We all know the term “declined service repair.” Increasingly, I hear service departments are having a hard time keeping customers in the service lane to get those declined services done.
Imagine if financing didn’t exist for vehicle purchases. Chances are that very few would ever be able to own one, despite the desire to do so. The same situation applies to service repairs. I bet that a good number of your customers are declining service repairs not because they don’t want them, or think them unnecessary – but for the simple reason that they cannot afford them. And they are probably too embarrassed to admit it. With the CFS Auto Repair Finance Program Confident Financial Solutions, you can offer your customers a way to pay for repairs in a more affordable manner. While a customer may not be able to afford a $2,000 repair bill all at once, they could perhaps afford $75 per month.
Our primary goal is to provide a favorable alternative to credit card financing, resulting in increased credit approvals and immediate access to capital. Customers apply online via a smart phone, tablet or computer and receive an instant credit decision. With CFS, partner service centers increase activity on the service drive, increase revenue at the service center and enhance overall customer satisfaction. In fact, the average increase in service revenue is 20%; average RO close rate 63%; and average increase in monthly revenue is $46,000.
The service department is typically the busiest place in any dealership and the staff have an overwhelming amount of different processes and things to worry about throughout the day. This program doesn’t hamper the service process. If anything, it helps them to get additional revenue and get those customers back on the road – it is a good fit all the way around.
For our CFS dealer partners, the key to decreasing service declines and maximizing customer participation lies in making your customers aware that they have other options available to finance the repair as early as possible in the repair process.
Here are a few best practices that can help improve results with your customers:
1. Start awareness early: Don’t wait until a large repair bill is presented, start making your customers aware of this option early in your process. Feature it as a drop down menu on your website under “Service.” Some of our dealers even have it pop up as an option as part of the online scheduling process. When you send service appointment reminders, include a message that financing options are available, with a link for the customer to get pre-approved. CFS also offers its partner stores a full array of point-of-sale (POS) solutions like desktop brochures, posters and stickers. Whether they need a large repair, or a simple oil change, at the very least you have made the customer aware that financing exists.
Also promote that you offer 0% APR for qualified customers when they pay the loan off within 60 days. This could capture the attention of any customers that are perhaps momentarily cash-squeezed and find it more convenient to finance the repair for a couple of months, with no finance charges.
2. Integrate financing options into each process touchpoint: From the moment the customer pulls into your service drive, train your advisors to inform customers that financing options are available to them. The customer is then primed with the knowledge and may not be quite so hasty to decline the recommendations, opting instead to explore financing as a viable option. Copy the successful practices of department stores. Whenever the customer is ready to pay for repairs, train your employees to ask whether they would like to pay with cash, check, credit card or financing. Department stores use this process for a simple reason, it works.
3. Presentation: Whenever a service advisor prepares to present a customer with a significant service recommendation or unexpected repair, make sure that they always inform the customer during that presentation that financing options are available. By making this a consistent process, customers that would normally decline service simply because they cannot afford it, can explore an alternate method of payment that they perhaps can afford. We have found that the customer is then less likely to turn down the service.
4. Don’t get stuck on a number: Don’t assume that just because a $350 repair bill doesn’t seem high to you, that it isn’t a financial burden for the customer. Always offer the customer the option for financing. You may well find that customers take you up on the financing offer for lower repair bills than you’d expect.
The bottom line is that the CFS Repair Finance Program allows you to offer customers an additional way to pay for their repairs. By keeping the message in front of your customers throughout the entire service experience, you’ll find that rather than leaving your dealership without completing the repairs, an increasing amount of customers will be happy to get the work done.
About The Author: Dan Beres is CFS’ Vice President of Corporate Development. Dan has 20 years experience selling and managing technology/marketing solutions in the auto industry. Managing Partner and EVP of MyCustomerData, 8th employee and key team member building Who’sCalling; Corporate track record at BMW, Mini, MB, Volvo, FCA, Autonation, Sonic, Penske, Asbury and Van Tuyl dealer groups. BA, Eastern Illinois. Dan also sits on the Board of Directors for Providence Speech and Hearing Center, a nonprofit organization providing services to the speech and hearing impaired of Orange County, California
Legal Disclaimer: The application generally takes 2-3 minutes. CFS will promptly fund the repair amount once repairs are completed and documents are executed. All loans are subject to approval pursuant to standard underwriting criteria. The CFS 60-Day Interest Free Program applies to approved customers who pay their entire loan off on time with no missed payments. Available amounts, terms and the Annual Percentage Rate (APR) will be based on an evaluation of your credit history and your state of residence. The interest rate is fixed for the life of the loan and could range from 9.99% to 36.00% APR.
Written by Dan Beres