By: Chuck DeMartigny

Update Your Service Drive Now. It’s a critical component of your customer experience.

Shared: From your friends #*@TechAutoCareers.com®* the online resource for the *Automotive Sales Fraternity™*

Your service department is a much more important influence on the car buying decision than you probably think. Why? Because:

1. Your potential new customers consider service to be an integral part of the value of buying their new vehicle from you. According to a recent Harris poll commissioned by Cars.com, 64 percent of in-market car shoppers indicate that a service department’s reputation is a key factor when choosing where to purchase a vehicle.
2. Your active service customer is six times more likely to buy their next vehicle from you. Jim Phillips, Director of Consulting, NADA University, shared a major manufacturer’s survey that reported 86% of regular service customers, and 46% of occasional service customers become repeat buyers.

Keeping your Service Customers happy has to be one of the most important events going on every day, in your service department, while they’re still your customer. The sad fact is that up to 90% of OEM Dealership customers quit their dealership to have their vehicle serviced by the independent and chain store operations. Once customers leave, they won’t be helping you build your reputation and the likelihood of their repeat purchase falls to only 9%.

Cars.com, in the introduction to their new Repairpal initiative, states that; more than 86 percent of cars on the road today are past warranty; and that franchise dealerships are losing a significant share of service revenue to local repair shops and national service chains.

“In fact, dealers lose an average of 60 to 78 percent of service revenue on cars three to six years old, and between 82 to 92 percent of revenue on cars more than seven years old.

This claim is re-enforced by the 8% market share of OEM dealers of the total replacement tire business in 2014, as reported by MTD Modern Tire Magazine in their annual report on the tire industry. OEM Dealerships sell approximately 25% of all used vehicles, and 100% of all new vehicles. Combined that’s almost half of all cars sold each year.

Do the math – more than 90% of your customers are likely going somewhere else to replace their tires. In fact, tire replacement purchase is the first and biggest point of service customer departure, and it closely correlates to the time that customers start contemplating a new vehicle purchase.

According to NADA UNIVERSITY, 20 Group Best Practices, “The statistics speak for themselves:

1. 15 percent of vehicles in the service drive need tires.
2. 75 percent of consumers purchase tires from the first person that recommends them.
3. 78 percent of consumers maintain their vehicles at the place where they purchase tires.

Yet surveys show that only 40 percent of service department customers are aware that their dealership sells tires.

The good news is that over 80 percent of these same consumers indicate they would be “likely” to purchase tires from the dealership. In other words, there is lots of opportunity to both sell tires to customers as well as keep them coming back for service, rather than seeing them defect to the tire retailer down the street. More and more often, successful service departments are using their oil change service to help sell more tires, and using their tire business to help sell more oil changes.”

Stop Giving Lip Service – Start Providing Professional Tire Service

There is plenty of evidence that the trend can be reversed by following these NADA recommendations:

1. No substitute for a good display

1. Service drive should look like a tire store
2. Good, better, best choices (See my previous article)
3. Common wear patterns (Tire Wear Chart)
4. Must be priced competitively

2. Comparison pricing/specifications sheet (Dare to Compare)

3. Consider offering the following at no additional cost

1. Road Hazard Policy
2. Rotations

Jamie LaReau reported in Automotive News NADA 2012 preview that: “At AutoNation Inc., the nation's largest dealership group, tire sales have doubled from a year ago because of a program it piloted in late 2010 and rolled out early last year. The program centered on training staff about tire knowledge and sales skills. AutoNation also created tire displays in each store, brought inventory to levels each store could handle, touted best pricing, value and performance in its marketing and established goals and objectives at each store, said an AutoNation spokesman.” I can personally attest, as the designer of the AutoNation program, that their Tire initiative continues to thrive and grow, and that hundreds of other dealerships have jumped on board and are replicating their success.

Brand and Merchandise Your Service Drive to Engage Your Customers

Your Service Drive should be designed to look and feel like a vibrant and active “Sales and Service” space as well as a key interaction point between your dealership and your most important asset, your customers. Every commercial designer I’ve ever met preaches that for a Great Design, Form must follow Function. This holds especially true for your Service Drive.

The 3 key functions of your drive are generally:

1. Customer Service – Customer Retention To ensure the continued Safe operation of your Customer’s Vehicle

• Tires
• Brakes
• Engine and transmission
• Fluid levels
• Warranty Recalls
• Warranty Repairs

2. Provide Preventative Maintenance – Fast Lane

• Oil Change
• Tire Rotation
• Warranty Inspections
• Other Scheduled Maintenance

3. Diagnostics, Repairs and Replacement Parts

• Check Engine and other Warning Lights
• Broken and Damaged Parts
• Replacement Tires, Brakes, Batteries
• General Mechanical Repairs

Your well designed Service Drive will re-enforce these objectives with engaging and informative point-of sale signage and merchandising displays that promote these services and re-enforce the Customer Centric “Service Brand” commitment of the Dealership. Logos, mission statements and company ideals should be integrated into this cohesive brand strategy.

The most impressive and engaging Service Drives incorporate a Tire Merchandising Display. A well designed Tire Display has great visual impact, requires little if any encroachment into the drive and has the added benefits of generating significant additional revenue and dramatically increasing customer retention. Why?

1. Tires are the number one defection point from the dealership.

2. They are a vital “Safety” component, and

3. More than 15% of all service drive traffic is in need of tire replacement.

4. Every $1 of Tire Sales generates $1.50 of additional ROs

5. More than 80% of your current customers are leaving the dealership to purchase replacement tires elsewhere. And when they leave, they don’t come back!

Most of your customers will only visit your Showroom once every 3-4 years; however Customers need to visit your Service drive 2-3 times a year — for scheduled maintenance, warranty repairs, recalls, oil changes, tire changes, new parts and accessories and more.

Your brand is what makes you unique and helps you to stand out against your competition. Branding your dealership is a big deal. You want to make sure you are hitting your target market where it counts and making a lasting impression so that you are the obvious choice for your potential customers when they first visit. Therefore it is vital to extend and integrate your brand (branding) into the Service Department as well. Extending your brand into your service space helps your clients and customers understand more about who you are and what makes your dealership special.

Curb appeal is imperative to any successful dealership. Presenting a clean, brightly lit, well-branded storefront means that people will be confident that they will have a good customer “Experience” walking onto your lot. See for yourself. Take a walk through the front of your dealership and take a good look around. This is what your customers first “Experience” when they visit your store. I would expect it to be clean, neat, well lit, polished and professional. I imagine your signage to be professional and compliant and that the overall look and feel is totally in sync with your OEM brand.

Now compare that experience to your service department experience. Start at the service drive and “Experience” your service department. Does it measure up? Does it create the lasting impression that you are the obvious choice for their purchase decision?

Today, customers want to know how their vehicles will be serviced as part of the buying process. To reinforce the value of your service and repair, you need engage your customers from the time they start shopping for their new vehicle. So, how does it look in person? And, just as importantly, how does it look online? Chances are, if you take a careful and critical look, you will realize that there is plenty of room for improvement.

A properly designed and executed Tire Merchandising program normally costs $5,000-$10,000, and will pay for itself from incremental profit generated within 2-3 months. So don’t be cheap, do it right.

Lease purchase options are also available for as little as $150 per month amortized over 3 years, generating immediate incremental sales and profits from day 1.

So What Are You Waiting For? Re-Tire Your Drive Now!
Please make sure you share this article with your GM and Dealer principle.

What do you think? Is this something you can benefit from or do you have a few tricks up your sleeve that are just as powerful? Make your voice heard by leaving a comment below. Don’t forget to hit the share button if you know others who will find this post useful.