Is the Service Department the "NEW" Sales Department???
Sounds like a stupid question??? Well, what I mean is this...Has the dynamics of the retail operations of the dealership shifted to the Dealer Principals and GM's focusing more deserved attention to the fixed operations side of the business? Are dealers investing more money in acquiring talented "sales" type people to be the face of their dealership at the service drive? Are dealers investing in service training to ensure that principles and processes are effective? Are dealers investing more advertising dollars to promote maintenance and repair business? Are dealers utilizing their web sites to properly showcase their fixed operations services they can provide to the client? Enough food for thought...now I would love to hear your thoughts on this very vital issue!
Replies to This Discussion
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Permalink Reply by Heather Wirtz on
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vehicle and calling you when they are ready to get into the new one.
Hope that helps!
Heather
Mudd Advertising -
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Wow, my entire message was removed.
What I was saying was that from my perspective in helping advertise to service and sales, what dealers communicate to me is this:
1. Service has a higher profit margin
2. Working with you sale and turning it into service allows you to ensure the vehicle is well maintained and a higher quality trade in
3. Building trust in service allows you to continue with sales of new vehicles when they are ready to upgrade
I don't know if service is the "new" sales department, but I think it should be recognized as a key area for sales. When I am helping a dealer with a campaign, no matter how much traffic we assist in driving to their store, the person at the receiving end - has to be on their game. Great customer service, phone skills, transparent about scheduling and pricing, and a pleasure to work with. This takes training and talent.
Although service seems to be more oil and mechanics, it still needs to be treated with sales mentality. I think the dream customer is the one who wants to buy a vehicle from you and bring in it faithfully for maintenance.
Heather
Heather Wirtz said:vehicle and calling you when they are ready to get into the new one.
Hope that helps!
Heather
Mudd Advertising -
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Permalink Reply by NANCY SIMMONS on
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Awesome comment Heather!!!! Trusted relationships are key and many dealers still do not get how to do that! There has always been too much emphasis on CSI scored in benchmarking their customer retention./loyalty/trust... OEM's do not survey the lost clients or missed opportunities! Great comment as expected from an expert like you!
Thanks and have a great day, Heather!
Heather Wirtz said:Wow, my entire message was removed.
What I was saying was that from my perspective in helping advertise to service and sales, what dealers communicate to me is this:
1. Service has a higher profit margin
2. Working with you sale and turning it into service allows you to ensure the vehicle is well maintained and a higher quality trade in
3. Building trust in service allows you to continue with sales of new vehicles when they are ready to upgrade
I don't know if service is the "new" sales department, but I think it should be recognized as a key area for sales. When I am helping a dealer with a campaign, no matter how much traffic we assist in driving to their store, the person at the receiving end - has to be on their game. Great customer service, phone skills, transparent about scheduling and pricing, and a pleasure to work with. This takes training and talent.
Although service seems to be more oil and mechanics, it still needs to be treated with sales mentality. I think the dream customer is the one who wants to buy a vehicle from you and bring in it faithfully for maintenance.
Heather
Heather Wirtz said:vehicle and calling you when they are ready to get into the new one.
Hope that helps!
Heather
Mudd Advertising -
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Dan, Thanks so much for commenting...It is evident by your post that you are one of those who "get it"! I do agree with you whole-heartedly! I like your analogy of a GM being sort of a Dad to all its profit centers! It is so true...each one is different but requires a lot of attention!
Dan Creamer said:Being the gm. of a store is a little like being a dad. You have five or six children (profit centers) and they all need guidance, direction and attention to thrive and survive. The right mind set regardless of the economic conditions is to constantly work on maximizing revenue in each PC.
Whether you’re in an eleven or seventeen million car market some things don’t change. In both markets the average truck buyer spends $1500:00 dollars on accessories within two months of purchase. You want and need that business. Service absorption is just as important in a good sales environment as in a poor one. Three hours per RO of customer pay labor is not just for eleven million vehicle markets it’s for everyday regardless.
