Should Service Advisors OFFER VSCs to Customers?
What is your opinion on IF the advisors should offer VSCs to Service Customers and if so how should that transaction take place?
Should the Advisor handle the sale from the start to finish or should they take the customer to F&I and allow them to perform the sale?
Which department should get credit for the profits?
Replies to This Discussion
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Permalink Reply by Steve Richards on
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No, they should sell VSC's to service customers. They should handle the entire transaction and the profits should be service profits.
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Permalink Reply by Kelly A. Spires on
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Thanks Steve, that is actually what I meant to ask..
What do you think about the profit distribution on the sale when service would sell a vsc to one of the service customers?
Steve Richards said:No, they should sell VSC's to service customers. They should handle the entire transaction and the profits should be service profits.
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Permalink Reply by Kelly A. Spires on
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Tom,
Thanks for the insight.... It is truly amazing to say the least!You were paying the advisor a $400 spiff on every vsc sold? Did I understand that correctly?
Tom Wilson said:Interesting that this should come up. As F&I Director for a 7 store group, VSC's are a big part of our income and as a reinsurance product, extremely profitable for the company as a whole. It made sense to train the Service advisors and managers on selling service contracts. After all, they're on the front lines with the customer and can determine at a glance when their factory warranty expires.
A year ago I trained the Service Advisors on the "how-to" of selling a VSC, where to get the pricing, how to handle the transaction, etc. Their spiff - $400 casn for every VSC sold. The number of service contracts sold in 7 stores in a year - 0.
The Service Advisors and Managers want nothing to do with selling service contracts. They want to upsell service. The VSC sales aren't anything they're familiar with, nor do they even want to be involved. If a customer expresses an interest in a VSC, they get walked right to F&I where the transaction is handled. Service is concerned with hours per R.O. and upselling their own products, not selling a VSC. The owners finally gave up - there're two entirely different selling processes involved. Service does what they do best and F&I does what they do best. In the long run, the experiment failed.
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Permalink Reply by Mark Proctor on
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Absolutely... Front to back and is trained to
do so...
And paid accordingly.
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Permalink Reply by Kelly A. Spires on
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I would think that the service advisor would be able to have the "BEST" closing ratio on selling VSCs in the dealership. They have the knowledge, first hand experience as to the benefits of the programs to the consumer.
IF they are paid accordingly, there is an easy system for quote and sales, the profits from the sale go to the service department, (where there is absolutely no cost of labor) shouldn't this be a huge success??
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Permalink Reply by James L. Kneip on
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Yes. Service advisors should be trained, and then allowed to sell service contracts. The process I use is that the advisor brings up the contract, but again they must be trained on both the product and the objections to follow. If the guest/customer is close or says yes, it is turned to finance. Finance does the paperwork, and counts the income, but the service advisor is also compensated nicely! Finance needs to track the number of contracts sold out of service, and also the gross. Add this line to finance summary. Hopefully the service manager will be OK with the income going to F&I, as long as his/her department is shown as the producer. Pay the service manager as well. Say you are paying the advisor $300 pay the service manager $100 per contract, but again make sure everyone is trained and the service manager, and Dealer see that service generated the gross, and the sale. Also I don't think you need to pay $400 per contract. Not if it is turned to finance. The service advisor gets commitment, and is done. I would lean towards a percent of the gross. Say 15%. Process's like this fail when they are done without agreement from all parties, and without constant training. It can become a success, but must be followed up on till it does, and everyone must be in agreement as to how it benefits Service, Finance, and the store as a whole!!
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Permalink Reply by Kelly A. Spires on
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James, Great information.... Thanks so much...
Have you ever had a Service Manager not endorse the programs because their department is not receiving the income from the sale?? Even though they are getting paid their spiff??Kelly
James Kneip said:Yes. Service advisors should be trained, and then allowed to sell service contracts. The process I use is that the advisor brings up the contract, but again they must be trained on both the product and the objections to follow. If the guest/customer is close or says yes, it is turned to finance. Finance does the paperwork, and counts the income, but the service advisor is also compensated nicely! Finance needs to track the number of contracts sold out of service, and also the gross. Add this line to finance summary. Hopefully the service manager will be OK with the income going to F&I, as long as his/her department is shown as the producer. Pay the service manager as well. Say you are paying the advisor $300 pay the service manager $100 per contract, but again make sure everyone is trained and the service manager, and Dealer see that service generated the gross, and the sale. Also I don't think you need to pay $400 per contract. Not if it is turned to finance. The service advisor gets commitment, and is done. I would lean towards a percent of the gross. Say 15%. Process's like this fail when they are done without agreement from all parties, and without constant training. It can become a success, but must be followed up on till it does, and everyone must be in agreement as to how it benefits Service, Finance, and the store as a whole!!
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Permalink Reply by James L. Kneip on
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Yes. I would first ask why? Is it solely because of where the income is counted. If the answer is Yes, and this is the only objection. We need to explain what finance does vs. what service does, and why we our counting the income in F&I. Also the dealer needs to explain he/she will be looking at the numbers from F&I and will see service has driven gross to dept.
Now to be frank.. Does F&I get paid off the dollars produced when a VSC is used in service? Does service have to do the paperwork slowing them down or do the get to sell and turn?(and get paid) Does service handle cancellation of the contract or any other issues that may arise? Finally do the service manager, and advisors have a better way to make %15-%20 on a gross sale. I have seen many advisors make an extra $1,200 to $2,000 a month just getting a yes, and making the turn. If you had just 4 advisors the service manager would make the same just by endorsing the process. Now again can a service manager fight this, sure. If everyone sits down in the beginning of the process, and goes over all of the objections, and there may be more then the above. If everything is made clear to all parties. It should be a win for all involved! Still you may have one service manager in 10 say their not on board. If that occurs then the dealer needs to give the final word! I don't like to force Ideas on people. It tends to cause the process to fail long term, but if we know it will be a win for the store then sometime in the beginning it must be imposed. I would suggest talking with the service manager in the statement meetings after the process is running against their will, and bring up that we see where the income is being generated, and also how he/she likes the extra $$'s. Hopefully in time it becomes a win for everyone, but it all starts in the beginning by honestly explaining why, how and what is expected. Also like with any process the follow-up is just as important as the implementation!
Kelly A. Spires said:James, Great information.... Thanks so much...
Have you ever had a Service Manager not endorse the programs because their department is not receiving the income from the sale?? Even though they are getting paid their spiff??Kelly
James Kneip said:Yes. Service advisors should be trained, and then allowed to sell service contracts. The process I use is that the advisor brings up the contract, but again they must be trained on both the product and the objections to follow. If the guest/customer is close or says yes, it is turned to finance. Finance does the paperwork, and counts the income, but the service advisor is also compensated nicely! Finance needs to track the number of contracts sold out of service, and also the gross. Add this line to finance summary. Hopefully the service manager will be OK with the income going to F&I, as long as his/her department is shown as the producer. Pay the service manager as well. Say you are paying the advisor $300 pay the service manager $100 per contract, but again make sure everyone is trained and the service manager, and Dealer see that service generated the gross, and the sale. Also I don't think you need to pay $400 per contract. Not if it is turned to finance. The service advisor gets commitment, and is done. I would lean towards a percent of the gross. Say 15%. Process's like this fail when they are done without agreement from all parties, and without constant training. It can become a success, but must be followed up on till it does, and everyone must be in agreement as to how it benefits Service, Finance, and the store as a whole!!
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