Right to Repair Survival Guide

Posted by on March 14, 2012 in Blog, Service Department | 0 comments

Right to Repair Survival Guide

The “Right to Repair” campaign is growing in support daily and this is the time for franchise dealers to prepare.  Independent repair shops have been fighting to get their hands on proprietary software, codes and downloads from the OEM’s that would allow them access to the same information as franchised dealerships, so your client can get their car fixed where they want.  This fight is now going state to state, starting with Massachusetts and Oregon.  Service retention has been an ongoing battle for dealerships for as long as I can remember.  The parts and service departments represent on average around 53% of the gross profit of a store, what type of impact can this bill really make? According to NADA University the average dealer are currently retaining less than 50% of their local service business, so if this bill passes which it looks like it will, the fight will not be for profit, but for survival.

The time to prepare is now, and there are many cost effective ways to begin. This plan takes time to work, because consistant effective marketing gets better over time and your results will continue to grow with your progress. The key that I cannot stress enough, do not miss this opportunity to protect your fixed asset revenue stream. So lets look at three opportunities of the majority of franchised dealers and some recommended solutions.

Creating New Opportunities

Service Department Websites

What is the web presence of your service department? I know you have a very nice dealership website that tells me all about vehicles that are for sale. I know that the service department is on the site with service specials, but how large is their digital foot print or the digital real estate? My entire career was focused on selling cars, getting that client in my door and closing them before they left my store. But the game has changed and the gloves are about to be removed, so we need to look at our new competition.

My search in google was “brake job”.

source: google.com

My results were Firestone, Meineke, tire rack and some others for the pay per clicks (PPC). Google maps had Meineke and a local independent. Then the natural links that come from search engine optimization (SEO) was an article from MSN and a how to article.  Both were followed by two Midas links and a how to replace Saturn brakes on YouTube. My point is that on the entire front page, not one new car franchise service department was listed. This is a serious situation when you the dealer no longer have a captive service client.

 

New Competition:

source: firestonecompleteautocare.com

It is time to digitally separate your sales department from your parts and service department.  You cannot expect to generate generic natural leads to your service department without first getting the real estate that they deserve.  Here is my point your fixed ops brings in around 53% or more of the gross profit of your store and has about 3% of the digital real estate to show for it.

You will see a huge ROI if you spend the money to create new opportunities in your service department, if you create a stand alone service website. You need a site that has a list of services and descriptions for each service available for educating your clients.  A service website will have specials, pricing and a way to schedule an appointment, but will also have educational descriptions of the services you offer and more search-able content for the search engines to really optimize your service department.

 

 

Client Retention

Mobile Dealer Apps

Use media opportunities to get into your clients everyday life.  An effective way to get a your client engaging your service department is to get a dealer app for the iPhone and Android.  This allows you to have the power to send out instant messages via “push notification” to your clients of specials, events or any information you choose to drive traffic.  The app also allows the convenience to your clients to schedule an appointment or even instantly chat with a dealership representative.

Technology like mobile apps allow us to engage our clients to encourage their participation in our relationship.  If all they get are email blasts, the trash folder in their email increases and you take the chance of losing them to a competitor. Use these tools and you will see more client interaction with your store, which will result in them returning to you for more repairs and sales.  That creates a long-term value between both you and your client.

Transparency

This brings us to a very important final step and it ties in with client retention. Transparency has always been difficult for the automotive business.  After all on the vehicle sales side, we are the only business that I know of that you can go online and find the invoice, hold back and even your extra dealer incentives.  No other industry has dealt with transparency like ours, but I am going to challenge you to be more transparent to your clients then ever before.  Lets start with pricing.

Service Pricing

Would  You Advertise a New Vehicle this Way?

   

You need a strategy for every aspect of your parts and service departments.  Most dealers have gone to price in their advertising, why? Price sells cars!!!  Would it not make sense that “Price Sells Service” too??

Free online tools

source: repairpal.com

 

Consider using a pricing tool.

RepairPal Gives you a range estimate for parts and labor. On the top left they add them together to give a quick and easy range estimate of repair.  The pricing takes into consideration both the franchised dealerships and the local independent shops.

On the top right is a Google map feature that shows the preferred shops which are conveniently listed below the map with the name, phone number and address street without the city/state. Then you can click the orange button for a list of repair shops in the area, but the preferred (paid advertising) shops are still prominently listed on top of the list in their own category. Then in the center of the page you will find an educational “Best Practices” and “Common Symptoms” section for the client to become more informed.

They charge a fee if you want to be get in their repairprice guarantee program, however if you just use it as a tool when you client has price objections and bring up the site it does not cost anything. After all your front brake job with turning rotors on a 2008 Dodge Caliber  is $249 which is under the lowest repairpal range of $254-$370. If your client does not see a third party estimate on the internet, how do they know that their certified dealer does the job for less.

This is a great educational tool that was designed to market aggressively priced repair facilities, so use this tool increase the trust of your clients.

 

Service Drive Menu

Also consider a service drive menu. Menus have been successfully used in the F&I departments since the late 90’s. In fact they have been so effective that finance managers won’t go back to the old sales methods, nor would the dealers in regards to compliance. The purpose of the menu is to create a non-confrontational product delivery tool, that gives the client the choice and educates them along the way. There are many menu systems that come with video explanations of certain maintenance/ repair items. Clients do not feel like they are being sold as much as educated, which allows them to lower their defensive posture and buy products. Service Menus are designed to educate your client on factory and dealership recommendations so they can make the best decision on how to maintain their vehicle more effectively. Which as you know saves them money on costly repairs down the road.  The old method of showing your DMS screen or verbally trying to explain  does nothing , but confuse your client.  A service drive menu creates transparency at the dealership, increases your opportunities in the future and drives your profit in to your drive today.

 

If the Right to Repair bill passes in Massachusetts, franchised dealers will see a 5,661 shop increase in competition for late model repair diagnosis and repair orders; if it passes in the entire country the competition for dealers will increase by 247,724 shops for the same business, according to John Dunham and associates.  Captive service will become a thing of the past overnight. Franchised dealers have to start building online content with videos, blogs, pricing, services and create an online footprint so they can have the natural organic leads.  Pay Per Click (PPC) will be an option later when the struggle begins, but what a costly journey that will be.  Retention tools will get your clients back and if you increase transparency you can show your client that they can trust your shop. Your clients will be back every time and many times they will bring a friend. Start the fight for your market share today.

Rodney W. O’Rourke – After 18 years in retail automotive management, Rodney started Velocity Business Partners, LLC., a Dealership Technology Firm that helps dealers increase their efficiencies which increases the profitability of each individual dealership by focusing on creating more opportunities, increased client retention and complete dealership transparency. His company has built relationships with the best of the best in the industry allowing them to exceed the expectation of their clients. They are driven to change the client experience with the most innovative dealership products and services in the industry.