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February 2nd, 2010 | 3 Comments | |
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DealerTrack often receives questions and comments on our blog about DMS functions. Moments ago we received the following question/comment and we would like to open it up to the DealerTrack community to answer. Please post your comments and/or questions here. Thanks
“Need the ability to close an RO to more than one Service Internal Pay Type.
You must close the entire expense to one GL account.”
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January 25th, 2010 | No Comments | |
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1) Price Competitively
Understand your market; know what your competitors are charging for similar services. Simple research techniques that are easy to put in place – look at competitors’ ads on a weekly basis; do some mystery shopping once a month to get an idea of what types of services and promotions they offer.
2) Maintenance Bundles
Use oil changes and basic maintenance services as “loss leaders” to bring customers in and increase your service department efficiency. Utilize maintenance bundles – don’t just rely on manufacturer recommendations, but provide your customers with dealer-recommended options as well.
3) Shop Supplies and Taxes
Depending on what state you operate in, you may be able to pass along certain fees to the customer. When appropriate, be sure to include shop supplies charges, hazardous waste fees, miscellaneous fees and all applicable taxes. These items often are overlooked and can eat away at your profit.
4) Variable Labor Rates
Simpler repairs and maintenance services must be priced in line with your competition. More advanced repairs such as engine, transmission and electrical work can be priced differently. Most “Quick Lube” establishments will not be able to complete these types of repairs as they require a different level of expertise or specialized equipment that often is only available at franchised dealerships. Also, evaluate the makes and models of cars you are servicing. For instance, repairs on a Chevy Malibu are less intricate than those on a Corvette. Set you service pricing accordingly for models that require more highly skilled technicians.
5) Grid Pricing
Use grid / matrix pricing and be sure to test escalation rates. Verify that all cent amounts will be “.88” or “.99” – with exception of the 1.0 hour rate. These additional cents really add up. Try to avoid using too many grids as they become cumbersome to manage.
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January 12th, 2010 | 1 Comment | |
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DealerTrack recently launched their new Service Price Guide (SPG) product. If you’re not familiar with SPGs, they are used to give service quotes and increase your service department efficiency. The quotes are based on a database created from time studies. Price Guides are available for nearly every manufacturer, enabling you to give a labor service quote regardless which franchise you work with. SPGs can increase your gross profits and effective labor rate.
SPG can also help drive sales of aftermarket products. When working a deal and trying to up-sell an extended service contract, you can pull a quote for a water pump to show estimates of what the cost of those repairs would be with labor, parts, shop supplies and tax. SPGs can help used car departments more effectively value trade ins. When test driving the a potential trade, the Used Car Manager can look up the quote to estimate how much to take off the trade to cover repair costs. They also increase service profitability by increasing the number of labor hours sold per RO. In addition, they help to produce higher effective labor rates and can help to increase the number of customer pay RO’s written per month per service writer. SPGs increase customer satisfaction by providing a fast, consistent, and accurate estimates every time.
Service Price Guide Quotes can be created from the Repair Order list screen or from the Repair Order Function within a Repair Order.
After the SPG Quote has been created, it displays on this screen.
The following fields display on this screen:
The following Options are available from this screen:
The following Functions are available from this screen:
There is a subscription charge to access the Service Price Guides data. Please contact the DealerTrack DMS Inside Sales Team at 800-429-3375 if you are interested in using this feature in your dealership.
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January 11th, 2010 | 1 Comment | |
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Have you ever wondered how much profit is left on the table from declined repairs? I recently ran across an article in Ward’s Dealer Business by James Clausen that shares some great insight on this subject. If you’re not tracking the declined repairs in your Dealer Management System, you’ll never know how much money is being left on the table. Here are a few key excerpts from the article.
“The easiest method to track declined repairs is to create a unique labor operation code on the Dealer Management System.
The service advisors should use the decline repair op code for every repair that’s declined. The advisor can write appropriate comments about the declined repair that are important for follow up, as well as for vehicle repair history and customer information.
Once a unique code is assigned, simply run a labor-operation report for the designated declined repair-op code. The information from the report can be transferred to an excel spreadsheet for easier sorting and handling for customer follow up.”
Now that you know how much money is being left on the table, it’s time to formulate a plan on how to capture that additional revenue. With over 25 years of fixed operations management experience, James Clausen has some excellent advice on creating a follow up action plan.
“There are a few different reasons that customers decline repairs. As part of the action plan, there should be a solution to address the reasons. For example:
- The customer can get the repairs done cheaper at an independent shop
Price matching the independent might be a consideration. Let the customer know the advantages of dealership repairs.
- The customer can’t afford the repairs
Find out what the customer can afford and if there’s enough profit to help the customer. A deferred payment or a no-interest credit card may be options.
- They don’t feel that the repairs are a necessity
Some repairs aren’t, but if needed repairs are a drivability or safety concern, explain to the customer why the vehicle should be repaired.
- The repair costs are more than the vehicle’s worth
This is a perfect opportunity for a vehicle sale.
- The customer can’t be without the vehicle while it’s being repaired
Offer a loaner.
Phoning is the best method for following up. A letter and email are impersonal and can’t answer questions that the customer may have. A manager or other designated person can call.
But the service advisor who initially wrote up the customer is probably the best choice because:
- The advisor has already established a relationship with the customer.
- The advisor is familiar with the customer’s concerns and necessary repairs.
- If the advisor is compensated based on performance, and has a financial incentive to get the customer back in for the repairs.
Empower whoever contacts the customer. If service advisors make the contacts, they need to be able to offer a discount or beat a competitor’s price.
There may be situations where a manager is a better choice to follow up. The service advisor should make that choice and discuss it with the service manager.”
To read the complete article visit http://wardsdealer.com/ar/auto_follow_declined_repairs/. As always, please feel free to leave your feedback. Tell us about what works or what doesn’t work for you in your fixed operations.
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January 4th, 2010 | No Comments | |
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1) Know Your Competition
Know who your competitors are and what they have to offer. Competition for servicing vehicles is vast – ranging from other dealerships to oil and quick lube shops, tire dealers, independent garages and the “do-it-yourselfers”. See what services they are offering and make sure you offer the same.
2) Competitive Pricing
Understand your market and do some quick research to determine what your competitors are charging for similar services. Use oil changes and basic maintenance services as “loss leaders” to bring customers in. Utilize maintenance bundles – don’t just rely on manufacturer recommendations, but provide your customers with dealer-recommended options as well.
3) Training
Provide your advisors with training, both product and sales training. After all, their job is to sell service. Make sure they act as a consultant and explain to customers what needs to be done to the vehicle in a way that is easy for them to understand.
4) Up-sell Additional Services
Once you have the customer in the drive, this is the perfect opportunity to up-sell additional services. Be sure to do a thorough walk-around of the vehicle. Check for potential body work if you have a body shop, check tires for wear and tear, windshield wipers, etc. It may sound trivial, but these sales can add up.
5) Market Aggressively
Utilize your current customer base. Direct mail with special offers is a great place to start. But don’t stop there – buy lists and use your local newspaper to run ads. Send service reminders (direct mail, phone call or both) to customers that have appointments. Send thank you letters 2 – 3 days after service has been completed. Utilize point of sale marketing to drive additional, “impulse” buys such as windshield wiper blades or even accessories.
