We are well into 2021, and car sales continue to cool off despite the summer heat. As vehicle sales flatten, optimizing dealership service department best practices will play a critical part in maximizing dealership revenue.
The service department brings in a large sum of money to your dealership, often accounting for a majority of the profit. Yet, it’s very likely that your service department’s staffing and resources are already stretched to the limit, capping the number of service leads and appointments your dealership can generate. To preserve dealership revenue in 2021, digital technology will drive your service department’s success—with live chat taking the lead.
The Service Department Goes Digital
Fortunately, refocusing your digital strategy to include the service department isn’t difficult. You can boost staff performance and generate significantly more money using tools you probably already use for sales. In fact, search engine optimization, pay-per-click advertising, video, live chat, and online content are all digital goldmines for fixed operations.
(For essential digital marketing tips geared toward dealership parts and service departments, check out our free eBook, The Repair Order for Your Dealership’s Fixed Ops Strategy.)
The end goal is to drive more online traffic to your service bays this summer. And no other digital tool engages and converts your service customers like live chat. With the ActivEngage managed chat solution, your dealership’s service department can effortlessly:
- Increase repair order revenue by engaging customers across multiple devices
- Maximize the productivity of your service staff by freeing them up to focus on repairs
- Reduce phone wait time for customers by providing a convenient alternative online
- Improve the service lane experience and get higher satisfaction scores
- Have enhanced customer and repair information sent straight into your messages
But we don’t just generate high-quality leads for your service department. We drive online service shoppers to your service bays by setting service appointments.
ActivEngage Fills More Service Bays
While you may think having an online service scheduling feature is enough to maximize service profits, ActivEngage CEO Todd Smith has valuable data that proves live chat is the key.
Turn up the heat in your service department this summer using ActivEngage’s in-chat service scheduling. With our managed service scheduling feature, you could increase your service appointment show rate by a whopping 15% and make more money on repair orders. Currently, ActivEngage customers are using our service scheduling feature that averages an extra $60 per RO.
When it comes to live chat, you’ll want to trust a chat vendor who can walk the walk and talk the talk; make sure you choose a live chat solution that generates results and enhances the shopping experience for your customers. We take all of your shoppers seriously and aim to build lasting relationships on your behalf. The ActivEngage philosophy is rooted in customer experience, and we take a holistic view of all aspects of your dealership operations—your service department not least of all.
Don’t settle for less when you can have it all. After all, your customers won’t.
Dealership Service Department Best Practices
You already know that our ActivEngage managed chat solution can provide your fixed operations service department with some real benefits. These benefits include increasing revenue, maximizing productivity, and improving the service experience.
However, it’s essential to take a wide-angle approach. That means shining a bright light into the areas where most service departments could use some improvement. Some of the most common issues include miscommunication, a lack of customer-centric services, and outdated processes that are inconvenient and time-consuming.
By focusing on those critical areas, you can streamline daily service department operations with the end goal of gaining more sales and increasing profits. It’s about maximizing every available opportunity to turn regular people into enthusiastic fans and loyal customers that will return again and again. Building a positive service history with loyal customers will be your service department’s bread and butter, especially during the summer slump.
Here are the top five ways that you can implement better practices within your dealership’s service department.
The Top 5 Ways to Implement Service Department Best Practices
Unfortunately, there’s no magic “one size fits all” method for implementing dealership service department best practices. But, there are many different ways to improve efficiency and revenue within the service department. To accomplish this, it’s all about offering a customer-centric experience that’s fast and convenient.
1. Embrace Technology to Improve Customer Experience
Technology is the most critical area in which service departments need to improve. The events of 2020 gave the world a significant shove further into the digital age, forcing a mad rush for companies to keep up with technology and consumer demand for 24/7 access and contact-free everything.
Of course, no dealership was exempt from this ongoing demand for advanced, customer-centric technology and services. Most of the businesses that stayed afloat during the most challenging economic times in a decade did so by implementing automated processes, live chat, and other technologically innovative solutions.
Upgrade to ActivEngage Managed Chat Solutions
When you finally upgrade to our ActivEngage DataWise™ analytics with Managed Chat and Customer Engagement Solutions, you’re going to notice a vast improvement in your service department’s performance.
Digital.com rated us Top Live Chat Provider for 2020—and there’s a good reason for that accolade. We performed a pilot study that looked at 500 dealerships that were actively using our DataWise Analytics. As a result, 20-45% saw additional new car sales in just the first month!
That’s not the only way that ActivEngage can increase profits. For example, using our managed service scheduling feature can improve the overall show rate for service appointments by 15% and get an extra $60 per repair order. It’s easy to see how those numbers can add up to big profits over time.
ActivEngage is the perfect starting point for a technology upgrade. It allows for effortless interaction with customers across multiple platforms and devices. This convenience and ease of access improves their service lane experience and earn you more cash in the process. With our live chat, every customer can avoid lengthy phone wait times and schedule service appointments at their convenience, right from their smartphone or tablet.
