Remember when you could depend on warranty work to make your service department profitable? Or, when you could depend on customers coming in for service every three months or 3,000 miles for oil changes? There was a time when you didn't have to get aggressive or sell tires or worry about the competition or be open on Saturdays, but click your heels Dorothy, you aren't in Kansas anymore. The times have changed and you have to change with them or you will be left in the dust.
You know what I'm talking about. Warranty income is declining because cars are built better. Customer-pay repair work is falling. When was the last time you replaced a rusted out muffler or sold a set of shocks or struts? Now factor in that maintenance intervals are constantly being stretched, with 100,000-mile tune-ups and 50,000-mile coolant service recommendations from the factory. Synthetic oils and oil life monitors are pushing up oil change intervals as far as 10,000 miles or more. I have said this before - if the factory had their way they would weld the hood shut! The result of all this maintenance-free driving adds up to less service visits and less service income.
If that weren't bad enough, the competition has never been stronger! They're out in full force fighting for your customers. They're aggressive, competitive, convenient and convincing, and they are in prime locations with a mission to steal all of your customers. Count how many places you could go to have your car serviced on your way home tonight.
If you want to succeed in this business you have to beat the competition at their own game. You have to sell tires. You have to have low prices on oil changes and you have to be open and convenient. You have to give customers a reason to do business with you, and they will.
If you sell tires, and I hope you do, then you need to really get into the tire business. You need to look, smell, and feel like a tire store so when customers come in they will know you sell tires. Advertise it everywhere; the phone book under "Tires" is a good place to start. Put tires on all of your direct mail and tag your vehicle sales ads. We know that 75 percent of customers will buy all of their service work where they buy their tires, and we know that one out of seven customers that enter your service lane need tires. Plus, four out of five consumers will buy from the first person that tells them they need tires.
Offer a 20 percent low-price guarantee on tires. Tell customers to buy now with confidence and if they find the same tires for less within 60 days you'll pay them the difference, plus 20 percent. How much can it be? And when was the last time you went shopping for something after you already bought it? It doesn't happen, and if it does, give them the difference, plus 20 percent in the form of a credit for service. Do the math on how little that really costs you!
Next, when it comes to service traffic, the center point is your oil change price. It is the driving force that will make the difference between a traffic jam or tumbleweeds on your lane. Don't be afraid to get low and very aggressive on your oil change price. Something in the neighborhood of $17.95 will do the trick. Before you freak out, answer this question: how much do you make when the customers go somewhere else for service? You will undoubtedly have some customers that just come in for the low-priced, no-gross oil change. That's life. But you will also see repair orders that start out as oil changes turn into $1,000 tickets. Customers think you charge too much. Get low on the oil change and the services that customers have a perceived value on, and raise prices on repairs. It works, I've done it. Customers think that since your oil change and rotate and air filter are a great deal that everything must be a great deal.
Finally, let's talk about convenience. Are you open for business and convenient for your customers or just convenient for you? You have to be open early and close late if you want to attract customers to your store. I personally like a store to be open from 7 a.m. to 7 p.m., Monday - Saturday. It's easy for customers to remember, it's your niche, just like Wal-Mart being open 24 hours. Some dealerships are even starting to open Sundays from 1 p.m. to 5 p.m., and I say if the market dictates it, go for it.
Now, for all of you negative people who say you can't do enough business on Saturdays, I say this: go to a tire store or some other independent "convenient" shop and they will tell you that Saturday is their best day of the week. It's convenient for their customers, so they're open. One reason dealership service departments say they're slow on Saturdays is because all week customers are told to not come in on Saturday. Advisors use terms like half day, skeleton crew, parts problems, not enough time, etc. How many customers do you think would want to come to your store on Saturday and hang out with the skeletons anyway?
You have to be open all day Saturday. For those of you that want to cry about working too much, use shifts. The independents figured out how to do it, why can't you? Don't try to shortcut it to noon or 1 p.m. either. If you aren't open Saturdays all day you might as well close. Half-day Saturdays went out with the hula hoop and the 8 track. Service advisors and techs that work half-day Saturdays begin the morning telling customers that they can't get the job done because they close early. Way to go. The customer finally wants to give you a chance and you make him realize that he's made a mistake. We have to make it easy for customers to say yes and hard for them to say no to doing business with us if you want to succeed in the competitive world of auto service.
The bottom line: Now more than ever, you need every single service customer you can get. You have to get aggressive with your offers and your prices. You have to be open. You have to sell tires. And don't stop there. Train your service advisors on how to be service salespeople who know how to answer the phone, how to invite customers in and how to maximize opportunities by closing more deals on the drive. Become a Service Sales Manager - it's the most fun you'll ever have and the payback is awesome!
Randy R. Johnson is the founder and President of Car People Marketing, Inc., which provides customer loyalty and direct mail marketing solutions to increase the revenue and profitability of dealership service departments. He is a former owner of an independent repair shop, and was a fixed-ops director of 17 stores in Florida. He can be reached at http://www.carpeoplemarketing.com
