Developing a servant-like leadership culture and mindset can transform the service department from a necessary evil into a very profitable, necessary evil
BY MICHAEL ROPPO
Smart dealers, leaders and managers know that running and operating a service department like a well-oiled machine isn’t easy, but boy is it rewarding! Customers come and go and today’s automobiles are so complex that some issues can confuse even the best technicians, which can create stretches of downtime, frustration and lost time. It can also lead to debates about who’s going to pay; customer-sensitive issues; how to better price labor and services; how to pay technicians; and how to keep everybody busy and happy – all while generating 60 to 100 percent of the total dealership’s net profits. How are developing your leadership culture?
Far too many dealers run the service profit center of their business at break-even or a loss, maintaining the department as a crucial offering for customers – a necessary evil of sorts. While service may not exceed the revenue earned by selling vehicle units, there are several concepts employed by top dealerships to consistently turn a profit. Some examples of those concepts are:
- Create and sell more value
- Be open more
- Answer the phones properly, timely and in a valuable way
- Build and provide more value to every customer
- Get out of the “can’t-do” business and get into the “can-do” business
- Get into the express service business and provide value
- Improve the hour per repair order
- Improve customer relations
- Increase gross profit retention percentages
- Maximize scheduling
- Create a value-added service organization
- Maximize the selling and effective labor rates being collected
- Choose to stay busy no matter what it takes instead of making excuses
From my training and consulting experience, these are just some of the areas that can be further influenced to generate and retain profitability. However, the more successful and better operating dealership service departments are the ones who employ people with a passion and a real enthusiasm for service, “value-added service” that has combined creative value-added marketing with a professional team of technicians to build a service department that is the core of any successful operating dealership.
Truly outstanding service, even in sales, must be the focal point and source of all our business! It is where the product and the dealership either become even more valuable or devalued as a brand – everything revolves around the service department. For us, the product is only as great as the level of service we provide. If dealers didn’t have the service department, they most likely wouldn’t be in business.
I am a Tech by trade and I like the enjoyment I get from building fast cars and diagnosing engine problems. I have taken a very serious approach to running a dealership’s service department with a high level of performance culture required for generating careers, results and profitability.
Why? It’s very well worth it! As one of my mentors, Grant Cardone, has said, “Success is my duty, obligation and responsibility! Especially in the area for providing premium levels of service!” I am very passionate about defining a sales-to-service-and-back-to-sales customer-retention model that serves the needs of our clients and our industry. The level of service we provide – or don’t – determines the level of wins or losses that are created in our business and industry as a whole.
- The best operating dealerships are service driven even in sales.
- The best operating dealerships follow many modern industry best practices and operational inventories.
- The best operating dealerships have established a few of its own best practices along the way.
- The best operating dealerships are customer-service driven and are providing truly outstanding levels of service to their valued customer base.
These dealerships have a servant-like leadership culture and mindset that provides the personal touches, where every service and customer-facing team member will go over the vehicle at every delivery with them to confirm the value in the repairs and services that were performed.
They explain why they were done, show the old parts and give them a list of recommendations for the next appointment date that is set. It’s all about presentation, and the goal isn’t to just up-sell the customer as much as it is to address any safety or warranty issues and values to build trust that begets future business.
In the long run, more and more successful operating dealerships are realizing the untapped potential and the profitability and income which can be generated and retained from a profit center which many refer to as the back pain or the very necessary and profitable evil department called Serve Us! Get it? Got It? Good!