I love it when dealers personally get involved in fixed operations. Savvy dealers know the value of the service drive when it comes to customer retention and overall dealership profitability.
David Slone is one of those dealers. When it comes to the importance of fixed operations, he gets it. Slone and his partner Travis Woods own Superior Automotive Group in Northwest Arkansas. Superior is a group of fourteen domestic, import, and high-end dealerships located in four cities, from sophisticated metro areas to rural farm and ranch communities.
In April 2013, they recruited Tim Martino to relocate from Massachusetts and take the reins of their diverse parts and service operation. Martino quickly evaluated the situation and found the most pressing need was to stop declining traffic counts and get the group back on a success track of customer satisfaction resulting in customer retention. It worked. In less than a year, service drive traffic was up over 25% and growing.
Phase two of Martino’s plan was to create a sales culture on the drive. There is a huge difference between a selling culture and an “over-selling culture”. Martino created the former after inheriting the latter. I have always believed the primary job of a service advisor is to sell service. But there is a special place reserved for the advisor who over-sells service; it’s called the unemployment line.
Martino’s approach is simple, straight-forward, and easy to understand. On the drive, after writing up the primary item, the service advisor is expected to “sell the inspection, then sell the results of the inspection”.
Sell The Inspection
Just to clarify, the multi-point inspection is free…there is no cost to the customer. The goal here is to “sell” the customer on the value of having a factory-trained technician inspect their vehicle and it lays the foundation for the “sell the results” phase of the process. Selling the inspection is a great way of informing the customer how much the dealership cares about their safety and overall driving pleasure. It is also a gentle way of letting them know there is “more to cover”.
Sell the Results
When the technician has completed the multi-point inspection, then the service advisor connects with the vehicle owner and makes his most important presentation: the sales presentation. This is the centerpiece of the entire customer/advisor interaction process. This is the moment of truth. Everything that has occurred up to this point in the customer experience has set the stage for this vital step. If the advisor drops the ball by not offering all of the technician’s recommendations, then all is lost.
In order to increase their closing ratio, the advisors at Superior Automotive Group are taught to explain the technician’s recommendations, offer the maintenance or repair solution, and ask the customer to buy. “It’s not complicated,” Martino stresses. “Explain, offer, and ask. What could be easier?!”
The Advisor Pay Plan
“We pay our advisors a percentage of the total parts and labor retail sales price,” Martino explains. Their pay plan is heavily weighted toward customer-pay invoices. “Why would we reward them for writing up a warranty RO or an internal RO? There are no sales opportunities,” Martino says, “but customer-pay ROs are another story; there are all kinds of selling opportunities. Therefore, we pay four of five times more percentage commission on customer-pay.”
Martino continues, “Our advisors know what they’ve earned the minute they make the sale. They simply multiply the retail parts and service sales price by their commission percentage and they know how much they’ve made. We want them to sell everything, from tires to headlight restoration, from fluid exchanges to major repairs, from brake jobs to tail lights—as long as it’s customer-pay, the percentage is the same.”
Okay, so using this approach, who wins? Everyone! The techs, the advisors, the managers, and most of all the vehicle owners, because the more maintenance they buy, the less catastrophic failure and downtime they’ll have. The lesson here is that if you want to increase customer-pay revenue, if you want advisors to present all the technicians’ recommendations, and if you want them to sell needed services, then reward the advisors handsomely for doing it. Martino does, and they do! (By the way, what happens if they don’t? Did I mention the unemployment line?)
If Superior Automotive can do it in their service departments, then you can do it in yours! The process is simple, easy for management to communicate, easy for your personnel to understand, and highly effective. I’d suggest you make it the topic of your next service sales meeting, because it really is a game-changer. So hats off to David Slone, Travis Woods, Tim Martino, and the entire Superior Automotive fixed ops team! Well done! You guys are an inspiration to all of us. Happy sales to you!