By Charlie Polston, Trainer, BG Products, Inc.
Last year, 85 percent of vehicle maintenance and repair dollars were spent at independent service centers—not at dealerships. Wow!
Over the past four decades, I’ve read hundreds of articles and attended dozens of seminars about the importance of customer retention. (A recent Google search brought up 382 million resources about retention.)
Every dealership I have ever visited talks constantly about customer retention. Sadly, however, when all is said and done, there is far more said than done.
Sy Stewart is a member of my executive leadership team. Stewart has dedicated his career to dealership profitability through customer satisfaction and retention. The following paragraphs are his observations on the problem, and more importantly, the solution.
Where Mistakes are Made
Imagine buying a car and being thrilled with the process—only to feel completely lost when it comes to service. This was my exact scenario a few months ago. My wife and I had our little boy in December, and we decided our family vehicle was no longer “safe” enough. I’m sure many of you can relate. We were on the hunt for our new family vehicle and finally found the perfect one. The buying experience was great! We enjoyed working with our salesman, but we were left feeling like something was missing.
This common scenario highlights a crucial yet often overlooked aspect of the dealership experience: the sales to service handoff. This transition is vital for building long-term customer loyalty and ensuring the dealership is seen not just as a place to buy vehicles but as a comprehensive service provider. Let’s unpack the problem:
Evaluating Your Process: Dealerships should start by asking themselves: what does our sales to service handoff look like? Ideally, the process involves the salesperson personally introducing the customer to the service manager or advisor and scheduling the first service appointment before the customer leaves. However, this practice is not consistently followed across the industry, leading to missed opportunities, missed sales, and customer dissatisfaction.
Lack of Introduction: New customers often don't meet anyone from the service department, leaving them unsure of who to contact for future service needs. This was exactly what happened in my situation. Not once did my salesperson mention the service department.
Poor Communication: Salespeople sometimes give vague directions to the service area or suggest external providers, which can confuse and alienate customers. This was unfortunately the case for one of my colleagues. When the time came to introduce the customer to the service department, they motioned with their head and said “the service department is over there.”
Misleading Assurance: Service managers may downplay the need for future service, undermining the dealership's role in ongoing vehicle care. I know it might seem like this couldn’t be the case but I assure you this happens more often than you would believe.
Several years ago I was in a service department having a meeting with one of my service managers. She couldn’t understand why her customer pay tickets were on a decline. About that time one of their car sales team brought in a new customer to schedule their first oil change. The service manager then proceeded to go on and on about how this brand is the best of the best and they will likely never have to come see her because they made such a great decision in buying this brand. I’m sure you can conclude how we were able to raise the customer pay tickets after that day.
Whether it is lack of introduction, poor communication, or misleading assurance any one of these problems can leave customers feeling neglected and unsure of where to go for service, making them more likely to turn to independent garages for their maintenance needs.
The Cost of a Poor Handoff: A poor handoff ensures that customers view the dealership merely as a place to buy vehicles, not as a full-service provider. This disconnect can lead to lost service sales and reduced customer loyalty. When customers don't feel a strong connection to the service department, they are less likely to return for maintenance, resulting in lost revenue opportunities. A well-executed handoff, on the other hand, can turn first-time buyers into long-term, loyal customers.
Where to Improve
Now let’s focus on some proven action points to improve the handoff process:
Collaborative Training: Sales and service teams should be trained together to understand the importance of the handoff. "A satisfied car buyer will return for service. Exceptional service will lead to a satisfied service customer, and a satisfied service customer will become a loyal repurchaser." This training should emphasize the importance of building a relationship with the customer from the very first interaction. This must be an ongoing process—not a one and done. Keep customer retention at the forefront of all your training.
Structured Introductions: Implement a process where the salesperson introduces the customer to the service advisor and schedules the first service appointment. This should be a standard part of the sales process, ensuring that every customer meets a service department representative before leaving the dealership.
Customer-Centric Communication: Ensure customers leave with all the information they need about their vehicle's maintenance schedule. This includes not just scheduling the first service appointment but providing a clear outline of future maintenance needs and how the service department can help meet them. Today’s vehicles are more complicated than ever. Lets make sure the customer understands what it is that they just purchased.
Customers Feeling Fully Informed: Customers who experience a good handoff feel informed and valued. They appreciate knowing who to contact for future service and having their first appointment scheduled. This completeness fosters trust and satisfaction. When customers feel like they have a personal connection with the service department, they are more likely to return for future maintenance and repairs, building a long-term relationship with the dealership.
Technology Assist
There are several ways to utilize technology to benefit the sales to service handoff. Here are just a few:
Automated Follow-Ups: CRM systems that automatically schedule service appointments and send reminders help keep customers engaged and on track with their maintenance schedules.
Telematics: Vehicles providing real-time performance data to service departments enable proactive maintenance, ensuring that issues are addressed before they become major problems.
Mobile Apps: Allowing customers to schedule service and track history conveniently through a mobile app adds a layer of convenience that can significantly enhance the customer experience.
The Path to Loyalty: Improving the sales to service handoff is essential for fostering customer loyalty and maximizing revenue. By adopting best practices and leveraging technology, dealerships can ensure that customers view them as comprehensive service providers, leading to satisfied customers who return for service and future purchases.
The key is to make the handoff a seamless part of the overall customer experience, ensuring that every interaction builds trust and fosters long-term relationships.
By focusing on these areas, dealerships can transform their sales to service handoff, creating a more cohesive and satisfying experience for their customers. In today's competitive market, this could be the difference between a one-time sale and a lifelong customer.
Charlie Polston is an automotive customer retention and profitability consultant with BG Products, Inc. Charlie has been with BG’s Fixed Operations Division for over 38 years. He has trained over 7,500 dealers, managers, and technicians – and has been a frequent workshop leader at NADA’s annual convention.