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The service department is the backbone of the dealership and has a big impact on the experience customers have both with the dealership and with the products you carry. I want to guide you to the next level of success in your service department, starting with how your team can be more professional.
The service department is an important part of the customer experience with the dealership and can help capture customers who have previously purchased through the mass merchants. While both parts and sales are important, no department has more impact on both current and future customers than a service department.
I was blessed with the opportunity to grow up on a farm and to learn how both to safely operate equipment as well as properly maintain it. The days of equipment owners really understanding how a piece of equipment works and having knowledge of safe operation and proper care of that equipment is fading fast.
Many customers today don’t know how to work on equipment. They don’t have any understanding of how it works or why it works and they often don’t maintain it. Because of that, customers need dealerships more than they have ever needed them in the past and I don’t see that changing.
It really comes back to understanding the importance of professionalism and the role it plays in creating a service environment for customers that make them feel safe and secure. They feel safe in knowing they won’t be taken advantage of because they don’t understand everything there is to know about their equipment and are secure in the knowledge that no question they ask is a “dumb question.” I would rather have a customer ask my service department a question they don’t know the answer to than to have the product be misused or not properly cared for.
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That being the case, almost every customer that has a product will need a service department at some point in their future. Your service department employees will potentially touch more customers than just about anyone else in the dealership. This is why it’s so important to make sure that each customer we touch has a positive experience and walks away with a “wow” moment. The “wow” is when the customer is so excited about what you have done that they will tell others they know to do business with you. I am a firm believer that the service department is the backbone of every dealership. Everything that has a mechanical element to it needs to, at a minimum, be serviced on a regular basis to make sure it continues to operate safely. And, based on its use, most equipment will need repair at some point in its life cycle.
Contributing to Success
Not only is service important to our customers, but it can and should be a large contributor to a dealership’s success and profitability. Think about it for a second: In the service department, we decide what we are going to charge per hour, what parts we need to do the job and then we buy the parts from our dealership. It is a huge profit area, if it is managed properly.
If things are going well in the service department, your technicians are turning out quality work in a timely fashion and you are taking care of customers. Your customers will be excited about their interaction with you and they will tell other people about it.
Because the service department is the backbone of our dealership, when it is out of line a lot of other problems pop up in your store. Things happen that begin to make us look like amateurs. Customer satisfaction goes down. The quality of the work starts to drop. The parts department can’t keep up or wrong parts get ordered and chaos ensues.
A high performing, professional service department has the ability to add valuable dollars to the dealership’s bottom line as well as generate more money for the techs and those that support the shop as managers or even the parts people. It all really boils down to the attitude of the dealer regarding the importance of the service department and his or her commitment to make the changes necessary in both personnel and processes to deliver the quality of work that demands higher labor rates.
Every area is different in what it can charge for the work it does, but in all the service departments we have consulted, I failed to find a mass exodus of service customers because the posted labor rate was increased relative to what the local car or truck dealer in the area charges.
One of the benefits of selling the products you carry is their recognized value in the marketplace. Customers purchase those products because they are looking for something that will last and that can continue to be serviced for many years.
Get comfortable charging what a professional service department charges and then make sure to offer something worth what the customer is paying.
Promoting Regular Service
One area that I encourage service departments to focus on is working hard to get the customers to return to the dealership for regular yearly service. Many customers don’t do this because of the perceived cost of doing so and instead choose to change the oil or replace the air filter, for instance, on their own.
We all know there is more to servicing equipment than most customers are aware. We need to work harder to communicate the importance of regular service from an authorized and trained service team — and then make sure we give the customer some options for the level of service. I encourage all the dealerships we work with to have two different pricing levels for service. The first is for a basic service that does what the customer can do at home, plus a few things they either can’t or won’t do. The second option is for a full service. During this service, we go through the equipment with a “fine tooth comb.” We do a voltage test, compression test and lubricate any and every friction point on the equipment. The goal of this service is to bring the equipment back to specifications or as close as possible.
Consider offering all your customers both service options, encouraging them to do the full-service program one year and the basic service the second year, depending upon their equipment’s usage.
Originally published in 2015
6 Steps to Increase Service Department Profits
Don’t underestimate what good processes, flat rating and efficiency incentives can mean for service department revenues.