By Darren Militscher, Senior Strategic Growth Manager, DealerSocket

Pre-owned inventory is scarce, yet dealerships have a natural advantage when it comes to acquisition, due to the dozens of vehicles going in and out of their service department every day. Most dealers have tried to establish service drive appraisal programs, but many have been unsuccessful, primarily because they’re going about it the wrong way.

Pulling a salesperson from the showroom and telling them to go talk to customers in the service department doesn’t work for a couple of reasons. First, salespeople work on commission and the percentage of service customers that end up buying a car is too low to make it worth the salesperson’s while. Most salespeople don’t view a day in the service department as an opportunity, but rather as missing out on opportunities.

The second reason that putting a salesperson into the service department doesn’t work is that customers who bring their car in for service do not want to be solicited.

But it is possible to set up a service drive appraisal process. I work with over 100 dealerships and about 25% have very successful appraisal programs. One dealer I work with did 29 deals their first month, and now has a manager and five salespeople in their service department doing 75 to 100 deals a month!

Here’s the right way to set up a service drive appraisal process:

Hire Exclusively for Service

Hire a salesperson (aka appraisal specialist) to work exclusively in your service drive. This person does not work in your showroom or handle Internet leads. Set up a desk or booth in the service department.

Pay them a base salary with small commissions. One dealership I work with hired a young woman with no auto sales experience for this position. Her first month she did 20 deals for a $60,000 gross profit.

Teach these employees how to do appraisals using your established guidelines, but be sure to have your used car manager review and oversee the process.

Service advisors need to be on board. It helps to spiff them for every deal they assist with.

Wait for Hand Raisers

Do not approach customers when they bring their vehicles in. Instead, have banners and signage clearly visible in your service drive that promotes your free market appraisals. Customers can text a number to get a free market valuation on their vehicle.

Once the customer has texted their number then the salesperson can engage, but only after the service advisor has finished with them. Take a soft, informative approach.

When They Don’t Raise Their Hand

For the majority of service customers who don’t raise their hand, leave a packet on the front seat of the vehicle, stapled to the RO. Include in the packet:

—A brief letter thanking them for their service and letting them know you are interested in purchasing their vehicle, regardless of whether or not they buy a vehicle from you
—An appraisal sheet with the market value of the vehicle and the amount that you are willing to offer
—A free CarFax report (promote its value of $39.95)

The packet will plant the seed to get your customers thinking. Most people hold onto the packet because they perceive it as something of value. After a few days of digesting the information, some people inevitably call or come back to ask for the deal.

Packets can be very effective. I have a neighbor who traded in his vehicle four times in a one-year period, just by packets being left on his seat.

Follow Up

For packet customers, wait two to three days before following up. This allows the customers to think about it and consult other decision-makers. Call the customer to touch base and see if they have any questions about the appraisal. Most times they will say they are not interested. Ask for an estimated time when they think they will be in the market and enter it into the CRM as a scheduled activity.

If a customer says “Thanks for the appraisal, but I think the number is low,” you know there is some interest. Try scheduling an appointment with them in the showroom to see what incentives they are eligible for.

What to Expect

The most successful service drive appraisal programs have a closing percentage of around ten percent of total customers, versus 50 percent in the showroom. This can yield significant revenue, depending on the volume of your service customers.