Ever wonder how much in profits is left on the table from declined repairs?
If no efforts are made to sell the job after the customer declines the repairs, the store is missing out.
Tracking Declined Repairs
Tracking declined repairs is essential for follow up. The easiest method to track declined repairs is to create a unique labor operation code on the dealer-management system.
The service advisors should use the decline repair op code for every repair that's declined. The advisor can write appropriate comments about the declined repair that are important for follow up, as well as for vehicle repair history and customer information.
Once a unique code is assigned, simply run a labor-operation report for the designated declined repair-op code. The information from the report can be transferred to an excel spreadsheet for easier sorting and handling for customer follow up.
Now that the information for declined repair is being reported and tracked, what's the best procedure for follow up?
Create a Follow-Up Action Plan
There are a few different reasons that customers decline repairs. As part of the action plan, there should be a solution to address the reasons. For example:
- The customer can get the repairs done cheaper at an independent shop
Price matching the independent might be a consideration. Let the customer know the advantages of dealership repairs.
- The customer can't afford the repairs
Find out what the customer can afford and if there's enough profit to help the customer. A deferred payment or a no-interest credit card may be options.
- They don't feel that the repairs are a necessity
Some repairs aren't, but if needed repairs are a drivability or safety concern, explain to the customer why the vehicle should be repaired.
- The repair costs are more than the vehicle's worth
This is a perfect opportunity for a vehicle sale.
- The customer can't be without the vehicle while it's being repaired
Offer a loaner.
Phoning is the best method for following up. A letter and email are impersonal and can't answer questions that the customer may have. A manager or other designated person can call.
But the service advisor who initially wrote up the customer is probably the best choice because:
- The advisor has already established a relationship with the customer.
- The advisor is familiar with the customer's concerns and necessary repairs.
- If the advisor is compensated based on performance, and has a financial incentive to get the customer back in for the repairs.
Empower whoever contacts the customer. If service advisors make the contacts, they need to be able to offer a discount or beat a competitor's price.
There may be situations where a manager is a better choice to follow up. The service advisor should make that choice and discuss it with the service manager.
Time is of Essence
The longer it takes to follow up on declined repairs, the greater the potential to lose the sale altogether. It's best to follow up on declined repairs at least by the following business day.
Quick follow-up reduces the chances of the customer shopping the competition or purchasing a vehicle elsewhere. If the action plan calls for the service advisor to contact the customer, that should be done by the next business day.
Each morning, conduct a quick advisor meeting to discuss the previous days declined repairs. The meeting should include what actions were taken and the outcome of previous follow ups. If the repairs are declined after follow up, discuss other options that may bring the customer back in for the repairs.
Contests and Incentives
To help facilitate getting the customer back in the shop for repairs, a contest among service advisors could be part of the action plan. There's nothing like a little competition and bragging rights to get the ball rolling.
The contest could be based on the number of customers that were brought back into the shop or total parts and labors sales from declined repair follow-ups.
Whatever method is used to follow up, do it routinely, preferably daily.
There's just too much profit potential at stake to simply accept a repair decline without any follow-up action.
James Clausen has more than 25 years experience in fixed-operations management at the dealership level.