Fresh off a week inside the NADA Dealer Academy, Don Hall, president of the Virginia Automobile Dealers Association, called out a major contradiction in the business: Service is the profit engine — but it’s still treated like the back room.
“This is an area that has great, even today, growth potential… and dealers go ‘well, but I'm making x amount of dollars, so I don't think about it,’” Hall told Daily Dealer Live hosts Sam D'Arc and Uli de’ Martino.
But there’s an easy fix. It isn’t a new tool or a new process — it’s a mindset shift dealers have avoided for decades.
The problem: “Unfortunately, the mentality is… the people on the back end, we're the front end that gives away cars… and by the way, it's the service department that has the ability to make huge profits and, more importantly, retain customers for life,” he said.
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Nearly 50 years later, that attitude still runs most dealerships, but Hall explained that it creates three major failures:
1. The service department is often seen as secondary, even though it tends to fund the majority of dealership expenses.
“The average absorption rate is somewhere between 70–75%. I've got Virginia dealers at over 100%,” Hall said.
2. Many service advisors aren’t asking customers key questions like: “What other cars do you own?”
3. Dealers still assume that independent shops are cheaper, but that is not always the case.
“Life is about growing. Life is about learning. And when you're not willing to grow and learn, it's time to check out. I am not checking out,” he said.
Hall’s prescription: Treat service as the core business.
Hire people who understand long-term relationships
Leverage AI and modern tools to improve warranty and retention
Teach advisors to “ask,” not “assume”
“75% of customers buy tires from the first person to recommend them,” Hall said. “And yet only 8% of tires are sold by franchise stores… We have a golden, great opportunity to sell more tires, to sell more service… not to abuse people… but just take care of their needs.”
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