Pub. 58 2017-2018 Issue 1

18 Mining for Gold on the Service Drive By Demetrios T. Lahiri, BA, BS, MBA, Vice President of Sales W hen a dealership delivers an average of 150 vehicles per month, they will have 1,500 repair orders (ROs) per month on the service drive. Therefore, the opportunity for additional sales is much greater on the service drive than up front on the showroom floor. Although the service drive may write 1,500 ROs per month, at least half of those are internal ROs, or duplicates on the same customer(s). With that, using 750 unique ROs may be a more realistic figure. However, some may consider that number is still too high, so let’s reduce it by another third, or 500 unique ROs go through the service drive each month. With those statistics, the business office needs to ask, “What are we offering to these customers?” Typically, if the business office is truly presenting 100% of the F&I products to 100% of the customers, 100% of the time at the point of sale on a new or used vehicle, then around 50% of the customers chose not to initially enroll in one or more products presented to them. However, remember that the customers who initially passed on a VSC during the initial vehicle purchase are still eligible to purchase F&I products after the point of sale. A great opportunity to re-present F&I products to them is while they are in for their regularly scheduled maintenance. Below are several key products that the service drive writer should be presenting to customers on the service drive. Most dealers are able to sell a vehicle service contract (VSC) on an eligible vehicle, as long as it has at least one month or 1,000 miles remaining on the manufacturer’s limited warranty. Additionally, some dealerships have relationships with their VSC providers that allow them to sell on vehicles that are out of warranty with an inspection. As you can see, many customers that come across the service drive will be eligible for a VSC, if not already covered. Therefore, pre- senting a VSC to each customer without coverage will not only benefit the consumer, but also create additional profit opportunities to the service department. Another logical product to offer a service customer is a maintenance program. Given that the customer already plans to service their vehicle at the dealership, a maintenance program is a great option to present to them, as it includes a set of basic services to further protect their investment in their new or pre-owned vehicle. (An added bonus is that this product will keep driving the customer back to the dealership!) This contract also allows the customer to lock in a service rate without inflation, and eliminates paying any deductibles per service visit. Lastly, and probably most important to the customer, a maintenance programwill pro- vide them a hassle-free experience at the service department. Road hazard protection can also be sold to a customer with an eligible vehicle without current coverage, and this protec- tion does not need to be tied to a retail installment or lease contract. An eligible vehicle must not have pre-existing damage and at least 3/32” tread depth left on its tires. Road hazard protection can also provide a great benefit to the customer and additional profit to the service department. Some additional ancillary products that should always be offered to eligible customers on the service drive are: • Dent protection • Windshield protection • Key replacement • Environmental protection Most customers would greatly benefit from having ad- ditional coverage through F&I products. However, most dealerships simply miss this sales opportunity because they do not attempt to re-present products to existing customers that initially passed on the coverage. To successfully utilize this clear-cut opportunity, dealerships need to provide the necessary training and development needed for service drive writers to effectively present F&I products, as well as implement a proper compensation plan. The most successful dealers who sell on the service drive incorporate a simple electronic menu and rating system, so they may use the existing RO number to produce a set price, three-option menu, and that can be produced and explained in one minute or less. This also provides the customer with a simple three-choice close. Furthermore, these dealers offer a 12 – 18 month, interest-free payment option with affordable monthly payments that can be deducted from the customer’s credit card, debit card, or checking account.