Ken Hite's Blog (12)

Let's Address The Elephant In The Room...Service Retention

Franchise Dealers have the opportunity to earn hundreds of thousands in financial compensation from their OEM, assuming the dealer's service retention is at specific OEM guides. Unfortunately, a very high percentage of dealers are unable to take advantage of the financial windfall.

Let's put this in perspective. A tier 1 OEM has been offering PPM-Pre Paid Maintenance with every vehicle sold, it's inclusive in the MSRP. The metrics are as follows.

50% of the customers never show…

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Added by Ken Hite on January 24, 2017 at 9:54am — No Comments

Fixed Operations: The Dealers Last Stand or Renewed Opportunity?

It's easy to make a compelling argument that franchise auto dealers are at significant risk of going through a serious downturn, very similar to big box retailers like Macy's, J.C. Penny, Sears and even Nordstrom. Nordstrom is known for its exemplary customer service, liberal return policy and in-store amenities. The company also prides itself on selling apparel that buyers see as unique, fashionable and worth a premium price. Nordstrom's floor traffic is down, causing serious…

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Added by Ken Hite on January 5, 2017 at 4:17pm — 2 Comments

What Do Consumers Think About Service Customer Pick-up & Delivery?

The consumer is the life-blood of any business, and franchise auto dealers must implement consumer centric solutions that will encourage consumers to conduct business with your dealership(s).

As you read a few of the customer quotes below, it's important to note that consumers are conducting business with dealers that are geographically located further away, and dealers that are located closer to the consumer aren't winning their business. Why? Dealers that provide Service Customer…

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Added by Ken Hite on December 28, 2016 at 2:37pm — 1 Comment

Your Service Department's Strategy for 2017 and Going Forward

There are a few critical areas that Fixed Operation Directors need to focus upon to ensure your service departments are prepared for 2017 and beyond.

  1. Consumer Behavior: Understand that consumers view auto repair as time consuming, inconvenient, and intimidating. Having a car repaired is one of the last things in the world that any consumer wants to do. Auto repair has become a need basis driven industry, versus a want and maintain industry. Consumers will put…
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Added by Ken Hite on December 15, 2016 at 11:16am — No Comments

Are Service Departments Failing Consumers and Employees?

We have all read about employee turnover, and the challenges the industry faces with hiring needs. A recent article in Automotive News cited "Two of every five service advisers leave each year. How can dealers keep their best ones from burning out?"

What struck me the most, and should be a red flag for the Dealer and his/her Fixed Operations Director are the reasons cited by advisers for quitting their job and leaving the industry all together. The following list is per the Automotive…

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Added by Ken Hite on December 2, 2016 at 11:40am — 1 Comment

Every Service Department in the Country Faces These Challenges Daily

  1. Lack of Customers in your Service Drive...The Right Customers
  2. Too Many Late Model Recall Units
  3. Declining Dollars per RO
  4. Too Many "Waiters"
  5. Service Retention Rates of 30% or Less
  6. Continued Customer Defection
  7. Too Many In-bound Customer Phone Calls Inquiring about Vehicle Status
  8. Too Few Aged Recall Units (3-7 Years)
  9. Minimal Success with the Sales of Additional Service Recommendations (ASRs)...20-30% is…
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Added by Ken Hite on November 10, 2016 at 2:56pm — No Comments

Have Dealer Discounts Gone Too Far?

Dealer discounting for both service and sales have gone entirely too far. This discussion will focus upon service, and we'll address sales in our next discussion.

OEMs and their franchise dealers placed a heavy emphasis on becoming competitive in the service market place dating back 25 plus years. This effort was designed to stem defection of customers to the independent repair shops, become more price competitive, and drive more traffic back to the franchise dealer. Has this strategy…

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Added by Ken Hite on October 19, 2016 at 1:26pm — No Comments

Automotive Service Customer Testimonials Speak Volumes

Is your dealership convenient for consumers to conduct business with? Industry wide, the answer is a resounding "no". Service customers wouldn't defect at a rate of 70% plus if your dealership made the consumer experience convenient.

Listed below are numerous customer comments (unedited) from franchise dealers that provide Customer Pick-up & Delivery for service customers (CP/Warranty/Recalls). The highlighted quotes demonstrate how Pick-up & Delivery Service can have a…

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Added by Ken Hite on September 2, 2016 at 8:58am — No Comments

Highline Dealers; How Do You Deliver The Best Service Experience?

According to J.D. Power's 2016 CSI study, the key areas that dealers need to pay specific attention to are...

  • Wait Time: Consumers are willing to wait 1-2 hours for service. Unfortunately, the majority of customer visits are well past 1-2 hours. I also have to believe that customer defection wouldn't be at 70% if customers didn't have to wait and be inconvenienced.
  • Service with a Smile: Service satisfaction improves considerably when…
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Added by Ken Hite on August 25, 2016 at 2:45pm — No Comments

Why Service Customers Don't Return?

The majority of service departments are busy today, I've even heard "I don't need any more business", and that comment is concerning. Service departments are busy with recall work, but not necessarily customer pay work.

Most vehicles visiting dealerships today are late model, under warranty, and have minimal opportunities for customer pay work. They also provide little upside for new car sales opportunities. General maintenance and service, the industries bread and butter, has…

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Added by Ken Hite on August 17, 2016 at 12:00pm — No Comments

"Here’s a Good Indication of How Much People Hate Car Dealerships"

"If it were possible and practical, most people would never set foot in a car dealership when purchasing a vehicle."

The title of this post, along with the introduction were quotes from a recent article that appeared in Money. The survey and results were conducted by Accenture. Complete article available here.

It's no surprise that consumers aren't excited about…

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Added by Ken Hite on August 4, 2016 at 6:38pm — 4 Comments

Is Express Service Truly Necessary?

It's easy to make a case for "no." Consumers connotate "express service" with an hour or less. Unfortunately, too many consumers experience a 2-3 hour express service, and the end result is customer defection.

There are dealers that are very efficient, and provide consumers with a true express service experience. Unfortunately, those dealers are the exception. Express service is essentially going the way of "complimentary car washes"; soon to be obsolete.

I believe that…

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Added by Ken Hite on July 21, 2016 at 9:21pm — No Comments

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