Published in Automotive

Your Other Showroom, the Service Center (the loyalty loop)!

Vehicle Acquisition Center, Recall Relationship Center, Loaner Center, Vehicle Service Contracts/Maintenance Contracts Center and the LOYALTY LOOP! (more about the details of these below)

For two years prior to my present position, I was stationed in the Group 1 Automotive Service Development Center (SDC) in Houston. That’s where I learned a lot about the dealership service business by taking service calls for all of the Group 1 dealer service centers nationally.

And if you think that job was all about simply scheduling appointments, better think again. It was a prime opportunity to establish either a “great or poor” customer relationship with the callers. First experience encounters at dealerships are critical touch points for an already skeptical and sometimes fearful customer.

In addition, I would visit many of our Houston area dealer service centers on my days off to see what the reality was like on the firing line (Houston was our hub with 18 Group 1 Automotive stores here).

But now I’m in the best position ever to see how the dealer service center really works; as the Customer Retention Manager (service) for a very large volume, well reputation-ed Buick GMC dealer in Houston (a great car market, by the way).

The recession, coupled with the huge onslaught of recalls, has really gotten the attention of the OEMs as to the importance of their service centers (what has always been called the “back end” of the dealer model).

There has always been a saying in the “back end” (let’s abolish that identity right now, shall we!) that “sales sells the first vehicle and service sells all the rest!”

Well, guess what? That cute little phrase has become a reality with the OEMs and the “smart” General Managers (who have traditionally come from the sales side).

Here are the departments (or maybe future departments) for the “other” showroom, the dealership service center.

Vehicle Acquisition Center

What’s that, you ask?

There’s a new “big idea” in auto retailing that is just gaining its legs. It’s called “equity mining” and here’s an article about it.

But if dealers don’t sew it right, it will turn into just another reason for car care customers to defect to the independents and repair facility chains.

How do you do it right? First, eliminate that “Sell Us Your Car” signage and mindset from everywhere in the dealership. Second, hire for service skills first, sales skills second. Third, construct an extra low pressure “story” of why you are doing it…that the customer will believe.

The third one is critical and it will make perfect sense to a customer base who is already skeptical of your every move. Make it reflect that the number one priority in this program is obtaining first class, worry-free pre-owned cars to sell. By worry-free, I mean a “better” used vehicle because the buyer, in many cases, will have the complete service history to review (and it’s basically the truth, too).

Pre-owned and CPO (future) Inventory Center

A natural evolution to launching and fine tuning the Vehicle Acquisition Center (above).

Why would dealers have to go to auction, when, in many cases, we have a much higher quality used car coming as a result of the trade for “exchange” customer.

In fact, I’m seeing a new brand of Pre-owned vehicles coming out of our lane, a vehicle that was bought here and serviced here…and ONLY HERE! Isn’t that a much more sale-able vehicle for a consumer already scared to death of buying a mystery?

Recall Relationship Center

I believe that most would agree that recalls are pretty much here to stay, right? But most service centers still lack a specific plan to leverage them properly.

I believe recalls are a “sleeper” opportunity for service centers to 1) gain new customers and customer pay business, 2) secure possible prospects for future sales, and 3) recalls are still so new, we still aren’t aware of all the possibilities yet.

However, we know this: the impact of recalls on customers has been positively received so far. The customers I have spoken with seem to have the opinion that it’s a positive act on the part of the OEMs from a safety standpoint. But it will only stay that way if their experience goes well at the service centers. (I’ve had personal conversations with 100s of them via my last job with Group 1 Automotive)

Loaner Center

I don’t know about you, but I was completely caught by surprise to see that brands like my store, Beck & Masten Buick & GMC, have an incredibly large fleet of loaners.

And the loaner “experience” will be a big part of the vehicle acquisition center process. Not only should that process include demonstrating the (new) loaner model features (for those service customers with older model vehicles), that process should also attempt to provide as close to a match for the potential “equity exchange” vehicle as possible.

In other words, try to match the loaner to the potential new car choices for those positive equity prospects.

It always made sense to me that the potential buyers who rent a make/model of an impending vehicle purchase ahead of time are the smart ones.

Vehicle Service Contracts/Maintenance Contract Sales Center

This has been around forever but with the new cry for a more transparent F & I process, the potential for ramping this effort up in service is imminent. After all, who better to dramatize those costly auto repairs than the service advisors.

All in all, the service center potential to affect future purchases of vehicles is rather dramatic when you really break it down.

The Loyalty Loop

If you analyze the average number visits a new vehicle buyer makes to a dealer, the service center visits (customer touch points) will most always dramatically outnumber visits to the showroom.  Most OEMs offer at least 2 FREE VEHICLE MAINTENENCE VISITS to encourage the showroom buyer to return to the service center.

It’s pretty clear from the image below that “loyalty”, leading to repeat vehicle purchases, is mostly built in the service department for those using the same dealer’s service center. More about the loyalty loop in another Café post.

The Loyalty Loop