Boost your dealership’s profitability with superior customer service.
As new car sales lag and variable per-unit profit margins decrease, more focus must be placed on fixed operations to absorb costs and remain competitive in today’s market.1 The battle for sales margins is a losing one; consumers can price shop a vehicle across the world with a single online search. But technological advancement is a double-edged sword, and dealers have an opportunity to capitalize.
More technologically complex vehicles beget an increased value of specialization, technician certification, and service advisors equipped with OEM-specific expertise. Dealerships are uniquely equipped to service today’s vehicles and need to position this as a primary selling point to consumers.
Building lasting relationships and retaining lifelong customers depends on a well-oiled service machine, and the most important salespeople in today’s dealership are the service advisors. If they sell service effectively, the dealership will prosper as one-time customers become lifelong patrons and advocates, returning to buy vehicles and telling their friends and family to do the same.
Despite the increasing importance of the back-end, customers are all too often met with frustration, subpar transparency, multiple transfers, and a half-hearted voicemail message when scheduling a service appointment. Why?
This is especially disheartening when recent CallSource automotive data shows that 75% of inbound phone leads are calling into fixed ops at dealerships. The qualities of communication we love in salespeople have been historically frontloaded to the sales floor under the notion that a dealer’s success (or failure) is the consequence of sales activity. This mindset is so entrenched in the industry that we’ve come to accept service revenue as “fixed” and “consistent,” but these category distinctions are restrictive.
It’s time to break down the silos and start selling service.
The first step to improving a service department is to recognize and optimize the channels through which the dealership communicates with the customer. There are two primary channels in the service appointment-setting process.
Every dealership should have a user-friendly online scheduler. But, don’t be overly reliant on this channel. Phone calls to the service department are on the rise.1 The phone is the lifeblood of the dealership and the first/primary point of contact for most customers.
Below are five steps you can take today to improve your service department’s performance.
1: Assess Call Data
How many calls are going to voicemail?
What percentage of inbound calls are service appointments vs. service status?
How many rings are customers hearing before speaking to a live person?
To answer these questions, call tracking and processing are essential. These technologies enable dealers to define KPIs, determine where there is room for improvement, and track these metrics over time.
2: Increase Connectivity
CallSource data shows that over half of customers do not leave a message when forwarded to a voicemail. But, service connectivity remains stagnant around 80%.2 What are we to make of the 1 out of 5 calls that do not connect to someone in the service department?
I think it is safe to say that these are lost opportunities. If the caller was interested in an appointment, they would move on to the next option. If they were inquiring about the status of their vehicle, they’re now the victims of poor customer service and are less likely to do business with the dealership moving forward.
There are two ways to offset this and increase connectivity immediately.
- Route calls back to reception/BDC after a set number of rings (4-5) so that customers are not sent to advisors’ voicemails
- Send status updates proactively to reduce inbound call traffic and improve the customer experience (See Step 4)
KPI – Answer Rate
3: Improve Phone Performance
Of the 80 dealers in a recent study published by FixedOps Magazine, it was found that “Only 10 percent stated that their teams were trained on a specific set of word tracks [and] only 10 percent stated they have scorecards for grading the performance of their Appointment Coordinators’ inbound calls.”3
This is an alarmingly low number – especially given the fact that “customer skills trump technical skills for service advisors.”4
Phone handling standards must be set, tracked, and scored for accountability and growth. CallSource scores phone handlers in key categories that directly tie into word tracks developed & trained by industry veterans.
Every call handler should know his/her appointment conversion rate and the goal conversion rate set by the dealership, as “effective call handling can increase conversion rates from an average of 30 percent up to 90 percent.”5
KPI – Appointment Set Percentage & Performance Scorecard
4: Offline Status Updates (Texting)
Establish an opt-in process to text service status updates. It’s convenient for the customer, keeps them informed, decreases inbound call volume, and improves CSI scores as “…scores tend to increase when car dealership service departments use customers’ preferred methods of communication.”6
5: Proactive Outbound (Service BDC)
Make proactive outbound efforts to increase service revenue. With a BDC or without, periodical outreach for birthdays, vehicle purchase anniversary, potential recall notices, oil changes, etc. should be the established process.
For most dealers, the end goal should be a service BDC. It can generate up to 1 million dollars in additional revenue through a carefully managed daily outbound calling campaign.3
Increase Your Service Skills, Increase Your Profits
For more information on how to increase your team’s phone skills and make your service department a higher priority, reach out to a CallSource Automotive Specialist to learn more about Own-Set-Close: Phrases and Skills to Sell More Cars.
Feel free to leave comments below with how you’ve made the service department a profit-machine at your dealership.
2. CallSource Internal Data/Automotive Insights
3. Meier, Kolbe. How a BDC Goes Wrong. Fixed Ops Magazine, January/February 2019.
6. J.D. Power 2019 Customer Service Index (CSI) Study.SM