Going to teams and rotating them through the weekend to provide service seven days a week works just as well in either market. Advertising that you work on all makes and models is a given regardless of market conditions. Aggressive use of factory warranty without going over the line and dotting all your I’s and crossing all your T’s is good business all the time.
Training throughout the store from admin to the wash bay should be ongoing, comprehensive and enabling to the employee’s. Cross training of employee’s should be thoughtfully implemented also. Up in the front of the house regardless of the kind of market you want to be able to trust that managers are not just willing but able and eager to get up and close a deal. All managers regardless of their department responsibilities have sales responsibilities as well. All of this requires training to bring into focus.
So to answer your question is service the new sales department? No not in the well run stores that have it hitting on all six cylinders all the time. If a dealer or gm. finds him or herself turning to service in a panic for rescue all it means is that they have not been doing the whole job. They have been ignoring some of their children and that always ends in disaster. -
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Permalink Reply by Craig Lockerd on -
An Advisor handles how many transactions[clients] per day as compared to a "salesperson" on the showroom?They must be trained not only the so called finer points of selling but how to listen, what the client is really saying or not saying[ warranty work done here, gravy down the street] Advisors need to follow up,engage the client and maybe it's just me but I don't see many Fixed Ops people on Social Sites, why is that?
The time has come for this call never to take place again......."Parts,hold!" .....dealers hold music,rock music station for 5 minutes -
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Craig....EXACTLY!!!! The exposure to "missed opportunities" in fixed operations outweighs those of sales by at least twenty times, as there are that many more transactions/appointments/ opportunities. Furthermore, Sales Departments are usually over managed, while service is doing their own thing with nobody REALLY paying attention. I believe this stems from the average Dealer/GM comes from a sales background and the part they are not too familar with (fixed) they leave to the so-called departmental managers who "seem" to have a grasp on things! I can review one single repair order at any given time and find 5 or 6 things wrong with it... "missed opportunities". The folks in service who represent your dealership require training, training and more training... Once they understand how beneficial it will be to them personally in the way of morale, bonus checks, efficiency...they will buy into it and you will have a busy, productive, proficient profit center! Then we can start looking at service absorption.....
Craig Lockerd said:An Advisor handles how many transactions[clients] per day as compared to a "salesperson" on the showroom?They must be trained not only the so called finer points of selling but how to listen, what the client is really saying or not saying[ warranty work done here, gravy down the street] Advisors need to follow up,engage the client and maybe it's just me but I don't see many Fixed Ops people on Social Sites, why is that?
The time has come for this call never to take place again......."Parts,hold!" .....dealers hold music,rock music station for 5 minutes -
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Permalink Reply by Bobby Compton on
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You're amazing Nancy! I just posted a tip of the day and it's directly related to your post. We are on the same wave length by far. Service business is what has carried many dealers in tough times. To promote car sales through the service department is a winner!
Great topic... -
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Thanks so much for your kind words! I am still a believer that "Nothing Happens Til You Sell A Car"; however, look at your service drive for your potential buyers/ clients/ customers.... Such OPPORTUNITIES being missed each and every day. The days of sitting in the showroom waiting for the "UP" bus to arrive are over! Thanks again Bobby!
Bobby Compton said:You're amazing Nancy! I just posted a tip of the day and it's directly related to your post. We are on the same wave length by far. Service business is what has carried many dealers in tough times. To promote car sales through the service department is a winner!
Great topic... -
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Permalink Reply by Tyler Robbins on
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Nancy,
You pose a fantastic question, I am extracing just a portion of it -
"Has the dynamics of the retail operation of the dealership shifted to Dealer Principals & GMs focusing more deserved attention to the Fixed Operations side of the business"
In adding some thoughts to that portion alone, in my travels I have found that in most dealerships,:
The ratio of Sales/Desk Managers to Salespeople is 1:5
The ratio of F&I Managers to Salespeople is also 1:5
There is a GSM over all of these Managers and Salespeople
There is at least one person in the Office dedicated exclusively to post all deals and calculate commissions for payroll
Many dealerships employ some kind of Delivery coordinator
Many have added an Internet Department (a Manager and a few coordinators) to handle the incoming leads and set appointments for the Sales Staff
In a store with 20 Salespeople, that adds up to approximately 12 Personnel dedicated exclusively to supporting vehicle sales from a Management perspective, or 3 Management Roles for every 5 Salespeople (Ratio 3:5)
A store of this size is likely to have approximately 7 Service Advisors, 25 Technicians, 2 Porters, a Cashier and a Warranty Clerk and one Service Manager/Director.
