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All too often, dealers are hesitant to make an investment in training new and Preowned salespeople because turnover in the sales department can be as high as 70 percent according to NADA. Service, however, has always been most dealership’s foundation for profitability. That’s where the phrase “service absorption” comes from.
For the most part, dealership service departments are profitable, and staff turnover is much lower at 27.2 percent, according to this article in Automotive News. While that is true, there are several things a dealer should consider. First, the turnover rate in service is increasing due to the competitive marketplace and second, the demand for technicians and service advisors is only increasing. Couple those facts with the recall epidemic that the industry has been experiencing for the last couple of years and the demand for service employees has skyrocketed. The problem is that individuals are pursuing automotive service careers less which, of course, exacerbates the problem.
As all of these factors spiral towards a collision course! What can dealers do to not only attract new service employees but also retain the ones they already have?
Show them their value! Invest in them and Train them!
Why you ask? First of all, a successful service department is more than just an automation factory of checking in vehicles and releasing them to customers. Training service advisors is also way more than just showing them how to work the DMS, CRM or translate an MPI form. Service advisors need to truly understand what the service recommendations MEAN and then be able to communicate that to the customer in a professional manner.
For example, Most customers don’t understand the importance of, or need for, many recommended services. This is the primary reason why customers decline services. They don’t understand why they are important or if they need them. They’d rather decline them and go home and consult a family member or friend that they consider has more knowledge about automotive service.
You know what happens then? If the customer gets educated and realizes the importance of the service recommended, they price shop the dealership and could easily end up at an independent! That same customer, had the service advisor been trained how to correctly explain services, could have Built value to the customer adequately and, chances are, the customer would have accepted the service recommendation. Why? Because of the one single most important edge that a dealership has is convenience.
No one thinks I got nothing to do today I think I’ll bring my vehicle in again for service, and given the choice, and understanding the need, they will choose to have their vehicle serviced while still at the dealership! This increases revenue per RO and makes the dealership more profitable.
The second biggest reason for training service advisors also has to do with profitability. Training service advisors increases their confidence, makes them feel needed, wanted and appreciated. It increases the dealership’s stable of qualified employees which leads to better customer experience and lower turnover.
Think about how much it costs you to find a new service advisor to replace an one that leaves… most studies estimate the cost at 70% of the yearly salary! That can have a huge impact on profitability. Remember that old saying, where the manager asks what happens if we train our people and they leave, and the owner responds what happens if we don’t and they stay.
The key to profitability lies in training service advisors, to correctly present service recommendations in an understandable way that educates the customer, creates a company culture in which employees feel appreciated and stick around. That my friends, leads to a better customer experience which creates loyal customers who trust your dealership’s advice. That is how your dealership can create a solid foundation that not only provides increased profitability immediately but also places your dealership in a great position to handle the increased service demands that are headed your way.