Scare Tactics Hurt Business

In their quest to achieve 2.0 to 2.5 hours per repair order, many dealerships hunt for the magic pill. Many believe it's in fluid sales because vendors and distributors promise increased sales and additional gross profit. They convince the service and parts management staff that fluids and flushes are the way to achieve profitability and the return to 2.5 hours per repair order. But what does it do

In their quest to achieve 2.0 to 2.5 hours per repair order, many dealerships hunt for the “magic pill.”

Many believe it's in fluid sales because vendors and distributors promise increased sales and additional gross profit. They convince the service and parts management staff that fluids and flushes are the way to achieve profitability and the return to 2.5 hours per repair order.

But what does it do to the long-term retention of the client?

Service sales should be made based on the client's needs, not a made-up set of recommendations to increase hours per repair order. When a spiff is involved, some service advisors focus on the spiff, not the well being of the client's vehicle.

I've seen advisors “high five” each other when they sell the “royal flush” service consisting of the entire list of flushes or fluid replacements.

It's not entirely the service advisors' fault. In many cases, it's the service manager who pushes them to sell.

A service manager once proudly told me their top-gun service advisor made an additional $10,000 in spiff money paid to the advisor directly from the vendor.

Many dealerships have a policy preventing employees from receiving premiums or gifts directly from vendors. When you knowingly allow your advisors, technicians, service and parts managers to accept these spiffs from vendors, how can you enforce this policy?

Can the sales manager now accept a spiff from selling used cars at a discounted price to the wholesaler?

Instead of allowing the vender to spiff employees directly, consider asking the vendor to lower the wholesale price of the product, letting the dealership increase the gross-profit margins. Most companies will do it. You now control the spiff and most likely the behavior of advisors.

Auto makers have gone as far as advising dealers that many fluids and flush services are not needed and could damage vehicles. Many owner's manuals offer similar advice. What does it do to our credibility when we recommend services the manufacturers don't support?

Review with your service manager the services your department offers. In my opinion, there is value in the complete fluid replacement for the transmission, evaporator cleaning and (possibly) fuel injection cleaning.

Some service managers, who claim to know more about vehicles than the engineers who designed them, say these flush services are valuable and needed.

Well, if we are going to sell them, then we need to develop ethical ways to present them.

Pressuring the client does not work in the long run. Scare tactics should never be a component of the sales process. Such behavior risks driving clients from your stores.

What causes your sales to go up today can cause your traffic to drop tomorrow!

Our service business continues to evolve. We have witnessed a transformation from a “quality-focused” business (high hours per repair order) to a “quantity-focused” business (lower hours per repair order) with a higher level of client retention as part of the business plan.

We now need two customers to give us what one did three years ago. Our business requires that we focus our efforts on keeping them.

Making money is a requirement of your service department. That means we should never allow opportunities to pass when the client indeed needs a service or repair.

We must present our services to the client in a manner that earns their consideration. If they do not buy now, use a system to follow-up with them and ask them to reconsider the work at a later date.

Position the dealership as the first consideration in auto maintenance and repair in the client's mind when a need arises.

Make your service department a friendly and ethical place to do business, with no pressure placed on the client. The methods you use today will determine if you are given another opportunity to serve the client tomorrow.

Lee Harkins, president of ATcon in Birmingham, AL, is a dealership management consultant and industry speaker. He is at 800-692-2719 and [email protected]

Questions or comments about this column? Send us an e-mail at [email protected].

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