Use service departments to build loyalty, profits
Many dealerships leaned on revenue from their service departments to help make ends meet during the recession. Now that we’re moving into a period of hopefully greater stability and sustained growth, it’s important that dealers continue to treat the service department as an integral part of the overall business.
With the use of current technology, employee incentives, efficiency tracking, creative marketing and strategically going above and beyond for customers, the service department could be an untapped gold mine full of potential and, most importantly, the place where first-time customers become life-long enthusiasts for your business.
It doesn’t matter if your facility is a small mom-and-pop or a regional Taj Mahal, ideas of all sizes can have a big impact. Gordy’s Lakefront Marine in Wisconsin started a loaner program that has become an easy way to expose customers to newer, nicer boats. ARI’s Jon Lintvet recommends regular staff meetings to discuss which customers are scheduled to visit in the days ahead, and what their potential needs could be. Or, in the words of Lauren Woodard-Splatt, of Vermont’s Woodard Marine, “How do I make more money without spending any money?”
Changing the mindset
Lintvet, chief marketing officer at ARI Network Services and a lifelong boat owner, feels the service department is often a place where customers can experience frustration. Instead, he said, it should be viewed as a vital place to focus on providing a superior customer experience with spillover benefits for the rest of the business.
“The challenges we all faced in the market have forced and encouraged dealers … to be much more focused on our customers and the experience from end to end,” he said. “Service, which historically in the marine segment has not received as much attention, has given dealers an opportunity to turn what some would argue is the worst part of owning a watercraft into something that can really set a dealership apart and create opportunities to drive new sales of finished units, as well as ancillary products and services.”
As a marketer for ARI, which provides lead generation and management software, as well as ecommerce and online parts catalogs, it’s understandable when he says it’s “all about data and the customer experience.”
Whether using his company’s software or a competitor’s, Lintvet argues simple organization can provide valuable intelligence for each day’s customers. And, especially in the service department, little extras like giving a customer a few DIY tips can go a long way in creating goodwill that is more valuable than any minor lost dollars.
For the data side of the equation, one simple but effective goal should be to collect a handful of basic information, and record it in a dealer management system, about every customer that visits the service center or parts counter — name, phone number, address at a minimum — providing facilities the ability to market to a new customer instead of letting his or her contact information fall through the cracks. That information can be shared in staff meetings, so everybody knows who is coming in and how that customer could be targeted for add-on services or sales.
From his experience working with dealerships across the country, Lintvet also stressed that owners and managers should learn when to hand over smaller tasks to third-parties that can handle the work more efficiently, freeing managers up for more important work, like improving customer service.
“It’s always easy for us, whether it’s in our personal life or professional life to rationalize that we can do something ourselves, versus spend some money to have somebody else do it that specializes in it, because [your time] is never free,” he said.
A sense of urgency
Gordy’s Lakefront Marine, a Boating Industry Top 100 dealership based in Lake Geneva, Wis., was chosen as our 2012 Best Service Department for its focus on efficiency and exceptional customer service, including same-day repairs for minor work, three-to-five-day fixes for more extensive repairs, loaner boats and other freebies like delivery, pick-up and detailing.
Service manager Rallee Chupich pays attention to basic efficiency scores, as well as a list of 23 criteria focusing on how technicians spend their time. With extra duties like equipment oil changes, snow removal and pier installations, their workloads are not always as simple as a single efficiency score. The important thing, Chupich says, is to measure various metrics to create a cultural sense of urgency, a term she’s imported from Gordy’s on-site restaurant.
“The biggest thing is as soon as you start measuring [efficiency], it seems like the whole department becomes more efficient,” she said.
As a business that started by exclusively providing service and only added sales in 1998, Gordy’s prides itself on customer service that focuses on maximizing fun time on the water and learning individual customers’ expectations.
Some customers love extras like free boat wipe-downs, for example, while others have the attitude that they would rather handle small DIY matters themselves.
“Some people … expect their boats to be perfect, like they just drove it out of the showroom. Other people are like, ‘my kids will clean the boat, don’t worry about it,’” she said. “That’s where you just get to know your clients, get to know what their needs and wants are and just try to customize it.”
Aside from working with its Cobalt 20 Group and trying to be “lifelong learners,” Gordy’s is increasing its use of IT services to make its service operation more efficient and productive, and recently equipped all of its techs with laptops so they can add information to work orders directly, lessening unnecessary administrative busywork.
“As you can get more IT-based [with] everything tied together, scheduling with the innovations that are out there electronically, it makes everything easier, so our focus is trying to be more efficient without putting any extra burden on any one individual and [having] quicker communication,” Chupich said.
Adding a personal touch
Near the shores of Lake Champlain, in Hydeville, Vt., Woodard Marine is a small-town Top 100 dealership that has implemented innovative ideas to increase profits and customer loyalty.
Creative plus-ones include the use of QR tags to send explanatory service videos to customers’ smartphones where the technicians explain the work that’s being done to their boat. Part of its ingenuity is that the videos can be created during the winter season when technicians have more free time. By uploading the videos to YouTube, general manager Woodard-Splatt can monitor how many people are actually taking advantage of the service.
Flat rate pricing has been another bonus, taking away the fear of unexpected charges for service customers, as well as increasing profits for the dealership. Its pricing structure has paved the way for another customer service program where an annual $5,000 budget is used to provide free minor repairs to certain customers, something as simple as adjusting the idle for a customer that has already committed to major service work. Any money left in the kitty at the end of the year is used as an employee bonus.
“I would say this is probably our best idea,” said Woodard-Splatt. “To me it’s a lot of money — I would love $5,000 in my pocket — but in the long run, the amount of volume that we’re doing, it’s one percent of our total income of the year that we’re giving away and we feel that it’s helped grow the business in the service end way more than $5,000.”
Being in a small town, the discretionary goodwill account has also improved word of mouth in the community, where people are either impressed with the no-charge service work or, just as importantly, not disappointed when an additional service charge is added to an already expensive bill.
Woodard Marine also tests every boat it services on the water, which has improved overall satisfaction by ensuring a boat’s performance in real-world conditions, as well as discovering other items that can be brought to the customer’s attention.
“It doesn’t mean we’re going to fix them right away, but at least we can give the customer a checklist of this, this and this, which should be addressed in the near future,” Woodard-Splatt said. “Safety-wise, we’re picking up on a lot more stuff on the actual lake.”
Another successful revenue producing program is a result of Woodard-Splatt’s hands-on approach, touching and taking notes on every boat that passes through the service department. After calculating a given boat’s Kelley Blue Book value, the service department sends every customer — from service, sales, storage and dockage — a coupon that looks like a check, offering the customer an actual price for their boat.
With all of its programs, Woodard Marine estimates it now achieves an 80-percent success rate converting service customers into new units with them instead of a competing dealership.
“When somebody comes in, we give them a whole bunch of paperwork and pamphets … we give them business cards of our rental fleet if somebody we know may want to rent a boat,” Woodard-Splatt said. “They’re really looking at the whole picture, not just service, service, service.”