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Service departments get creative

August 31, 2012
Dealers are using creative ways to mine for more service business from today’s aging vehicle fleet.
The market for older, higher-mileage vehicles will grow and remain strong until at least 2015, data-cruncher R.L. Polk predicts.
Owners keep their vehicles longer than ever today: an average 71.4 months when bought new and almost 50 months when bought used. The average car on the road is nearly 11 years old. Those longer ownership periods present opportunities for dealership service departments.
“The aging fleet — our average service customer has 65,000 miles on his vehicle — is a two-fold opportunity for us, both in service and sales,” says Robbie Long, fixed-operations director at Raymond Chevrolet-Kia in Antioch and Ray Chevrolet-Suzuki in Fox Lake.
Long has put in place several new ideas to win more customer-pay business. For example, she began offering second-tier parts pricing through General Motors’ aftermarket parts programs to make her shops more competitive with independent and national-chain service centers.
The dealerships also converted sections of the service departments into quick-service operations adjacent to the service drive and visible to customers. More than lube-oil-filter outlets, these centers feature multiple lifts and multi-function alignment racks.
Every vehicle enters the service process here from the write-up. Vehicles are inspected and alignment checked. All light service work is done there. Heavier work is moved into the main shops. Loaner cars specifically to support these quick-service operations are provided to customers who choose not to wait.
Long requires quick-service technicians to review inspection and alignment results with the customer. If tire-wear inspection shows replacement is in order, that is mentioned to the customer. Tire display racks are nearby.
The dealership has enhanced traditional marketing and coupon offers with customer database analysis to find owners whose vehicle mileage, service history and ZIP code make them ideal service candidates.
The centers quickly began to demonstrate their value to the bottom line, Long said. “We’re on target to bring in another $19,000 a month in labor and parts from these centers, plus we’ve increased tire sales from 160 to 225 a month and growing.
“Overall, our quick service first-use rate has jumped from 39.4 percent to 72.9 percent.”
At Hurley Chrysler-Jeep-Dodge in DeLand, Fla., dealer Brendan Hurley said efforts to win back owners of older, higher-mileage vehicles is adding up to 25 percent to his service work monthly.
“Every customer detail we need to identify these opportunities resides in Traffic COP,” he says of an AutoSoft customer-relationship management feature.
Hurley parts manager Bob Torbitt, service manager Jeff Caruso and service advisor Kurt Serdari set CRM data-search parameters to help them build targeted lists of customers to contact.
“Profiting from the aging fleet requires us to be smart about noticing service patterns,” Hurley said. “We then search the data to find the customers owning those same makes and models.
Odds are they’re having or likely to experience the same issues with their vehicles.
“Opportunities like this don’t just slap you in the face,” he says. “My advice is look for owners of cars in your database that are four to five years old. Find out the repair Achilles heel. For Jeeps with the 4.0L engine, for instance, it’s the rear main seal. For PT Cruisers, it’s the steering rack and the water pump.”
Serdari, who once sold cars at the dealership, uses the COP software in his current back-end job.
“I’ve got all these customers to whom I sold cars, and now I can follow up and work them to bring them back as my service customers,” he said. “This tool really helps me identify customers’ service needs in a deep and thorough way.”
Hurley sought to set competitive labor rates to attract new customers. “We pay technicians a flat rate for these repairs, and find a cheaper source of parts to be competitive.”
He sources second-tier priced parts from Mopar’s Magneti Marelli. “It’s 35 percent cheaper,” said Hurley.
Dealerships offering a two-price strategy to compete with independent and chain operations are boosting business for firms such as Mighty Auto Parts.
“Our sales in 2011 were up 43 percent over the prior year, and the number of dealerships taking on our line was up 50 percent,” said Dave Raphael, the firm’s marketing director. “We spent 40 years taking business from dealerships and now we’re helping them get that business back.”
“As I travel, I noticed banners hanging from many dealerships announcing all-make-model repair, which indicates the hot button this opportunity is.” But many dealers struggle to make it work, Raphael says.
“My advice is this: The least-expensive and most-targeted messaging a dealership can do to build its any-make-model-year repair business is to be sure every service advisor clearly notifies every customer that the dealership can service any vehicle in the family’s fleet. Then invite them to bring that business in.”