trucks serviced, repaired, and maintained. Sadly, about 4,000 of those shuttered service centers were dealerships. (From 21,900 in 2001 to 17,800 today.) So let’s put these two statistics together: 71 million more cars and 20,000 fewer places to have them serviced. Wow, what an opportunity. The “supply” of service centers is dropping and the “demand” of cars on the road is increasing; therefore, your service department has greater value today than it has ever had.

More Money Spent

Last year U.S. consumers spent $252 billion on customer-pay maintenance and repair. That’s up from $199 billion in 2006—a $53 billion increase in 12 years. We are in a growth industry. Okay, let this sink in; $53 million more is being spent at 20,000 fewer service centers. Wow. Did I mention the future is bright?

Dealership Getting Bigger Share

Of the $252 billion spent on vehicle maintenance, only $37.4 million was spent at dealerships. The sobering news is that number represents only 15% of the total. (100% of all cars were purchased at dealerships, yet only 15% of service dollars were spent at dealerships.) The good news is that dealers gained market share (from 14% to 15%) in the past year, which represented several billion dollars in growth.

As a sidebar, the $37.4 billion dealers collected from customer-pay maintenance and repair represented $20 billion in labor and $17.4 billion in parts. That means the parts-to-labor ratio was .87:1, which is a very, very good number and shows dealerships are starting to grasp the importance of performing preventive maintenance service.

Unperformed Maintenance Dropping 

Speaking of preventive maintenance, here is the most promising statistic from last year: unperformed maintenance dropped from $73 billion to $55 billion; that’s the lowest it’s been in over a decade. Obviously, the less unperformed maintenance, the less service money that was left on the table. The only way to recapture unperformed maintenance dollars is to perform more preventive maintenance services—and the only way to do that is by asking the customer to purchase needed, tech-recommended maintenance.

Seeing unperformed maintenance services on the decline indicates that service managers and advisors are starting to get it and it is paying off.

Time out. I’ve given you five indicators of great growth opportunities in the automotive industry. So, how is your service department doing? Are you experiencing the prosperity and growth in your shop? Is your personal income going up? Are you crazy busy all the time?

Or are your techs running out of work at 3:00 p.m.? Is your shop efficiency under 100%? Are your hours per CPRO under 2.0 hours? Are you saying, “what prosperity?”

If so, help is on the way. In 2019 I’ll be writing a series of articles centered around creating a sales culture in the service department. You can’t save your way to prosperity, you must sell your way to prosperity. The only way to grab your share of the $252 billion preventive maintenance pie is to ask for it. In 2019, I’ll show you how.

Statistics Sources:
AASA Status Report, NADA DATA, Lang Marketing Annual Report, and Auto Care Association Fact Book

Every year the number of higher mileage older vehicles increases. And every year dealership service departments lose more market share.

Vehicle owners almost always defect to the aftermarket as their vehicles get older and accumulate more miles. What’s worse is that many service managers, advisors, and technicians just shrug their shoulders and let them go. They accept this defection as a fact of life; “it’s always been this way and it always will be,” they think.

This negative thinking is so pervasive that it becomes a self-fulfilling prophecy. They expect the customers to take their service business elsewhere, and they do!

This has got to stop.

Unless you are crazy-busy all the time, you need to hold on to aging vehicles and reach out to those who have already forsaken you. It’s not like you’re being greedy…you just want it all!

The Opportunity

Look at this graphic: the opportunity is huge—and increasing every year.

Older Vehicles

The average vehicle on the road is 12.2 years old. That’s 20% older than a decade ago. Think about that; it means half of the cars on the road are over 12.2 years old. Older vehicles need more maintenance and repair.

„Higher Mileage

The average vehicle on the road has accumulated mileage of 120,500 miles—roughly 10,000 miles annually. That’s up slightly from 2013 when accumulated mileage was 115,000 miles. Higher-mileage vehicles need more maintenance and repair.

„ Vehicles in Operation

There are 24 million more cars on the road than there were 10 years ago—273 million vehicles. I’ve been tracking this number for almost four decades and it goes up every year. Lots and lots of older vehicles with higher mileage need lots and lots of maintenance and repair.

„ Domestic vs Import

In 2007, domestic vehicles made up 66.7% of all the vehicles on the road…today it has dropped to 54.4%. Conversely, import vehicles on the road have risen from 33.3% in 2007 to 45.6% today. In a few years, imports will have the largest share of the American fleet.

Okay, so what? There are a lot more domestic dealers than import dealers, so domestic service departments need to be ready. If you are a RAM dealership, realize that you might have a BMW sports car in the service bay next to a Cummins diesel pickup. The core maintenance services on these two vehicles are remarkably similar and don’t require special tools, fluids, or parts.

Action Points

Why not create a business within a business? I’m talking about a “garage” in your service department. This is really not a radical concept, because you probably installed a “jiffy lube” in your shop years ago.

Now it’s time to install a garage that works on all makes, all models, all years, all mileages…the higher the better. Just start with one or two techs. They don’t have to be OEM factory certified A-level techs (which are getting harder and harder to find). There is a bigger pool of competent, hard-working, B- and C-level techs that might jump at the chance to work in your shop.

You might want to consider a simplified maintenance menu and create a marketing piece inviting customers to bring their “other car” to your shop.

