There is only one way to increase your retail (customer-pay) service department revenue: sell more service! After reading the previous sentence my friend and co-worker, Ray Carter, would say, “ya think?”
I realize this strategy of selling more service is stupid simple, but frankly it is the only way to grow your business. Face it; your labor and parts department will not be built on warranty and internal repair orders. Neither will you see any growth by simply reacting to “broken cars”…in other words waiting for something to break before you start seeing any money flow in your direction.
Nothing happens until somebody sells something! This is one of the fundamental truths of the automotive business.
So whose job is it to do all this selling? Every dealership employee! It is important that every employee knows his or her role in the service sales process.
This article will focus on the technicians, but before we discuss that, let me give you some examples pertaining to other employee groups.
Advisors sell service by educating the customers and asking them to buy.
New and used car sales associates play a key role in selling service by introducing car buyers to the service department.
Shuttle drivers sell service by discussing preventative maintenance with customers while they are driving them to home or work.
F&I personnel sell service by presenting a service menu to every vehicle buyer.
Management sells service by teaching, coaching, and modeling the sales process to every member of the team.
Owners and dealers sell service by holding everyone accountable from the top down. Dealer Brad Fenton of Fenton Motor Group says it best, “What you treasure, you measure!”
Everyone must pull together and do their part in order to maximize the service sales opportunities.
No one is more critical to the service sales process than your technicians. This group of dedicated, factory-trained professionals spends more time with the vehicles than anyone else on your team. Unfortunately, most technicians don’t view themselves as “salesmen,” they think that it’s somebody else’s job. Nothing could be further from the truth!
Joe Gibson is the service director for Jim Glover Chevrolet in Tulsa, Oklahoma. He implemented a technician sales incentive program that averages a 20-fold return on investment.
You read that right, for every dollar he invests he is seeing over $20 flow into his parts and service departments.
Gibson keeps a box full of play money in the service office. Whenever a technician upsells at least one hour of repair or maintenance on a vehicle, he reaches in the box and pulls out one bill. Every day Gibson redeems the play money for real money. We are talking about cash, green backs; or as my daddy used to say, “foldin’ money!”
“The daily cash pay out is the centerpiece of the program,” Gibson emphasized. “Everyone is looking for instant gratification and with this program they get it!”
The box contains 60 bills in the following denominations: (2) $100, (4) $50, (6) $20, (12) $10, (12) $5 and (24) $3. The total in the box is $772.
The drawing continues until the box is empty. Then Gibson refills the box and they start all over again.
Since it requires at least a one-hour up-sell, Gibson is guaranteed at least 60 hours out of one box of bills, but he gets a lot more than that!
Over the past five years the dealership has averaged $16,000 in parts and labor sales per $772 investment!
This is a winning situation for everyone. The techs keep their “opportunity eyes” open, the dealership retains maintenance and repair dollars and most of all the vehicle owner benefits by having a safe, well maintained car.
What about abuse? Gibson says it hasn’t really been an issue, “You have to inspect what you expect.”
“If the techs abuse the program it’s because you let them abuse it,” he added.
Here are a few more rules they follow:
1) Only one draw per RO no matter how many hours are up-sold.
2) The tech that sells the work performs the work (as long as he’s qualified).
3) Technicians write their name and the RO number on the play money when they exchange it for cash.
4) Taxes, FICA and other deductions are taken out of their regular paycheck.
5) Each play money bill is sealed in a small envelope before it is placed in the box, that way it is a purely random draw.
This is fun…and it works! A $772 investment for a $16,000 return…not bad!
Go ahead and implement this right now in your service department. It won’t cost you anything and it will generate excitement. Don’t over think this…just do it!
E-mail me if you need any clarification or a template for printing the play money.
On a personal note, I will be at the NADA Convention in Orlando this year. I’ll be in the Dealer magazine booth on Sunday, February 14 from 9am – 10am. Please plan on stopping by to see me…I’d be honored to meet you.
