Twenty years ago, Terry Longmore’s boss was known to punish a salesperson by sending him or her to the service department to fish for sales. Today, he’s the general manager at Beasley Ford Lincoln in York, Pa., and he has just hired two new employees to field the service lane in hopes of a profit boost.
Longmore’s “quality assurance representatives” aren’t being punished, however. Their job is to converse with customers waiting in the service lounge by asking strictly educational-based questions such as, “Do you want to know how much your vehicle is worth?” or “Did you know your extended warranty is close to expiration?”
The staff then uses TEGA Technologies’ Service Turn, a web-based application that mines and organizes customer data, to answer such inquiries for customers on the spot. And with interest rates as low as they are and fuel economy as efficient as it is, Longmore calls it the “perfect storm.”
With a mobile device in tow, these new employees can be heard asking customers, “‘Hey, by the way, I don’t know if you knew this, but we can give you a better rate, we can give you a safer vehicle, a more fuel-efficient vehicle. Does that interest you?’”
“Who’s going to answer ‘No’ to that?” Longmore asks. “That’s kind of a no-brainer.”
A Little Extra
At February’s National Automobile Dealer Association (NADA)’s Convention & Expo, J.D. Power and Associates’ senior vice president, John Humphrey, predicted that 2013 will be the year dealers maximize profits in the service drive.
That announcement is old news to Longmore. Beasley Ford Lincoln’s closing ratio on the service side sits at a modest 3 to 5 percent, but he thinks an extra five to nine sales — at a store that averages about 180 combined new- and used-unit sales per month — are significant, considering the alternative is to not make an effort at all.
Longmore says Beasley Ford Lincoln, which he joined four months ago, isn’t the first place he’s used Service Turn. He also employed the tool while working at one of three Kelly Nissan locations owned by the nine-store, Massachusetts-based Kelly Automotive Group. Longmore says his conversion rate increased so much in his first month with Service Turn that Kelly’s other eight dealerships were inspired to sign on. He adds the system is contagious because it simplifies how salespeople approach data mining.
“[Previously], the computer systems weren’t sophisticated enough to pull up the information that was there already,” Longmore explains. “You had the interest rate, this salesperson, this term, your approximate payoff and approximate value of the car. Now you can pull all that information up together, right there, for the customer.”
A Soft Sell
Beasley Ford Lincoln’s service drive hosts about 40 to 50 people per day, and Longmore’s quality assurance representatives are seizing those opportunities to present each of those customers with that information. They are classified as salaried employees because the position wasn’t designed for “the typical car salesperson,” Longmore explains.
Salespeople at Beasley Ford Lincoln are expected to close about 20 to 25 percent of deals —a number the service liaison will never get close to reaching, Longmore says. “If you take a salesperson off of the floor, they’re going to get depressed very easily. The skill sets are different for this job.”
Bill Hamlin is the founder and CEO of TEGA Technologies, which is based in Irving, Texas. He notes that versions of Longmore’s method are proving successful among his company’s other dealer clients as well. A liaison between service and sales can focus on customer satisfaction and the sharing of information rather than a hard sell, Hamlin says. The representative can either execute the entire transaction or pass off the lead to a salesperson who is more familiar with the product.
“First and foremost, they should ask, ‘Are you satisfied?’ And then, second of all, ‘If you’ve got a few minutes, do you know what your vehicle is worth?’ ‘Do you know if your warranty is expired?’” Hamlin says. “Most people don’t even know it’s expired.
“Most people don’t even know what their interest rate is. Most of them are paying 10 or 12 percent; they don’t recognize that they can re-finance and get 2 or 3 percent interest, sometimes zero percent,” he continues. “In many cases, this leads the customer to think: ‘You know what? I should be looking at a new car. I didn’t realize I could save $38 a month in gas because of the better gas mileage.’ It’s a soft sell, which is, historically, not what our industry has done.”
Putting It Together
Another strategy Longmore employs with waiting service customers is to persuade them to take a new car out for a spin. They’re asked to complete an evaluation for the manufacturer and, in return, they are awarded a $10 discount on their next oil change or repair order.
So, customers at Beasley — armed with the fresh information about sharply lessened interest rates or better gas mileage on newer car models — are translating into sales for the store. Don Reed, CEO of DealerPro Training Solutions and contributor to Auto Dealer Monthly, describes the process as “creative” and adds that it “makes good sense.”
“A closing ratio of 3 to 5 percent is better than zero,” Reed says. “Plus, [the demo] gives the customer something to do while they are waiting. Getting a customer’s feedback on new vehicles is a good tool for the sales team in that it will help them to better qualify a customer’s buying motives, wants and needs, which will also help the OEM.”
Even for the service customers who don’t drive a new car off the lot, getting the service customers more involved could be a step toward delivering better overall customer satisfaction. Better CSI directly correlates with loyalty, according to J.D. Power and Associates’ 2013 U.S. Customer Service Index Study.
According to the findings, loyalty translates highest among vehicle owners with a satisfaction score of 901 or higher for their service experience, leading 96 percent of them to say they “definitely will” return to their dealer’s service department while their vehicle is under warranty; 89 percent said they would return after their warranty expired. That repeat business could equate to about $118 per customer, the average amount spent by a service customer by J.D. Power’s calculations. Meanwhile, premium-vehicle owners average $198 per visit.
Achieving these numbers, Longmore says, doesn’t require much extra effort from the dealer’s perspective. “It’s people who are here anyway,” he says.