Many of the dealers who have managed to stay in business over the past couple of years have had to reduce their staffs and cut back on expenses, including marketing. As a result, those dealers are faced with a difficult situation: How do you squeeze more efficiency and improved ROI from smaller advertising and promotional budgets? More importantly, how can those dollars drive traffic to your sales and F&I offices?
One answer is to focus more attention on fixed operations, including the service department. My company and our dealer clients have had great success with service clinics. They’re a cost-effective way to drive past, current and prospective customers to your dealership and generate goodwill in the community.
As with any other marketing campaign, making a service clinic profitable depends on proper planning and promotion. Let’s take a look at how successful service clinics are engineered, then discuss how to take advantage of the sales and financing opportunities they create.
Kicking off the event
My company has developed a seven-step process for executing turn-key service clinics from start to finish:
1. Design the clinic and invitation and set date(s)
2. Develop guest list and acquire and purify data
3. Plan for guest arrival
4. Order materials and supplies and send invitations
5. Set appointments
6. Confirm appointments and conduct clinic
7. Track and measure responses and complete scheduled work
The first step is to invite your customers to come in for a no-cost vehicle diagnostic inspection. The timing is important — 3 to 6 p.m. on Tuesday, Wednesday or Thursday or 8 a.m. to 2 p.m. on Saturday are popular choices — and attendees should receive their invitations three days to a week prior to the event. They should be encouraged to register ahead of time, either by phone or online. You can enhance the invitations with premium gift offers for those who respond and have inspections performed.
Consider getting a sponsor on board. Over the past year, my company has partnered with a major national lubricant supplier and three OEMs to help their dealer customers conduct service clinics. Every clinic sponsored has drawn response rates ranging from two to six percent of those invited — a stronger response rate than direct mail for many of those stores.
Breaking down the numbers
Last year, Joe Trujillo, general manager and part owner of Johnson City (Tenn.) Honda, worked with our company to put on his dealership’s first service clinic — a three-day event! We invited 4,600 customers, which resulted in 122 inspections performed, five vehicles sold, and more than $48,000 in additional parts and service revenue.
“I never would have believed that we would run out of appointment times for customers responding to this clinic,” Trujillo says. “We extended the clinic to include appointments on the following Saturday. It was huge bonus that we also sold five vehicles. We are making regular service clinics part of our annual marketing plan.”
Johnson City Honda is not our only success story. At a recent, OEM-sponsored clinic in Cleveland, 10,000 customers were invited. Of those, 255 had their vehicles inspected the day of the event and another 198 came in over the next three weeks. The results were impressive: more than $68,000 in additional service and parts revenue generated and seven vehicles sold. Another clinic in the New York City area generated a similar result: 110 responses from 3,000 invitations, more than $40,000 in additional service and parts revenue, and five vehicles sold.
Completing the cycle through F&I
Service clinics can make a positive impact on a dealership well beyond the day on which they’re held, and that includes the finance office. We have helped dealers incorporate a process that turns one-time service customers into repeat buyers, and we’ve seen it generate between five and 15 extra vehicle sales every month.
Here’s how it works: The service manager or service adviser fills out next-day appointment cards on site and hands them off to the sales manager. The sales manager then pulls each customer’s information pertaining to the following:
• Current payment and interest rate
• Original term and number of payments left
• Original amount financed and down payment
• Type of vehicle (including trim level, engine size, etc.)
For customers who are in a positive or at least manageable equity position, the sales manager can use the information he or she has collected to calculate an estimated payoff and build a proposal based on the customer’s current deal.
The sales manager or another team member then can spend the next day working the service lane, catching those special customers and explaining that the store happens to be in the market for their trade-in. “We’ve taken the liberty of working up some numbers. Why not take a look while your vehicle is being worked on?”
For customers who miss their appointments, the same pitch can be made in a follow-up letter. Don’t forget to mention the importance of regular maintenance and, of course, the numbers you crunched. Also include extended warranty information for vehicles that are near or past their original factory warranty. Many dealerships also offer additional incentives to customers who, upon arrival, agree to test drive a new vehicle. However, I would not suggest you include that information on the invitation.
In these tough times, effective marketing can sometimes make all the difference. Service clinics can be a great way to drive significant traffic to your dealership, and every department can benefit.