Yet few dealers are consistently successful with this, and day after day, week after week, and month after month, potential service-drive deals slip through their fingers as the majority of these brand-loyal service customers buy their next vehicle from competitors.
A recent study of over 30,000 retail transactions at several hundred Canadian dealerships confirms the existence of this opportunity gap.
On average, 49 per cent of a dealer’s entire portfolio consists of these service-only customers (who previously purchased from a competitor). Yet the conversion rate of these service customers is so low that in any given month they represent less than eight per cent of a dealer’s total sales volume.
Why is it so difficult to implement an effective sales strategy in the service drive?
Quite simply, it’s because sales teams are focused on hunting for deals in the service drive when they should be focused on serving the customers there.
A common hunting-for-deals strategy is to send sales professionals into the service drive armed with questions such as, “Would you like an appraisal,” “Can I buy your car,” or “Are you still happy with your car? If not, can I show you a new one?”
Stop to think about this strategy: they’re using on service customers the very same approach they do with active shoppers in the showroom but these customers may not yet be thinking of buying a new vehicle.
No wonder it doesn’t work! The sales team is hunting in the service drive and the last thing service customers want is to be hunted. They want to be served.
Unlike the hunting approach, which focuses on today’s deal, the serving approach focuses on creating long term relationships with customers by engaging them in conversation about their vehicle.
Getting customers to talk about their vehicles very often leads to a discussion of their driving needs and can even lead to conversation about new products. And it’s no secret that conversations about new products often result in test drives and purchase proposals—happy day!
A customer-centric approach develops ongoing conversations with each customer. It involves viewing every visit to the service department as an opportunity to engage with and serve customers.
It’s rooted in the belief that customers who are happy with the service they’ve received at a dealership are more likely to purchase from that dealership the next time they’re in the market for a vehicle.
Dealerships that add value to their customers’ ownership experience by actively engaging them in conversation and purposely providing them with excellent service will find customers ready to renew their vehicle purchases in their service drive every day.
The serving approach starkly contrasts the hunting approach. Rooted in the belief that it’s a waste of time to contact customers who aren’t qualified to buy, the hunting approach teaches the sales team to only reach out to a limited group of customers, such as those in equity or at their ideal trade-in mileage.
At Absolute Results, our Appointment Culture best practice trains sales teams in effective strategies to engage with more service customers daily and this leads to more deals every month.
This customer-centric strategy begins with the sales managers’ commitment to spend 15 minutes a day to review tomorrow’s service customers and coach a dedicated sales team or Business Development Centre agent on how to reach out to customers with personalized messages.
Although it will vary depending on whether the customer is a first-time service guest or a repeat sales customer, the message will often sound like this:
“Hello, I’m calling on behalf of ABC Motors. We noticed that you’re coming in for service tomorrow, and we’d like to thank you for giving us the opportunity to take care of you. We would also create a complimentary upgrade offer for you. We don’t want to pressure you at all, but we’d love the chance to talk with you about current market conditions that would make this a good time to upgrade. If you’re interested, a sales team member would be happy to take 10 minutes to review the opportunity with you tomorrow. Just tell the service advisor to let us know when you’re here.”
Recently, some dealers have become even more proactive with their daily service calls by involving both the service and sales department. Their teams’ daily calls to service customers go something like this:
“Hello, I’m the Customer Experience Manager at ABC Motors. I see that you have an appointment for service tomorrow, and I wanted to take a moment to let you know about three new services we’re now offering our VIP customers. We can provide complimentary pickup and delivery to save you time before your appointment, a professional detail service to enhance your vehicle while it’s here, and a no-obligation options review and upgrade quote after your service is complete. Would any of these be of interest to you?”
What are the results of these customer-centric strategies?
Last month, top dealers using our Appointment Culture process were able to generate 14 percent of their monthly sales from service-only customers.
Dealers are also renewing new car customers at 35 months and used car customers at 34 months.
That’s a customer-service approach from the service drive that sells cars today and tomorrow.
Jeff Williams is president & CEO of Absolute Results Production
By Jeff Williams