Have you seen a decline in the amount of vehicles entering your service drive for oil changes and tires? This trend seems unstoppable yet it can be stopped with some aggressive marketing, price adjustments and participation from your service advisors and your suppliers. The loss leader sales of tires and oil changes will bring you more brake and suspension work, this will secure your place within your own market demographic.
Warranty times have decreased within most dealerships for a number of reasons, the number one reason being that vehicles today are built better and most parts last longer, therefore to see more vehicles more often you MUST be willing to have loss leaders to bring customers back into your facility and steer customers away from the aftermarket competitor.
I challenge you to examine the amount of mom & pop or franchise service centers that exist within your market area. Peruse the internet or take a drive around the area where your dealership resides and count the number of aftermarket shops, you will be surprised at how many there really are! It is these service centers that are effectively capturing and retaining your customers for items not covered under the warranty.
If a customer takes their vehicle into an aftermarket facility for their routine oil maintenance they will begin to build a relationship with them and soon your customers will be going there for tire purchases. Tire purchases lead to brake replacement and suspension work, not to mention the alignments that are performed at independent service centers can sometimes triple the numbers the average dealership posts on a monthly basis. This loss in revenue hurts most dealerships ability to be profitable and this leads to layoffs or a shortage of key personnel to maintain the servicing levels required to woo customers into doing business with them.
Don’t be fooled into thinking that your dealership is exempt from the aftermarket segment; they are effectively taking a bite out of your business everyday! The aftermarket industry has become more competitive, aggressive, convenient and yes they have put on a fresh face and therefore look more reputable and convincing to the consumer. The aftermarket sector is essentially eroding the customer base at a lot of dealerships across the country.
Part of the blame rests with the manufacturers for extending the servicing intervals on most makes and models, heck some manufacturers have extended servicing intervals of 10,000 to 15,000 miles and come complete with sealed transmissions, 100,000 mile spark plug replacement and extended life coolant of 50,000 miles. This all results in less traffic for most dealership service departments. Dealerships NEED more customers more often to maintain the income stream needed to keep fixed absorption at or around 100% not to mention maintaining staffing levels to give customers that exceptional servicing experience they all want from their servicing dealer.
For dealers who want to succeed you MUST beat your local AFTERMARKET competition at their own game – SELL TIRES, ALIGNMENTS and OIL CHANGES as LOSS LEADERS. You MUST be open with convenient hours of operation to service your clientele when they need you. Opening full days on Saturdays is a great start to providing convenient hours of operation; you know your competition is open full days on Saturdays. Are you? Market yourself as a service department that sells tires competitively, aggressively market your tires, oil changes and alignments and shop you competition for their pricing. Market your dealership service pricing to your customer base by postcard, email blast, service menu boards. Saturday service needs to be treated like any other day.
Stop your advisors from making negative statements like, “there might be parts issues, we only have half staff or my favorite – we might not have enough time to complete the job today”! You just won them over and got them to frequent your facility and you’re already figuring out a way to get rid of them! Shame on any and all advisors who push customers away with language like this! If you are open – DO BUSINESS! Why give your customer the opportunity to think he/she has made a mistake by choosing to service at your facility?
Everything you send out should show you are in business to sell tires, alignments and oil changes. Just because your competition is one price doesn’t mean you must match their pricing because most independents or franchised service facilities do not offer loaner cars, shuttle rides or bright spacious waiting areas with wifi.
Market your amenities as well as your pricing! Your internet or yellow page advertisements must be also placed under the headings of tires, alignments and oil changes. Statistics show that four out of every five customers will purchase tires from the first service facility that show them they need tires, are your service advisors actively checking and inspecting tires on the service drive? If not you are missing the tire sales and probably so many other repairs associated with getting the wheels of the vehicle! STOP leaving money on the table!
Having low prices on oil changes, tires and brakes gives customers perceived value. The other interesting factor here is that because customers perceive the loss leaders as value, when you present them with an estimate for additional work they automatically assume that the rest of your service pricing lineup is packed with value as well! Make it easy for the customer to say yes when you propose the estimate!
No matter what a vehicle comes into my service facility for, every vehicle has a 27 point courtesy inspection performed. The service advisors MUST present any additional up sell work to the customer giving the customer a reason to perform the work while maintaining a sense of value the customer can easily recognize. Make sure you are aggressively marketing, even at the service advisors desk!
Remember; Check your competitors pricing on a least a quarterly basis. Maintain your own value pricing. Treat each customer like only they exist. Be open for business with hours that make sense. Facilitate the perception that your facility is packed full of value added bonuses. Sell oil changes, tires & alignments as loss leaders. Pay your advisors spiffs on alignments and watch the amount of alignments increase immediately.
Get serious about your service department and get excited about making things happen. Help your service team sell more work and show your advisors how to make more money and have more fun. By using loss leaders you will increase your business and that of your bottom line!
David
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