Drivers are holding onto older cars. The average age of vehicles on the road today is a geriatric 12 years, according to Car and Driver Magazine. The pandemic, the resulting economic uncertainty, and manufacturer shut-downs that made new vehicles scare over the last year, are all factors in this trend.
Although most OEMs have ramped up production and new vehicle sales started strong in 2021, there are still new risks emerging, such as the global semiconductor shortage and the potential for additional disruptions, that could affect new vehicle inventory and sales, according to the JD Power January forecast.
More older cars on the road needing service, and the potential for low new vehicle inventory levels moving forward, make your service department more important than ever as a primary source of revenue.
This is an opportunity to think about how you want to grow your service department business. What are your revenue goals? The roadblocks you need to eliminate? What are the opportunities you can create or capture over the next year?
The business is there for the taking, and there’s never been a better time to disrupt standard practices as we all grapple with a new normal. Here’s how to set your growth plans into motion.
Calculate realistic growth goals.
If you don’t know your potential capacity, how can you measure growth? You need to set realistic growth goals based on your staff, number of bays, and hours of operation. A good place to start is with your 20 Group. Ask members with a similar number of technicians for a daily average of vehicles serviced. Are their numbers higher than yours? Dig deeper. How are they marketing to current and potential customers? Are they using a dedicated service BDC? What is feeding their success?
Then, turn to your own reporting. Pull DMS reports for the average number of vehicles your department services on a daily, weekly, and monthly basis. When do you see lags in productivity? When do you see upswings? Can you correlate those ups and downs to particular marketing campaigns, for example?
Consider if you have a time of day problem. Are your bays open until 7 but the last appointment is usually set for 6? This could indicate that Service Advisors are reluctant to schedule late-day services because they want to go home earlier, even though you have capacity.
Declined services could also be cutting into your revenue. Pull declined service reports for the last month, 6 months, and a year. High numbers can indicate your customer follow-up is weak, or staff wearing multiple hats don’t have the time to conduct proper follow-up.
Once you calculate how much work you can handle in a day, then you can set realistic goals and put strategies in place to meet them.
The biggest roadblocks I see to consistent business development are lack of time, lack of accountability, and lack of measurement.
Few service advisors have the sales skills or time to do consistent outbound business development. They’re dealing with ringing phones, customers in front of them, and questions from techs. The best they can do is pick up those inbound calls.
That leaves hundreds, maybe even thousands, of outbound call opportunities going to waste. Few dealers even know how many follow-up service customers are in the CRM because there’s no process in place to aggregate and easily pull call lists.
No time and no process leads to no accountability. Sure, you can give a service advisor a printed list of names to call each day. Do you know if they make the calls? Are there any repercussions if they don’t?
Finally, why even add the burden of outbound calls if you don’t have a good way to measure results? Without measurement you’re spinning your wheels and asking staff to perform tasks for which they are under-equipped. This wastes energy and frustrates your staff.
Find your opportunities.
Faced with many of these roadblocks, Parkway Toyota, in Englewood Cliffs, New Jersey, created and captured opportunities using a service department-only business development center. As detailed in an Automotive News article, the BDC handles inbound customer calls for things such as service appointments, and also initiates calls, emails, and text messages to drum up business from customers who, for instance, declined recommended service on their last visit.
Fifteen technicians and three express-service teams of two technicians each currently service about 80 cars per day. The goal with the help of the BDC is to get closer to 100 or better. Fixed operations director Nick Latino is confident they will get there, especially now that they have the expertise and man-power to maintain contact with existing customers.
A service-only BDC is a good strategy to overcome business development roadblocks, but you need the right people, tools, and process. Cast the net wide for a prospective BDC manager who demonstrates self-motivation, integrity, adaptability, and persistence. Depending on your budget and growth goals, hire one or two more agents to work for this manager. Don’t constrain your search process to only those with automotive knowledge. That can be taught. It’s more important to hire for intrinsic personality traits that make for good agents. Create a competitive hiring package and incentivize performance with a clear bonus structure.
Over the last decade, a wealth of call center software has arrived to help streamline the workflow and raise the productivity of BDC agents. Research omni-channel call center software that provides a central hub that includes data management, automation, and campaign management. It’s a waste of time to ask your team to spend time compiling customer lists and reports, and analyzing the results, when software can do it faster and more efficiently. As an added bonus, the right software provider will offer agent training and proactive support to help you succeed.
Finally, you have to measure the metrics that matter. The most important are contact rate, effective rate, and agent productivity rate. As every service department is different, be wary of set-in-stone industry benchmarks. The right call center software will track these metrics for you so that over time, you get a clear picture of what produces the best results for your department.
The trend of older cars on the road needing service, and the potential for low inventory levels moving forward, make your service department more important than ever as a primary source of revenue. Follow this 3-step strategy to ramp up business development and earn your share of that business.