Offer Online Bookings
Answer this: Does your dealership offer online service appointment scheduling? If not, you’re missing out on a broad demographic of Millennials and Gen Z’ers who are more inclined to use online or in-app services. Even with the simple addition of online booking, you can reach a more extensive customer base, ultimately increasing revenue.
Some other ideas for greater customer convenience using technology include:
- Online bill pay and itemized invoicing
- Customer data management software
- Online or in-app appointment check-ins
- In-lane bill pay on a mobile device
- Text or email service reminders
- Video/pictures of diagnostics or estimates
- Online review/approval of service estimates
- Social media promotions and sales
- Online or in-app loaner vehicle and ride-share scheduling
Use ActivEngage’s Proven Methods
Our exclusive ActivEngage software also allows you to collect and analyze critical data to help improve customer experience. This advanced software can help improve a customer’s service experience, which is why we’re one of the most widely used brands in the automotive dealership industry. Between our live chat and other upgrades, your service department will hum non-stop.
Tap Into the Social Media Gold Mine
Social media is another area that can be a virtual gold mine in the right hands. Your dealership should have a designated social media manager or another employee with the expertise to update every page regularly. With the right skills, you can leverage social media for bigger profits and other benefits, too.
For example, your social media service manager should regularly post engaging and relevant content to encourage customer interaction, like posting promotions, coupons, and sales. Advertising promotions across multiple platforms allows you to reach a broader audience that now has a powerful incentive to visit and spend money at your dealership.
A social media manager should also interact with every customer who leaves a comment, whether good or bad. And that brings us to our next priority: responding to negative comments, reviews, or complaints.
It might be tempting to ignore negative comments, but doing so can cause significant harm to customer perception and company reputation. In addition, follow online reviews (Yelp, Google, Facebook, etc.) and respond appropriately and professionally to any negative comments. Ignoring customer complaints fosters miscommunication and harms your dealership’s reputation, which can mean a ton of lost money in sales.
2. Improve Communication
Miscommunication within departments (like the service area and sales) is a problem for many dealerships. This includes communicating with both customers and other in-house departments, specifically the sales department.
Collaborate with the Sales Department
The service and sales departments are essentially sisters. That’s why seamless cooperation and collaboration between the two departments is critical, particularly when it comes to sales prospects.
You can assess whether your dealership has a communication problem by scrutinizing the relationship between sales and service. For instance, how many service sales and repair orders originate from leads generated in the sales department? If that number is small, it’s time to foster better communication between the two departments.
One way to improve communication skills is hiring a service-to-sales manager to engage leads from the sales department. If there’s no cooperation between the two departments, sales prospects end up falling through the cracks, which equals lost revenue.
Excellent communication skills are essential for every part of working in the service department. One example would be staying in touch with marketing vendors to ensure that you’re always getting the highest quality parts, competitive prices, and quick delivery.
Have your service advisors check whether every marketing vendor the dealership uses is up to the task—and eliminate the ones that overcharge or don’t provide quick delivery. After all, your customers don’t want to wait weeks for parts to come in. They want fast and efficient repair services at an affordable price.
Answer Phones Right Away
Some of the most frequent customer complaints about the service experience include long phone wait times, endless transfers, no answer at all, or not receiving a phone call back. These issues should be a top priority because they will negatively affect your bottom line if left unaddressed.
The number one way to fix those problems? If you hear a phone ring, answer it. It sounds simple, but it can make a big difference in customer service and satisfaction. Unfortunately, far too many service advisors will ignore a ringing phone because they think it’s not part of their job description or that somebody else will answer it. However, ignoring phone calls will inevitably lead to unsatisfied customers.
Communicate with No-shows
You could ask any of the thousands of service advisors in America, and every single one will tell you the frustration of no-show appointments. No-shows may be aggravating, but they’re a fact of life in the automotive dealership industry, whether your dealership specializes in selling pre-owned older vehicles or brand-new luxury cars.
Most no-shows have forgotten they were scheduled for service, which is why a follow-up phone call will often result in a new appointment. Remember, every customer that slips through the cracks represents lost revenue and missed sales opportunities. Try to offer no-shows next-day or same-day appointments for their convenience.
Streamline Your Check-in Process
Whether it’s via an app or the company website, there should be a convenient way for customers to check in on their mobile devices. Digital check-ins should also include a verification process to confirm contact information, allowing for a much faster and smoother experience for the customer.
It also prevents your service advisor or other frontline employees from wasting time with tedious data entry, leaving them free to devote their efforts to more critical tasks.
3. Earn Your Customers’ Trust and Respect
Another way to implement dealership service department best practices is by earning the trust and respect of your customers. That means being consistent and providing a high-quality customer experience every single time, particularly regarding billing and invoicing.
