Fixed Ops Journal - December 2019 - F24

FIXED OPS JOURNAL

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continued from Page 23

By contrast, Lowenbaum added, two-thirds
of newly hired employees are more likely to
stay for three years or more if employers offer
a positive experience during their first days on
the job.
"There are people in the market," Lowenbaum said. "The issue is that those people are
not considering retail automotive, or being a
technician, as the place that they would consider working."

Reed

Harkins

trying to put pressure on them. You're shooting yourself in the foot."

Here come the OTAs

Kane

No deal

Good, better, best

To sell service and parts, offer choices
Tom Kane, parts and service director of Universal Nissan-Hyundai-Genesis in Orlando,
argued that it's better to offer fixed ops customers a choice of products, warranties and
prices and ask which best meet their needs,
than to give them a take-it-or-leave-it offer.
That means service and parts departments
should develop a competitive retail pricing
strategy that takes into account customers' income levels and vehicle ages, he said.
A menu of "good-better-best" offerings can
increase sales, profitability of repair orders
and customer satisfaction and retention rates.
Kane said. It reduces pressure on service advisers to give discounts and encourages customers to approve recommendations for additional work. He cited examples from his
dealerships of choices of alignment and brake
service, as well as factory or aftermarket parts.
"On our service drive, do we just say, 'We
have one offering, one alternator, you want it
or not?' " Kane said. "You are not going to sell
too many of those. We have to realize who we
are talking to, and it's not just one type of customer."

PAGE 24

DECEMBER 2019

Sell on more than price
Dealerships need not - and should not -
engage in excessive price discounting to compete with aftermarket service providers, said
Don Reed, CEO of DealerPro Training. Playing "let's make a deal" with customers to try to
persuade them to buy additional work is a losing game, Reed argued.
"There's no dealer in America who can't
compete with the aftermarket and win," Reed
said. "The aftermarket doesn't do major mechanical repairs. The aftermarket does C-level
technician work. But we have some fixed ops
managers who start discounting their prices
down to ridiculous levels."
Reed cited the example of a dealer client
who offered a $10.95 oil change, which he
called "the dumbest marketing ploy I've ever
seen." The dealership lost thousands of dollars
each month providing 850 oil changes to
"mooches" who did not buy additional service, Reed noted.
"You've got to fix the dealer first before you
fix that process," he said.

Easy does it

Don't "pound" recall customers
A recall provides an appropriate opportunity to recommend other needed repairs and
maintenance to customers, said Lee Harkins,
CEO of M5 Management Services. But a hard
sell in such situations is counterproductive,
he warned.
"In a lot of stores, when that recall client
comes in, everybody thinks it's a golden opportunity to pound the stuffing out of them,"
Harkins said. "It's the worse thing you can do.
All you're doing is reconfirming that you're

Software fixes aren't scary
The over-the-air software updates increasingly provided by automakers to perform repairs and maintenance on connected vehicles
may reduce the need for some physical inspections by dealership
service departments.
But Almog Veig, director of fixed operations for David Lewis
and Associates, reassured dealers and fixed
ops managers that such
updates
need
not
threaten their overall
service business.
Veig
"Technology is coming,
whether you like it or not," Veig said. "This is
not going away. This is something that we
have to learn to adapt to. We offer so many
other services that over-the-air updates are
not going to eliminate our business. They're
actually going to drive us to be better at the
store level."

Battery charging

EVs and service profits
Mark Colosimo, vice president of data and
analytics at the automotive consulting firm Urban Science, acknowledged concerns that the
arrival in large volumes of electric vehicles
with fewer parts and maintenance needs
could reduce dealership service visits and
fixed ops profits. But he described "a pathway
by which we can overcome any loss of service."
Colosimo cited projections that EVs will account for as much as 25 percent of U.S.
new-vehicle sales by 2030. Dealership service
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Fixed Ops Journal - December 2019

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