Customer retention is the backbone of dealership profitability, but how do service departments ensure repeat and referral business? According to Tully Williams, fixed operations director at The Niello Company, it all starts with culture, trust, and consistent customer engagement. In today’s episode of Inside Automotive, he shares the strategies his team employs to drive service loyalty and maximize efficiency.
Williams emphasizes that dealerships are in the “repeat and referral business,” and success hinges on service advisors, technicians, and staff embracing a customer-centric approach. His team aims to maintain at least a 70% customer retention rate, ensuring customers return for future service needs. Rather than focusing solely on gross profit, Williams believes in selling only the repairs and maintenance recommendations that staff would offer their own family members. This philosophy, he argues, builds long-term trust and drives higher approval rates on service recommendations—currently at 62% across their stores.
A key component of this approach is a structured, transparent service process. Every vehicle undergoes a standardized inspection, accompanied by a technician-created video detailing the vehicle’s condition. These videos, which took time to integrate into the workflow, now serve as a cornerstone for customer trust. Williams notes that their stores send inspection reports to 99% of customers, with an overall video-sharing compliance rate in the high 80s, aiming for 95%.
On the operational side, his team prioritizes human interaction over AI-driven customer outreach. While Williams acknowledges AI’s benefits for backend tasks like quality control on videos, he firmly believes that customers prefer personal engagement. Their business development center (BDC) plays a crucial role in maintaining customer relationships, making follow-up calls with a 40% answer rate, and successfully scheduling 40–50% of those calls into service appointments.
He also highlights the importance of selling high-retention services such as maintenance, tires, and batteries, even at a financial loss. For instance, their BMW store achieved a 71% replacement rate on red-coded tires—ensuring customers return rather than seeking service elsewhere.
Regarding EV service, Williams acknowledges that initial warranty work has been profitable due to early manufacturing defects, though improvements are reducing these issues. While EV adoption continues to grow, hybrids remain a strong seller for at The Niello Company, particularly Volvo hybrids, which provide an optimal balance of electric and internal combustion power.
“We sell recommendations we would sell our family members. That is the key. When people believe that you actually believe that, they're like, ‘Wow, this is a great place to work.’ And guess what? We sell 62% of everything I ask for in the service drive. Why? Because we're honest.” – Tully Williams
