A man who knows his slogans, longtime independent dealer Joe McCloskey oversees the service departments at Big Joe Auto and McCloskey Motors Inc. via some sound and harmonious advice borrowed from Stephen Stills.“We have a saying in our store: ‘Love the one you’re with,’ ” said McCloskey, quoting the folk rocker’s biggest hit. “And the other mantra we have is: ‘Fix it right the first time.’
“If we can embrace that one customer – win him over and retain him and not be so worried about trying to get in all of the masses – and if we fix his vehicle right the first time and at a fair price, then more than likely he’s going to come back.”
That service department philosophy has successfully guided McCloskey and wife Ann since the founding of their business in Colorado Springs, Colo., 29 years ago.
“To better enhance customer service,” Joe McCloskey said, “there’s really no magic or technology that supersedes the fundamental basics of performing at the highest level when engaging with a customer, whether it be in person or on the phone or online.”
Fast-forward to the summer of 2018. What defines “super service” in the age of ever-evolving technology?
“Each dealership is unique,” said Justin Osburn, NIADA Retail 20 Group moderator and instructor for the retooled Certified Master Dealer program. “But dealers today have to be aware, they have to be assertive, they have to know that service drives across the country are getting more competitive using technology.
“So Step 1 is the independent dealer has to say, ‘Wait a minute, business is not as usual.’ Independent dealers need to differentiate themselves if they’re going to compete.” To do that, he said, they must provide good vehicle service, they have to get their name out there and it has to be done in a way that allows them to attract – and retain – customers.Osburn’s ideas align with extensive market research conducted by Jim Roche, senior vice president of marketing and managed services for Cox Automotive service department platform Xtime, while compiling his new book Fast Lane: How to Accelerate Service Loyalty and Unlock its Profit-Making Potential.
Roche contends it’s not enough for dealers to “try hard and do it with a smile.”
“What’s changed is as consumers, we are accustomed to – we’re surrounded by – technology-enhanced experiences,” Roche said during an Auto Remarketing podcast interview.
Roche’s research found there are 264 million gasoline-powered cars on the road today, and in the next 10 years manufacturers probably will sell another 100 million.
“Let’s fix the 264 million that are on the road today,” he said. “Our market research, which we did last year, showed 64.4 percent of dealers, when asked, said customer retention is their primary concern.”
“Let me just be clear about that. They didn’t say it’s ‘a concern’ or ‘one of my concerns,’ they said it’s their primary concern. Yet 85 percent don’t have the technology or tools in place to enable a superior ownership experience.”
Roche said the major takeaway from his book is there’s a huge opportunity for profitable growth in the service lanes, noting that the average gross margin for service is 47 percent while less than a third of all vehicle service happens at dealerships.
“Dealers know that to maintain a healthy operation, customer retention has to be the foundation,” Roche said. “And what drives retention is the experience.“That’s what I think we’ve seen – that realization that, hey, the average time someone keeps a vehicle nowadays is more than 11 years. And during those 11 years, you can see that customer 20 or 30 times in the service department. So that's really where retention begins."Actually, retention typically begins
with the consumer’s smartphone. Two-way texting, online bill paying and online scheduling have emerged as basic services for consumers.
“I’m picking up my mobile phone and from it I can book a ticket to China,” Roche said. “I can book a restaurant reservation tonight. I can order a Domino’s pizza, I can order an Uber, I can buy jeans. I can do anything I want to do using this device, which gives me a technology-enhanced experience.
“Now, I can get that experience for a $10 pizza but I can’t get it for a $40,000 car?”
Roche said the ability to provide that kind of technology-enhanced experience can be a huge differentiator.
He cited the J.D. Power 2017 U.S. Customer Service Index Study, which found 67 percent of the respondents said they would “definitely” return for service to a facility that texts them status updates on their vehicle while it is being worked on.
“Then they asked, how many of you get text updates? Three percent,” Roche said. “I mean, come on! So we’ve got to get on texting. Everyone is doing it and dealers need to follow suit.”
Whether by text or by telephone, that sort of proactive communication can be a huge factor in building customer satisfaction and loyalty.
Osburn recalled a dealership in the Pacific Northwest that differentiated its service department by having an employee call customers every three or four hours during business hours to update them on their car service.“Here they’re solving a problem,” he said. “The problem is when your car is sitting in the service department getting diagnosed, you call every 30 minutes trying to figure out when your car is going to be done and how much money it’s going to cost. That's what customers do. They're trying to figure out if they have to extend their rental car, and they need to budget for whatever is going to happen.“Or if they’ve already approved the work and the service department is fixing the problem, they want to know when it’s going to be done.”
The dealership saw that problem and made it a priority, dedicating the resources to make the phone calls to solve the problem. “The response was huge,” Osburn said. “So here’s something that doesn’t cost that much – just a little time. But the dealer down the road is not doing that. This place is doing it to differentiate itself. It’s doing it to provide a better customer service experience. And by doing that, they’re likely to gain customers.”
Communication isn’t the only potential differentiator.
J.D. Power’s 2018 study showed a number of extras dealers can provide that resonate with service customers, including the ability to schedule service appointments online, promotions and coupons, and pickup/drop-off, which has a big impact on loyalty – 68 percent of the survey’s respondents said they will definitely return to a dealership that will pick up a vehicle from a home or office and deliver it after the work is completed.
