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Retail Remedies: Service department intro an important part of the sale

May 31, 2011
Filed under Dealer Consultants

These articles recap some of the opportunities uncovered by our GSA powersports consultants during actual consulting visits. These are followed by recommended actions that address these opportunities. Our goal is to provide you with ideas to help improve your dealership.

Dealership

This dealership has been in existence for many years. It has changed locations several times to accommodate expansion and improve access to the targeted market. The current high-quality facility is fairly new and has excellent visibility and access to the public. The primary building is more than 50,000 square feet and has room for additional expansion.

Family members run most of the operation in this multi-line, 1,000-unit store. It is located in a large metro market that contains a number of highly competitive, large dealers. Although the dealership has many of the major product lines, it is trying to acquire additional key brands. The lines have become available due to recent dealership failures in this market.

Service Department Overview

The newly appointed service manager has been with the dealership for many years. He has experience in many areas of dealership operations. He has a positive attitude toward this position. When asked why he wanted to be the service manager, he replied that he really enjoys it. He has degrees in business management and economics, but lacks experience in this position.

Service department training was provided in the following areas:
■ Service department benchmarks and performance measurements
■ Menu pricing benefits, structure and display
■ Service department marketing and promotion
■ Using a reception checklist to increase sales and customer satisfaction
■ Maximizing and measuring technician time
■ Proper use and tracking of repair orders
■ Managing comebacks
■ Customer relations management
■ Personnel management and motivational factors
■ Merchandising the service write-up area
■ Proper service follow-up

In addition, basic sales training was provided to the service writers.

Monitoring negative website reviews and responding to them quickly and in public is vitally important. They need to establish a goodwill budget and guidelines for handling angry customers.

The service department is actually in much better shape than the numbers would indicate. Paying service writers incentives to sell parts (which should be done by parts employees) and providing discounts to sales means the department profitability and expense numbers are way off. In addition, many of the hours that the techs are spending on internal labor have not been tracked or charged to the appropriate departments.

The shop is clean and very well organized with efficient access to benches, power and air. There are at least two lifts for each tech, and most have three lifts. There are separate tool and tire changing rooms.

There is no follow-up after service. This could be done by mail or email, but a phone call from a neutral party within 72 hours of pick-up works very well. It is essential to uncover and address smoldering issues before they become fires.

There is little effort being made to schedule first services at the time of the new unit sale. First service returns are not being tracked or measured. This is a great opportunity to bring customers back to the dealership for additional sales in all departments. Customers should be introduced to the service department following the unit sale and an attempt should be made to schedule the service. Discount coupons (parts only) might provide additional incentives.

Action Items

■ Ensure that there is an RO for every task performed by a tech and that it is billed properly.
■ Charge retail for all interdepartmental billing. This is necessary to ensure level-field comparisons with industry and 20-club benchmarks.
■ Implement a minimum shop charge.
■ Utilize a reception checklist to increase sales and customer satisfaction during the write-up process.
■ Put all processes in writing.
■ Become familiar with all state laws that affect RO authorizations and OE warranty reimbursements.
■ Expand service menu offerings. Consider using a flat screen TV with a display of the menu selections.
■ Build value for service labor by posting tech photos, diplomas, certificates and bios to the wall in the service write-up area.
■ Inventory special tools periodically. Provide a check-out/check-in sheet to track their location.
■ Follow up with service customers — phone, email or mail within 72 hours of delivery.
■ Create seasonal clothing & accessories displays in the service write-up area to promote more sales.
■ Track first service returns. Implement programs to increase the percentage.

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