Upselling Necessary Repairs? Wards' Innaugural "Service 150"
Ward's Dealer Business lists the 150 top-performing franchised dealer service departments in America, including their income vs. total dealer revenue. The report also offers a fascinating behind-the-scenes look at the biz of selling repairs. According to the article, franchised dealers' service department revenues tumbled by nearly $5b last year; improving vehicle quality is leading to less warranty work. With razor-thin new car margins, that's gotta hurt. To staunch the wound, dealers are getting more aggressive about selling repair work. "Part of the problem is that service advisors are too busy answering the phone setting up appointments rather than walking the customer around the vehicle in the service lane upselling necessary repairs." Remember that the next time you get shunted onto the service department's voice mail.
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Mikey, I would wager that if the work had been authorized and the rock had been found without major disassembly they would have told the guy and charged a couple of hours, but the bottom line is that the wrench didn't want to mess with it.
Actually, you can make money on warranty work, or at least you could when I wrote warranties on CAT diesel engine repair, circa 1979-'80. It required that the technicians just cranked on and generally fell into the "R&R" mode: remove and replace. My hunch is the same thing goes on with cars. My experience writing for an auto service trade publication for the past 9 years has led me to believe that the key to success is seen as upselling as much as possible. And there's a couple of ways of looking at this. First, they're trying to help you prevent a breakdown. Second, they're trying to line their pockets. Both are true, to a degree. It's akin to how my dentist approaches my dental work, telling me "Well, you can put that off for a bit" or "I'd start saving and plan on doing this as soon as possible." It was different when more people worked on their own cars, or at least had a passing knowledge of what went on underneath the hood and underneath the wheel wells and the rest of the undercar. A service technician I know told me how "no one works on their car anymore" talking in large part about his clientele, college professors and other professionals with late model Volvos. "And, the people who ask us about what went wrong or needs to be done are the women," he added, "since they feel they're going to get ripped off. The guys just ask how much, mull it over and whip out their credit card." So when you go into the service departments of new car dealerships, try to do a bit of homework before you get that phone call, the one where they're trying to sell you on something you have a nagging feeling could be put off. Don't be afraid to ask, "Does this need to be done right away?" or "how soon do I 'need' to do this?" Also, learn the names and whatever you can about the people working on your car. If they like you, they are much less likely to jack you around. My experience when I wrote warranties, and from what I have seen at the shop where I take my Swedish hooptie, is that if you are not liked you are much more likely to loose the service wars.
Funny, but many people liken going in for car repairs to going to the dentists. You don't want to be there, you don't want to spend the money and you have better uses for the cash. Almost any other purchase you make has positive connotations, you WANT to buy. