A domestic auto maker's research shows only 25% of its dealership car buyers become service department customers.
Industry data shows only 18.4% of customers that do not return to the service department will end up buying from that dealership again. That number, however, jumps to 47.4% when the customer has a service appointment within the first three months of buying the vehicle.
According to the National Automobile Dealers Assn., the average service department generates $150,000 in monthly revenue.
Stores losing 75% of customers after the vehicle purchase means a potential service department loss of $600,000 in revenue — or about $225,000 in profits each month.
Customer surveys reveal that lack of convenience is the No.1 reason customers don't return for service. Price and trust are second and third.
Customers who might want to set up a service department might not even be able to get through on the phone. DaimlerChrysler surveyed 100 of its dealership service departments and found the average hold time on the phone was five and half minutes.
The answer is to make it easier for customers to return to the dealership for service, says Neal East, COO of Xtime Inc., a company that offers dealerships a management system designed to do that.
The system has two elements. One allows customers to set service appointments on the dealership's web site in real time. Once the car is dropped off, the customer online can check on its status.
Because the system integrates with the dealer management system (DMS) real-time, customers can see what appointment times are available. Once they enter their information, it gives the service advisor more time to advise and up sell if necessary.
Today, service advisors spend at least 35% of their time managing and setting of appointments. The repair order screens on today's DMS are complicated and usually require a service advisor to manipulate, making it difficult to hand off appointment scheduling duties to someone else. Meanwhile, phone calls go unanswered and customers get frustrated and take the vehicle somewhere else.
Often, the appointments are scheduled for early morning, resulting in a backlog of customers. Service advisors then rush the customers through, spending only a couple of minutes with each.
The second element was obvious, says East. “The answer is not to get rid of the DMS,” East says. “Instead, we thought, ‘Let's take the e-scheduling solution that any $8-an-hour employee can use and implement it into the dealership's processes.”
Some dealerships have hired people just to set service appointments. They answer the phone calls and enter the customer information.
Dealerships can set how many appointments to schedule for each advisor. Appointments can only be set for available times. This allows the service advisor time to spend enough time with each customer.
John Lee founded Xtime six years ago. It began turning a profit last year and is starting to get attention from auto makers and some large dealer groups.
Eighteen months ago, the company signed a contract with DaimlerChrysler to provide the system to its North American dealers. This year, Xtime launched a non-OEM-specific system now in 250 dealerships.
One dealership client, Jolly John Auto Center, a Chrysler-Dodge-Jeep store in Saco, ME, reports a 30% increase in repair orders since implementing the system 15 months ago. John Williams, service director, reports increasing customer retention from 25% to 75%.
Here's how dealerships can implement e-scheduling of service appointments.
Highlight the service everywhere
Make it front and center on the website. Include it on the dealership's voice-recorded phone messages — especially on those that customers hear while on hold waiting for a service advisor.
Sell the benefits when the vehicle is purchased
Ask for an e-mail address at point of purchase. Then send e-mail service reminders with links back to the scheduling page online.
Sell the benefits to the staff
Having the tools to do the job right and more efficiently along with the potential for increased earnings should be an easy sell.