As fixed ops leaders with decades of combined experience, Tully Williams, Dave Rogers, and Richard Lupo pointed out that many shops are creating their own issues with customer retention.
During a roundtable discussion, the trio explained that too much friction for the customer is driving business away.
Leading off: Fresh off their appearance at the Kem Krest Supplier Summit in Detroit, three of the top fixed ops leaders joined Daily Dealer Live host Sam D’Arc on Friday to discuss what was covered during the event.
But first, some necessary context:
Williams is the fixed operations director at The Niello Company.
Rogers leads as the fixed operations director at Piazza Management Company.
And Lupo serves as the fixed operations director at Apple Tree Honda and Acura.
Friction leading to lost customers: A decline in repair orders was credited to multiple reasons, but Rogers pointed out that at least half of the problem is because of customer service issues.
He described service advisors, cashiers, and BDC employees often reacting with “no” instead of “yes and right now.”
Additionally, Rogers said those employees should be encouraging customers to bring their car in and telling them they can be helped with a loaner, instead of meeting them with resistance on scheduling.
“There always seems to be a condition of doing business with us that just makes it difficult,” Rogers said. “I think customers get fed up and they go somewhere else.”
Hurting retention: Williams explained that the service lane is a “repeat and referral” business.
He described retention as the “holy grail,” but an area the entire industry is struggling with as retention rates hovered around 30%.
Williams suggested the following solutions: not overworking employees, getting service writers to slow down, and providing customer service when a customer calls.
Lupo explained they use an AI agent to log every call, and AI schedules 30% of appointments.
Fewer vehicles impacting lane: Lupo stated 35% of the falling number of repair orders is due to a decline in the units in operation, with fewer new cars moving.
Dave Rogers added, “Some brands were selling 40% to 50% less cars, and we all know fixed ops service is fueled by newer sales for at least the first couple of years.”
Growing mobile service: To retain customers, Rogers and Lupo called out the success of Ed Roberts at Bozard Ford Lincoln in growing his mobile service, adding that they expect mobile service to become the majority of the work in the next five years.
Lupo shared that they can currently do oil changes, software updates, and other maintenance outside the shop.
“We’re maintaining your car and maintaining that relationship so when that repair does become necessary, the next logical step for the customer is to come into the store,” he explained.
Cost of retention: Williams said they are priced right vs. aftermarket providers for oil changes and tires, but that many customers don’t know.
He said he loses money selling tires, but isn’t worried as his goal is hitting 70% retention.
Similarly, Lupo supports helping customers with their first set of tires to support the dealership’s goals of keeping customers for all the other maintenance services.
“We wash and vac cars, give away hats and keychains… and we no-charge repair orders when things don’t go correctly; why wouldn’t you spend 200 bucks or lose 200 bucks on a set of tires to keep a customer,” Lupo said.
Rogers took a different approach, noting his stores are trying to get to 100% absorption across the board and 30% net to gross in the fixed ops department.
Rogers and Williams agreed that pay plans that reward gross instead of overall repair order hours cause advisors to shy away from selling tires and other lower-gross maintenance work helpful in building retention.
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Approach to oil changes: The panel somewhat disagreed about oil changes and maintenance intervals.
Williams said he believes the factory should dictate those intervals, and dealers should stick to those standards.
Rogers, however, argued that maintenance should be based on driving conditions.
Lupo landed in the middle, recommending customers come in twice per year for the oil change and inspection for $100.
Bottom line: The scoreboard, as Rogers pointed out in the end, is profit and the dealership winning.
“This isn't a Salvation Army. We're not a nonprofit organization. We're here to make money. And that's what the primary focus is,” Rogers said. “How you get there and what angle you attach it to. That's fine.”
Williams added that the service department has one job: “Our job is to retain customers so they buy another one from us.”
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