Less than 10% of used car buyers return to the dealership for customer-pay service work.

But don’t take my word for it. Run the numbers and see for yourself. Run the VIN numbers for all the used vehicles you sold in 2009 and compare it to the VIN numbers that generated a customer-pay repair order from January 2009 to present.

I’m guessing it is a painfully low percentage.  Let’s dig a little deeper and see what the profit potential is if you retain your used car buyers as loyal service customers.

Plug your numbers into this simple formula:

For example, if you sold 1,000 used cars in 2009, if your average customer-pay RO is $200, and if you see service customer three times per year, then your revenue potential is $600,000.

Also consider, the average used car gross is around 12% while the average service gross is 70%.  You are only going to sell that used car once, but you will be able to service it for life — if you purse the opportunity.

It’s no secret there is more gross and net profit to be made servicing vehicles than selling them.  Additionally, there is only one way to have a satisfied used car customer return to your dealership as a loyal purchaser of their next vehicle.  That one way is to make them a loyal service customer.

It is an old, but true, axiom: “The front end sells the first car, but service sells the second car.”

So why do so few used car buyers return to the dealership for service?  In a nutshell, it’s because they are never invited back.  Or worse yet, I’ve known some used car sales managers and salesmen who didn’t want the customer back.

They are hoping the car never shows up on the service drive.  They fear the advisors will recommend a maintenance or repair service and the customer will say, “Hey, why wasn’t that taken care of before you sold it to me.”

Of course, the chances of this happening go way down when maintenance issues are dealt with during the used car inspection and prep process.  But, that’s a topic for another article.

My 19 year old daughter heads off to college this fall and she had had a bellyful of driving our 12 year old family minivan. We headed to the dealership with the understanding that this is the last car daddy will ever purchase for her.  Its purpose is to get her through college and into life as a young professional.

After several days of looking, lots of painful discussions, and a few tears, we found a clean, low mileage import crossover that both of us could live with.

The deal went smoothly, the salesman and sales manager were gracious, the F&I process was quick and thorough, and most of all, my daughter was thrilled. It was a wonderful buying experience and my wife and I were heroes in the eyes of our teenager which is priceless.

That said, I must tell you that I will probably never return to that dealership again. Why? It’s simple. There is no reason to go back. They sold me the car, but did nothing that led me to believe that they wanted any future business from me.

The salesman reluctantly pointed out the service department to me. He said something like, “My manager makes me do this. We have to. Sorry.”  I didn’t get a menu or a maintenance schedule.  I wasn’t invited to have my future service work done at the dealership.

I have never received a note from the service department telling me it’s time for the car to be serviced.  Four months after the sale, the service manager did leave a pre-recorded message on my voicemail telling me I’d missed my service visit. Although there was not a service visit scheduled.  By that time, I’d already taken the car somewhere else for its first service.

Therefore, I am a 100% satisfied car buyer who will never return to the dealership.

Over the next six to eight years we will spend thousands of dollars in maintenance and repair on this vehicle and the selling dealer won’t get a dime because they didn’t ask for the business at the time of sale.  They didn’t even “plant the seed” for future service work.  Tragic

Question: Do you think my car buying experience has ever been repeated at your dealership?  Ouch

You invest so much time and money to attract customers to your dealership. You invest so much time and money training your people to sell cars.

Why not invest some time and money into retaining those customers in the service department?

Here are some practical steps you can implement right now:

-Have your F&I manager give each car buyer a copy of your service menu.

-Insist that your service team send a card to each customer inviting them in for their next maintenance service. Send this note 90 days after the date the car was purchased.

-Train your sales staff on the importance of introducing each customer to the service department. The more loyal the customer is to the service department, the more likely they are to buy another car from you.

-Implement a used car protection plan that includes roadside assistance. Tie this to some type of “engines for life” program or “preferred customer” initiative. The goal here is sustainable loyalty through rewards for having all their maintenance done in your shop.

Let me know if you need any more information or help in getting these initiatives launched and sustained.

The vehicle owner wins by having a safe, reliable vehicle that is trouble-free and fun to drive. The dealership wins by increased profitability and customer loyalty or life.