Thats a ratio of 1:36
This Manager/Director is not only responsible for "managing the sale" in Service, but also doing the payroll calculations for every service employee (no one in the office dedicated to this task like the showroom has), he/she is responsible for chasing warranty receivables (an office task for the showroom), chasing a bad check (also an office task for the showroom), test driving problem vehicles, speaking with every customer who has a "concern", including every Salesperson who has a "spot delivery" at 5pm on a Friday or customer that just took delivery and needs their touch-up paint kit mailed to them, and lastly, but certainly not least, is the person that everyone in the dealership comes to when something in the dealership needs "repair".
Toilet in accounting backed up? Call the Service Manager!
One of the lights on the lot is out? Call the Service Manager!
Someone lost their key to the building? Call the Service Manager, she/he will coordinate getting the locks changed and new keys for everyone.
The Dealers' wifes' demo has flat tire? Dont call roadside assistance, dont send the lot-boy, call the Service Manager!
30 Years ago most dealerships had a Shop Foreman, who relieved the Service Manager from some of the above responsibilities, but during the recession of the early 90s, that role was scrapped in favor of a working Team Leader - no more Managerial help. Service Advisors make their own appointments, close their own repair orders - no managerial support here either.
If the Service Manager/Director was to actually ask for some Managerial support in the form of a genuine Assistant Manager, history and the present has proven - thats not going to happen!
Visit most dealership websites, click on the "Service" link (if there is one) and read the two line Service Story that mentions the Factory Trained Techs and OEM Parts as the ONLY "reason" to do business with that Service Department.
Visit the "Staff" link (if there is one) and you will see the Showroom Staff ONLY..
Visit a Dealers FACEBOOK page - hmm, do they have a Service Department at all? You wouldnt know it from the facebook posts.
So with all of that information presented I will now pose to everyone AGAIN - "Has the dynamic of retail operations shifted?"
Showroom Ratio 3:5 | Service Ratio 1:36
Unfortunately - I think the answer is not even remotely! -
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All I can say to that, Tyler is "Wow"! You obviously know where I was going with that! As a Comtroller who really overlooks all the daily processes of the operations of the dealership, that has always drove me crazy. Boy are dealers missing out when they don't see the need for mirroring a sales -like structure to the service department both in managment tiers and sales steps and processes.
In the situation you described here in your post, by the time this poor service manager has handled all the mundane tasks at the end of a long 10 hour day, he looks at his appointment schedule with the attitude of "Oh, here comes another day.!".. rather than enthusiastically preparing for meeting those appointments as opportunities, by reviewing their individual histories, looking for past recommended services, checking for campaigns and recalls, and preparing a presentation for selling them maintenance... When is this illogical nonsense going to come to an end? This industry needs change...change from the daily rituals drilled into our mindsets stemming simply from the repetitive processes which lead us to believe that is the way it is supposed to be! Step away from the operation and take an omnicient view at your processes as if you were a consultant evaluating for the first time. If the current way you are doing things are not 100% effective, call an expert, revamp, and recapture those missed opportunities!
Thanks so much for the post Tyler! I am honored to have a expert like you comment on my discussion! Come back again real soon!