Ask the parts department to provide estimates that give vehicle owners an aftermarket option on replacement parts. They’ll likely retail for 30%-50% less and the profit margin might be greater. (I’m sure this idea will cause some of you heartburn; but remember I’m talking about older, higher-mileage cars). If they defect to an aftermarket shop, they won’t be using OEM parts. Obviously, your profit drops to zero when customers defect.

You can do this…at least give it a try. You sold them the car, it ought to be yours to service…for life!

Breaking News: You take more money to the bank grossing $0.70 per dollar than you do grossing $0.02½ per dollar!

According to the NADA DATA report released earlier this year, the average new car gross is 2 ½% and it’s been dropping every year for almost a decade. Service labor gross, on the other hand, has consistently been at 70% gross for as long as I can remember.

So, why do dealers and general managers work so hard chasing 2 ½% gross while largely ignoring 70% gross? I genuinely don’t understand. I’m serious; if you know the answer, please email me at This email address is being protected from spambots. You need JavaScript enabled to view it. and I’ll include it in a future article.

I want to be clear: I am not suggesting dealers diminish their efforts to sell new and used cars, nor am I downplaying the importance of variable ops. I’m just saying that, as an owner or general manager, if you would devote some of your time, talent, business savvy, sales experience, and leadership to fixed ops, the financial impact to your bank account would be remarkable.

Let’s look at the numbers to back this up:

NADA says the average car sells for $34,670, so at 2 ½%, that’s $867 gross profit. According to yourmechanic.com, Lang Marketing, and many other sources, consumers spend $9,000 during the first 10 years of ownership to maintain a car. If you figure a parts-to-labor ratio of 1:1, a labor gross of 70%, and parts gross of 35%, then that is $4,750 gross profit. That’s $475 gross per year. Granted, in the early years, a vehicle needs less maintenance than it does later in life. (Yourmechanic.com estimates the first year of maintenance to be $150 with each year increasing $150…hence the second year is $300, the third year $450, etc.)

The cynic would say, “Hold on, Charlie, by the time the vehicle owner starts spending serious money on maintenance, they have long ago defected to the aftermarket.”

This is unfortunately true in many dealerships, but that’s why retention is so important—even the OEMs see the long-term value of retention and include it as a key performance indicator in evaluating a dealership’s overall health (more on this topic in a future article).

Recapping the main point, the average new car sale produces a one-time gross profit of $867…once. The average service customer produces a recurring annual gross profit of $475…every year. (Note: The average age of vehicles is 12.1 years. Wow!)

The only way to capture that recurring service gross is to sell preventive maintenance. Here are some items for your next service sales meeting. (It will have even more impact if the dealer or general manager attends the meeting.) Consider the following sales training topics:

„ Eric Twiggs, a training coach at ATI, says one of the most important things in sales is attitude…not the attitude of the customer, rather the attitude of the advisor. For example, if the service advisor perceives that his customers all live hand-to-mouth and can barely afford basic necessities, then his attitude causes him to never offer tech-recommended services.

Twiggs says an advisor must realize that his perceptions are not always the customer’s reality.

In other words, teach advisors to set their perceptions aside and lay out all the technician-recommended service and repair. Don’t over-think this; just review the multi-point inspection form and the estimate with the customer and ask them to buy.

„ Twiggs goes on to warn about confirmation bias. This was a new term to me, but it means using a singular event to confirm what you already believe—even though the evidence doesn’t support your conclusion.

For example, if the advisor believes your services are over-priced and thinks, “Oh, brother, I’d never come here for service work,” then the first time a customer questions the price, it confirms his wrongly-held belief.

I have seen this happen to many advisors and they just shut down. Their thinking goes something like this: “Yep, I knew our prices were outrageous…nobody in their right mind would pay this kind of money.” The result is they become spineless order takers.

„ Don’t sell your own wallet. This happens daily on the service drive. An advisor knows his wallet is getting pretty thin, and it’s still four days until payday. Since he can’t afford $750 for an AC compressor, he assumes the customer can’t either. His perception is not the customer’s reality, but his attitude kills the deal and the sale is lost.

„ Zig Ziglar said it best, “Your attitude more than your aptitude determines your altitude!” Amen. Savvy managers help their advisors maintain the right attitude toward the dealership and toward the customers. Management must continually remind fixed ops personnel that selling preventive maintenance is a high calling and a noble mission.

These concepts are profound because of their simplicity. Fifteen-minute service sales meetings once a week will help your advisors maintain the right sales attitude. I know dealers spend a lot more time training their new and used car sales team—chasing a 2 ½% one-time gross. Surely 15 minutes a week is time well spent—chasing recurring 70% gross.

This got me to thinking about my wardrobe; who’s making the most money on my clothes, the menswear department at Macy’s or my local dry cleaners? My shirts are very traditional—long sleeve with button-down collars. I can usually catch the brand I like on sale for $50 per shirt. My dry cleaners charge $2.65 per shirt and I take them in about 20 times per year—that’s $53 annually.

To recap, the retailer makes $50 one time, but the dry cleaners make $53 recurring annually. Frankly, I don’t know how long I keep my shirts, but I bet it’s somewhere around three years.

Conclusion: There’s a lot more money to be made servicing cars (and dry cleaning shirts) than there is selling cars (and selling shirts)! Car dealerships do both. (When I say both, I’m referring to sales and service—however, if you want to add dry cleaning, I’ll take medium starch in my shirts!)