Some dealers close the transaction by washing every customer’s car as a thank you.
At P.M. Standley Motorcars in Carrollton, Texas,customers dealing with a service center appointment lasting more than two hours can choose from a fleet of loaner vehicles free of charge.
The dealership, run by Jason Standley, touts on its website, “When we say service loaner fleet, we aren’t just referencing a few boring models with nothing real to offer you when out and about. Our extensive fleet lineup has 24 active cars in service, allowing you to select a vehicle that has suitable technology, capability and comfort to match your experience.”
The dealership also offers loaners for service taking less than two hours for a fee.
While those perks are a perfect fit for the upscale clientele in the Dallas- Fort Worth market, Nick Markosian, owner and president of Markosian Auto, views service through the lens of his Buy Here-Pay Here dealerships in Taylorsville and Ogden, Utah.
For instance, the idea of picking up and dropping off service department customers is a non-starter.
“I’m not willing to hire another $3,000-a-month employee to have that service, and I just don’t think it would be enough of a competitive advantage to justify that,” said Markosian, the energetic star of a series of videos on his dealership’s website.
Markosian launched his business in 2000 with the slogan “Been Jerked Around?” To him, the way to provide superior customer service in the service department is simple: Do the job right.
“People don’t like getting their cars fixed because it always ends up costing more than what they were told, it’s never finished on time and they have to contact the dealer to find out what’s going on with their car,” he explained. “So it really gets down to the basics. Did you do what you said you were going to do? Are you able to do what you say you are going to do?
“If you tell a customer the car will be done by the end of the day and he comes to pick it up and the car is up on the rack and it’s half-apart, you lose. You’re done! He will never, ever come back to you.”
To prevent that, Markosian focuses on the basics.
“They are so forgotten in the age of technology and this app and that app and that software thing you can sign up for $300 a month or whatever,” he said. “So, are we easy to do business with? When we make a quote do we stick with that quote? Do we jerk people around?
“There are just stupid, horrible things that a lot of service shops do to people. Are we that shop?”
Markosian said his dealerships average servicing about 20 cars a day.
“I consider service probably our most important department,” he said, “because if they don’t fix those cars in a timely manner and within a certain budget we’re dead in the water on the sales side.
“And the thing about service revenue, it’s instantaneous. You get that money right then, right
there. There are no accounts receivable. You don’t have to get a loan for 10 grand and have that $10,000 sitting on your lot hoping somebody will get you off that $10,000. It’s just a really good way to improve your cash flow if you have the infrastructure and the ability to do it.”
McCloskey said the service experience at his dealerships in Colorado Springs begins with recognizing customers on a first-name basis and being familiar with their vehicle’s history. The idea is to put the customer at ease.
“We don’t use the word ‘help’ because ‘help’ implies the customer is in a state of need ... and it’s a negative connotation,” said McCloskey, a two-time Colorado IADA Quality Dealer of the Year and NIADA’s 2013 National Quality Dealer. “It’s listening to the customer. It’s real important to go out to the vehicle. As we’re doing the multi-point walk-around our service writer is following, we have the customer get involved, too.
“And when the customers come back inside we ask what’s the best way to communicate with them – in person, text, phone, email? So many customers like to be contacted by text, so when we’re dialoguing with customers we’ll take mini- videos and text with them with updates.”
McCloskey said he tries to manage his customers’ time and expectations about the time it takes to make a repair.
“Everybody would like to get everything done right away,” he said. “So we use a rule that’s called 10-10-and-10. The first 10 minutes is writing up the vehicle, listening to the customer’s wants and needs. If it’s something like an oil change, we first do a safety inspection on the vehicle and get the inspection to the service writer so he can quickly be producing an estimate for repair – brakes, tires, belts, those types of things. And the last 10 minutes we do the actual oil change.”
In addition to his dealerships, McCloskey owns two independent repair shops – McCloskey All-Make Service and Joe’s Car and Truck Repair – that handle about 12,300 all- inclusive orders per year, including detail, internal and customer pay.
The repair shops feature 31 bays (22 mechanical and nine appearance/detail) employing 12 technicians and nine detailer/apprentice techs.
McCloskey employs a business development representative, whose job is to remind customers of their upcoming scheduled services.
“It’s much like a dentist calling and saying, ‘Joe, it’s time to come in and get your teeth cleaned,’ ” he said. “She does basically the same thing” only with oil changes and other routine maintenance.
“As a BDR, she sits over 250 service appointments ... and does a really good job,” McCloskey said. “I don’t want to give you her name because I don’t want anybody to call and recruit her.”
McCloskey ends his service appointments by leaving a card on the front seat of each car thanking customers for their business and asking them to write a review on Google if they were happy with the experience. “If they’re not happy,” McCloskey said, “we have a phone number and a person’s name as well as an email address where customers can call and voice their opinion to somebody outside of the service department. They may have a problem with the service manager or the service writer or whomever, so we have it go to somebody outside of the service department who will actually pick up the phone and respond to them immediately.
“We pride ourselves on immediate response and immediate resolution to the customer’s complaint.”