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Tag Archive: George Gowen

George Gowen

From the 20 Group: The Importance of Value

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We all know that a customer will buy a product or service when the value exceeds price. Unfortunately, automotive dealerships hide the value that the service and parts departments bring.

Here’s how you can change that.

Recognize the value of “free”

Grocery stores commonly show the customer how much they “saved” on every receipt. That builds additional value to the price they paid for groceries. For some reason, dealerships comp services but, unlike the grocery store, never let anyone know about it.

Here’s an example: Almost every dealership I know requires a multi-point inspection (MPI) for each repair order. This check builds trust and helps to sell needed services.

But what is the “value” to the customer for that service? None. However, if you show on the repair order (RO) that the MPI has a $49-$149 value that we provided at “no charge,” it does means something.  After all, the service has actual value, and we should let customers know it.

Here’s another example. Many dealerships charge a diagnostic fee, using the information to explain the nature of the problem and how much the repair will cost. Along with the diagnostic work, you probably do a complete inspection of the entire vehicle and don’t charge for it. You should mention this value to your customer.

Always offer a deal

While we’re looking at other industries for inspiration, let’s consider restaurants. I’ve been to many establishments that promote a special that includes the appetizer, salad, entrée and dessert. You’re told that you’ll get a special value by ordering the components as a group versus ordering them individually. The reality is that people will take advantage of the “deal” even though they likely would not have ordered all the items separately.

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You can apply the same principle to service menu items. The best performers on menu sale penetration show the value of the combined services versus doing those services individually. But if you offer a “30k Service” for $400 without explaining the value of the individual services, all they will see is the $400.

Imagine the penetration level if you showed that all the services in the “30K Service” would separately cost $530! If the menu item is “only $400,” the customer just saved $130 by purchasing it.

The same advice goes if you provide a car wash, loaner cars, or any other services: Always make sure the customer knows the value. And, no matter what, make sure the value you provide exceeds the price.

Tell us below how your dealership creates value in the service department. Learn more about George Gowen and how his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting

Permanent link to this article: http://blog.ncm20.com/2016/10/from-the-20-group-the-importance-of-value/

George Gowen

Who’s your dealership’s MVP? The answer may surprise you.

Auto Mechanic

Take a look at what department affects your business the most. I know— “Nothing happens until a car is sold!”—is the answer heard the most. But what department has the most contact with your customers? Where is the opportunity to create customers for life? And which department displays your culture to your customers most often?

So who is the MVP? I’ll give you a hint: It’s not in sales.

The average salesperson sells 10-15 units a month, while a service advisor sells service to 15 customers EACH DAY! Now consider the relationship of sales dollars to gross profit dollars: Who can create 70% or more gross to sales from an inventory that has no holding costs?

Customer retention happens in the service department

Now, let’s look at the one position in your business that’s most influential in building loyal customers. A salesperson’s ability to retain that customer cannot be discounted, but often, little to no effort is made to improve retention. And there’s certainly little done on a daily basis. The service advisor, however, can make or break your relationship with the customer dozens of times each day.

Create an outstanding service culture

What people within your organization have the most opportunities to create “WOW” moments? Who displays the culture of your store to the most customers daily? Who creates the most “customers for life”? So where should you focus your training, coaching and motivating? That 80/20 rule comes into play here.

Go spend time in the service drive and see who wins your MVP!

What do you think—is customer retention made or broken in the service department? What strategies have you implemented to make the most of this relationship with the customer? 

Permanent link to this article: http://blog.ncm20.com/2015/12/8089/