Implement Good Billing Practices
The billing department is a vital part of winning over a customer’s trust and respect. Therefore, there should be no surprises with the billing formula for service visits, including the labor rate. Keep your customers coming back by offering high-quality work, short wait times, and a labor rate that straddles the fine line of being affordable yet profitable.
For instance, every customer should receive an accurate price estimate (including labor rate) so there are no shocked or disbelieving looks when it’s time for them to pull out their wallet. Take the time to go over an itemized estimate so they know exactly what to expect.
Even if the final number is a dollar more than the original quote, get their written approval and signature. Then, you’ll have a signed legal document concerning the finished repair and how much labor and parts will cost. Having signed documents from every customer also helps protect the service department from any unexpected claims, litigation, or problems that cost money and time to fix.
4. Streamline Daily Operations for Maximum Efficiency and Sales Opportunities
Another area ripe for improvement is the service department’s day-to-day operations. You can streamline daily operations for better efficiency by focusing on good housekeeping practices and going the extra mile for every customer, including offering in-person vehicle inspections.
Perform an In-person MPI for Every Customer
Every service appointment should feature a multi-point inspection (MPI) performed by the service advisor. While this might be tempting to skip, it’s a huge part of learning to implement dealership service department best practices.
During the MPI process, ask your customer basic questions about their driving habits and discuss how those habits can affect their vehicle’s performance. Remember, 90% of John Q. Public knows nothing about cars or how a service department runs—make sure you speak in simple language that the average person can understand. Try to avoid using overly technical terms or industry jargon.
Take the time to physically walk the customer through the inspection and show them the maintenance service they need and why they need it. They’re more likely to approve the repair order if they can see for themselves what the problem is.
A comprehensive vehicle inspection makes the customer feel confident that your department is skilled and knowledgeable. They feel happy they’re patronizing a business with experienced professionals and, therefore, feel they’re getting the best value for their money.
Good housekeeping is another area where some service departments can use improvement. There should be a service advisor at the front desk at all times, so there’s always somebody there to interact with customers and address their concerns or questions promptly.
5. Emphasize Speed and Convenience for Customers
According to Cox Automotive’s 2018 Dealership and Service study, two out of the top five frustrations for customers at a dealership were concerning longer-than-average wait times during their service visits.
In fact, the study showed that long wait times were more of a frustration than the refusal of a loaner vehicle or overly high pricing. It’s a great example that shows just how important speed and convenience are to people. Having wait times that are too long is a huge liability that will negatively impact your bottom line.
Implementing speed and convenience requires examining the service department to ensure that it’s exceeding customer expectations and doing an overall great job. However, keeping up those values will bring in more customers in the long run, so make these values a priority if you want to thrive and succeed.
Reduce Service Delays on Routine Maintenance Jobs
A crucial part of improving your department’s speed and convenience is decreasing service delays, particularly for routine services like an oil change.
Look at it like this: A waiting customer is an unhappy customer. Long wait times mean they’re unlikely to schedule appointments for follow-up services. Many service advisors combat this by offering employee overtime or scheduling weekend service hours to ensure they have the staff to run at full capacity.
The following is an easy way to judge whether your dealership has a problem with poor performance. First, look at the average wait times for routine maintenance work. Then, ask yourself whether you would wait the same amount of time for an oil change, tire rotation, etc. If the answer is no, then this area needs immediate improvement.
Ensure Follow-up Service Appointments
Every customer should receive a card with the mileage or date of their next service. A popular method uses a transparent sticker that stays in the top corner of the customer’s windshield.
Or, hand out business cards with the pertinent information and then use text or email reminders a few days before their next appointment. Either way, make sure they know when they need to come back for more service. Have your dealership’s service advisor adopt this practice so that every single customer who comes into your service lane gets a follow-up appointment.
Make It Easy to Do Business
So what’s the key takeaway here? Make every customer feel like it’s easy to do business with you. After all, they don’t visit dealerships because they want to have a long, frustrating experience—they want to get in and out as quickly as possible while still receiving high-quality service and workmanship.
Try to exceed the customer’s expectations with every aspect of their service visit so that they will want to return for their next oil change or brake job instead of heading to the “Quik Lube” down the street.
Final Thoughts on Dealership Service Department Best Practices
It’s undeniable: The customer is the most critical part of running a dealership service department. When it comes to staying afloat in these tough economic times, reevaluating and improving the service department is an excellent way to increase revenue.
Implementing customer-centric business practices and embracing technology is a great place to start. For example, using our managed live chat solution, ActivEngage allows for quick and convenient communication with customers across multiple platforms and devices to improve satisfaction and overall experience.
Again, an emphasis on speed and convenience is the highest priority. However, using all of these dealership service department best practices can help streamline operations to improve customer experience and increase revenue and profits. After all, that’s the whole point.