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Service: You Can’t Win if you Don’t Play

Posted on Jun 25, 2010 - 12:17 PM

Ever just want to smack somebody? It happened to me the other day, and it has probably happened to you at least once in your life.  Here’s the deal, I am meeting with this pretty smart service manager and fixed operations manager at a store in – well I won’t tell you where – but it was a domestic store that has been struggling for a while. We were talking about increasing customer retention and service traffic and how important both of those things are to the future. Then the general manager comes in to the office and asked if he could join the meeting – and of course we invited him in. He seemed like a nice enough guy at first – well dressed and all of that and I admit I usually love it when dealers or general managers are interested in spending some time to talk about growing their service business – but not this time as you will see.

So anyway, this guy sits down and immediately decided he wanted to take over the meeting – you didn’t see that coming did you? He pretty much looked down at us ol’ service bumpkins and decided he would give us an education about advertising and marketing and selling – since he was the general manager and knew everything about everything – you know what I mean. He begins by saying that all of this talk about improving customer retention and advertising in service is nonsense – since, according to him, he has 3 good reasons to prove that service marketing is a bad investment.  Funny, he really made this look like he had actually thought it out.

First, this guru points out to us that cars are so complicated now that customers can’t go anywhere else to get them fixed. Dealers have no competition he says. And then he adds that since warranties are so much longer - why advertise – cars are all covered under warranty anyway. Hmmm – now, there’s a thought to ponder on – no, not really.

Then he continues his educational process for us morons in the service business, by stating that spending money on direct mail for service reminders or specials is a total waste of time, because – customers come in when they are due, not when you tell them to – besides, you don’t make any money “back there in service” anyway. So why advertise? It’s just silly – he tells us.

And last – and this is the one that made me change my mind from just wanting to smack this moron to landing a few good punches and maybe a 2x4 to the head. He says that the third reason we shouldn’t advertise or send out coupons in service is because  “customers today don’t clip coupons anymore– that went out with the 8-track” the genius tells us. Now there’s a news flash – right?

Well unfortunately, he had to cut his little service training class short because he got a page that called him to the sales tower – (Dammit), so we graciously thanked him for his valuable insight and vast knowledge of the ins and outs of the service business and promised to keep his comments under advisement. Then we all agreed that he is an idiot and should just be ignored totally. Service advertising obviously makes sense – and I like the line that applies to a lot of things in life – You Cant Win if You

Don’t Play – so you have to advertise to keep customers from going somewhere else – that is just simple, common sense. So, even though it’s pretty obvious, let’s take a look at just how wrong the service genius we had with us really is.

First, the cars are too complicated  / warranty issue. OK, cars are more complicated today, I’ll give him that one - but there are a lot of high-tech independent garages out there that can fix anything you can. The longer warranty terms we have today are a bi-product of better-built cars and look at your total warranty business – I bet it is down from several years ago, right? Cars just don’t break as much as they used to – so really retaining customers for maintenance and wear and tear items is about all we have left.  Fact is, if you don’t sell customer pay service today you wont be in business for long - (maybe a BMW store is sort of an exception, but I have found that 75% of BMW owners stop going to the dealer when the free maintenance runs out) go figure?  So how good was that for service retention really? And since customers are keeping their cars longer – you run the same risk of losing the customer for their next vehicle purchase at a BMW store as any other store. So – anyway – again, he’s an idiot.

Next, the Service Guru tells us that direct mail is a total waste and you don’t make money in service anyway. I wonder what rock this guy is living under? Maybe he just got into the car business and didn’t experience the past 2 years of “service and parts departments paying the bills for the entire dealership” or maybe – he is just a moron! Yeh, Yeh – that’s it I think.

You know this - direct mail is still the best way to advertise for service – think about it – customers have on average 4 email addresses and 3 phone numbers, but they only have 1 mailbox and it sits right in front of their house and they check it everyday.  Email or phone call reminders make great supplements – but they will not do the job alone – they just don’t work well enough alone to drive your service traffic where it needs to be. You need to put an offer in their hand – a mailer.

And think about this. With direct mail you need to go after your lost customers first to get them to come back. You know who the customers are, where they live, what kind of car they own, when they were in for service last and what they need - and if you do it right, you can get them to come back to your store for service and spend money – which is much easier than trying to get strangers in your store. Remember, even though cars don’t break or need maintained as much as they used to – they do still need stuff sometime and you need to be their choice.  And for the record - average gross profit on customer pay labor is about 75% and 45% on parts sales on repair orders – so, there is a lot of money “back there” and again, he’s an idiot.

So, last we come to the ‘customers don’t use coupons anymore’ statement.  Are you kidding me? In today’s economy, consumers are even more tuned in to coupons, good deals and rewards club that thank them for their loyalty. They have to.  But, to get the most bang for the buck, make sure when you advertise your service department, you follow a few common sense principals of service advertising: Mail to the right people, be consistent, make sure the offers make sense, entice them in with a hook and measure your success and ROI. Not rocket science – just common sense.

The Bottom Line: Here it is again, – the one liner that puts it all in perspective and is the title of this article: You Cant Win if You Don’t Play. If you don’t advertise you will have less service traffic – just like in sales. If you don’t advertise you are totally dependent on warranty and car sales – and we all know where both of those have lead us the past few years. If you don’t advertise – you don’t grow, you don’t sell and you don’t survive – it’s really that simple. Get the word out – don’t be the best kept secret in town – advertise service, do it the right way and you won’t just survive – you’ll succeed.

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