Planning smart in service department now will pay off later

Another priority is employee retention, which she said helps build and enhance customer relationships.

“I know customers love our service advisers because they’re always bringing them homemade food,” Housley said.

To keep Subaru of Winchester’s six service advisers engaged, two of them work four 10-hour days a week and two more put in conventional eight-hour shifts five days a week. Two express-lane advisers work four 10-hour days a week.

“This creates a good work environment because they’re getting more time with their family and they see we’re invested in them — that it’s not just a one-way street,” Housley said.

Another priority for advisers is constantly reinforcing the services the dealership offers, such as loaner vehicles or picking cars up at a customer’s home for service.

“They need to be reminded that we’re a dealership that goes above and beyond — that we’re the ones who care and this is where they want to be,” Housley said. “We also have to keep talking to customers and ask what’s most important to them.”

Ralph Dykes, service director for Honda, Hyundai and Volkswagen stores in Capitol Heights, Md., part of the 21-store Pohanka Automotive Group, said he is very concerned about the scenario Harkins predicts.

“This is just the start of a tidal wave because those new cars we’re not selling won’t be coming in for warranty or nonwarranty work,” Dykes said. “Two of the big pieces of our revenue pie, warranty work and internal work on used cars, are almost gone, so we have to do our very best with that one piece of pie that’s left — customer-pay work.

“We need to rethink how we provide service — make sure we go above and beyond customers’ expectations,” he added.

Dykes said that one way to do this is a financing program for car repairs the three stores started in January. Discussions with numerous customers had revealed that many were declining repairs not because they didn’t want to do business at the stores, but because they simply couldn’t afford the work, he said.

“A LendingTree survey showed that 28 percent of Americans can’t pay for a $500 car repair without going into debt,” Dykes said. “So we partnered with a financing company called Sunbit.”

Customers can split car-repair bills into three interest-free payments over 90 days, or select longer payment terms. Now, they can afford to pay for repairs with less financial hardship, Dykes said.

In the first 16 days of the program’s implementation, the Hyundai store saw 46 loan applications resulting in 33 repairs that added $28,939 in revenue, for an average ticket of about $877. The average term of the loans was eight months, Dykes said.

“At that pace, you’re getting into a range of more than half a million dollars a year in additional revenue we otherwise might’ve missed,” he said.