Tyler Robbins said:Nancy,
You pose a fantastic question, I am extracing just a portion of it -
"Has the dynamics of the retail operation of the dealership shifted to Dealer Principals & GMs focusing more deserved attention to the Fixed Operations side of the business"
In adding some thoughts to that portion alone, in my travels I have found that in most dealerships,:
The ratio of Sales/Desk Managers to Salespeople is 1:5
The ratio of F&I Managers to Salespeople is also 1:5
There is a GSM over all of these Managers and Salespeople
There is at least one person in the Office dedicated exclusively to post all deals and calculate commissions for payroll
Many dealerships employ some kind of Delivery coordinator
Many have added an Internet Department (a Manager and a few coordinators) to handle the incoming leads and set appointments for the Sales Staff
In a store with 20 Salespeople, that adds up to approximately 12 Personnel dedicated exclusively to supporting vehicle sales from a Management perspective, or 3 Management Roles for every 5 Salespeople (Ratio 3:5)
A store of this size is likely to have approximately 7 Service Advisors, 25 Technicians, 2 Porters, a Cashier and a Warranty Clerk and one Service Manager/Director.
Thats a ratio of 1:36
This Manager/Director is not only responsible for "managing the sale" in Service, but also doing the payroll calculations for every service employee (no one in the office dedicated to this task like the showroom has), he/she is responsible for chasing warranty receivables (an office task for the showroom), chasing a bad check (also an office task for the showroom), test driving problem vehicles, speaking with every customer who has a "concern", including every Salesperson who has a "spot delivery" at 5pm on a Friday or customer that just took delivery and needs their touch-up paint kit mailed to them, and lastly, but certainly not least, is the person that everyone in the dealership comes to when something in the dealership needs "repair".
Toilet in accounting backed up? Call the Service Manager!
One of the lights on the lot is out? Call the Service Manager!
Someone lost their key to the building? Call the Service Manager, she/he will coordinate getting the locks changed and new keys for everyone.
The Dealers' wifes' demo has flat tire? Dont call roadside assistance, dont send the lot-boy, call the Service Manager!
30 Years ago most dealerships had a Shop Foreman, who relieved the Service Manager from some of the above responsibilities, but during the recession of the early 90s, that role was scrapped in favor of a working Team Leader - no more Managerial help. Service Advisors make their own appointments, close their own repair orders - no managerial support here either.
If the Service Manager/Director was to actually ask for some Managerial support in the form of a genuine Assistant Manager, history and the present has proven - thats not going to happen!
So with all of that information presented I will now pose to everyone AGAIN - "Has the dynamic of retail operations shifted?"
Showroom Ratio 3:5 | Service Ratio 1:36
Unfortunately - I think the answer is not even remotely! -
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Permalink Reply by Jim Richter on
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As a coach and consultant in this area of our business I can answer it with a definite YES! We are getting more interest in upgrading service sales personnel and processes every week, from both retail and wholesale sides of the aisle. Longer terms of ownership coupled with the high cost of attracting new customers that are not strictly price driven in their purchase intent requires a professional environment in service AND parts.
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I wish there were more GM/DP's who thought and managed like you have described, but then I'd have to look for another line of work.
Dan Creamer said:Being the gm. of a store is a little like being a dad. You have five or six children (profit centers) and they all need guidance, direction and attention to thrive and survive. The right mind set regardless of the economic conditions is to constantly work on maximizing revenue in each PC.
Whether you’re in an eleven or seventeen million car market some things don’t change. In both markets the average truck buyer spends $1500:00 dollars on accessories within two months of purchase. You want and need that business. Service absorption is just as important in a good sales environment as in a poor one. Three hours per RO of customer pay labor is not just for eleven million vehicle markets it’s for everyday regardless.
Going to teams and rotating them through the weekend to provide service seven days a week works just as well in either market. Advertising that you work on all makes and models is a given regardless of market conditions. Aggressive use of factory warranty without going over the line and dotting all your I’s and crossing all your T’s is good business all the time.
Training throughout the store from admin to the wash bay should be ongoing, comprehensive and enabling to the employee’s. Cross training of employee’s should be thoughtfully implemented also. Up in the front of the house regardless of the kind of market you want to be able to trust that managers are not just willing but able and eager to get up and close a deal. All managers regardless of their department responsibilities have sales responsibilities as well. All of this requires training to bring into focus.
So to answer your question is service the new sales department? No not in the well run stores that have it hitting on all six cylinders all the time. If a dealer or gm. finds him or herself turning to service in a panic for rescue all it means is that they have not been doing the whole job. They have been ignoring some of their children and that always ends in disaster. -
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