By Dan Beres, Managing Partner, Recall Masters, Inc.
In search of service revenue, dealerships turn to randomly scheduling service appointments, regardless of shop capacity. Or they take everyone that drives up. This can overwhelm the service department and frustrate customers, causing a LOSS in service revenue from both new/drive-up customers and customers with appointments.
How many times have you heard about the customer that made an appointment for a quick service and had to wait hours for an oil change? Or what about the regular customer who showed up at the time they arranged with the dealership, only to suffer through a long wait time because nobody knew about their appointment? This can drive even your most loyal customers to the independents.
The truth is, consumers would prefer to service with the dealership. A July 2019 survey of 16,000 consumers revealed that three out of four consumers would prefer to service at a franchised dealership even after their warranty expires. So, if service at the dealership is perceived as the optimal choice, why are franchised dealers losing loyal customers to independents? The answer to that question is tied to convenience. Consumers are tighter on time. For some, it comes down to cost, but almost all consumers are pinched for time, more than cash.
And, if you allow someone to cut in line, that is how your scheduled customers will view those who pull up unannounced. Ideally, the number of cars coming into the service department should be the number that it can support efficiently. However, many service advisors take on all coming by, even if they are overbooked with appointments and service pending from existing vehicles. So, what happens? Traffic jams.
According to an article posted on Digital Dealer, the top 20 percent of a dealership’s customers account for 79 percent of its profits. And, by replacing just half of the bottom 20 percent with customers similar to the top 20 percent, a dealership can increase its profit by 40 percent!
It may be worth taking a look at the cost of overbooking and going beyond your shop capacity. Perhaps a better idea is to focus on efficiently completing existing work, even if that means turning away drive-ins. Yes, that’s hard to do. But, in the end, if you are transparent with a “walk-in” and explain you are turning them away for their convenience, you can win them over. You can also offer an incentive for returning with an appointment or rescheduling for a more convenient time. That way, you stand a better chance of retaining a customer, keeping them happy, and continuing to earn their business.
If you don’t want to or can’t afford to invest in expanding facilities, there are many solutions available to maximize your shop while keeping customers satisfied. These may also be worth investigating.
About the Author
Dan Beres is a managing partner of Recall Masters, Inc. Dan focuses his efforts in their Enterprise Services Division, OEM Relations, and Strategic Partnerships.
