Professional Community for Automotive Marketers, Car Dealers, OEM and Suppliers
Written by: Steve Hall
Dealers know you must provide fast, convenient, and competitively-priced service in order to retain your customer base. They also know that oil changes and light maintenance are the most requested service items by customers. Knowing this, why do dealers continually fight express service?
I’ve heard all the excuses: it hurts my hours per repair order; it hurts my gross profit percentage; it hurts my effective labor rate; I can’t make any money in express service; the list goes on and on. Shouldn’t we think about it differently?
Isn’t it logical that if a customer comes to you for express services, you will have an advantage to getting the remainder of their maintenance and repair work? Customers generally do business with people they trust. If you start to grow that relationship from day one, when the only things that are needed are express-types of items, won’t you have the trust of the customer when the “real” repairs come into play?
We need to realize express service is the gateway to real profits, and if done properly you can make plenty of money along the way. After all, how do you think all the mass merchandisers and independents stay in business?
Let’s look at it this way, have you ever taken a low profit (or no profit) deal on a new vehicle? I’m sure that every dealer has, many times. Why do you do this? Often times it is because you are getting a trade-in you feel you can make money on. Other times it is so you can move a unit off the lot to reduce your inventory costs, or maybe to help you reach unit bonus levels for factory incentive money. Possibly, it was just so you would have an opportunity for the F&I department. Whatever the reason you decided to take the short deal, you have a plan. The loss of front-end gross on that unit gave you opportunities to make more money in the long run. You had to make the deal to gain all of the other benefits.
Can you relate this thought process to express service? We must retain the customer in order to get all of the long-term benefits. But express service has an added benefit. If properly structured, you will make money in express while retaining your customer. That is a win-win, both short- and long-term!
Take a few minutes and examine how much money is spent on a single vehicle over the lifetime of that vehicle. Include average warranty work, recalls, oil changes, maintenance, tires, brakes, breakdowns and everything else that happens eventually to every vehicle. Once you add all of these dollars together and look at the complete picture, you really see what the customer is worth over the lifetime of the vehicle. Now you must develop your plan to make sure that customer never goes anywhere else, and express service has to be part of that plan.
Let’s look at express service for what it can and should be, a profit center with long-term financial benefits. Remember, customer retention is a good thing. Get fast, get efficient, get competitive and get profitable!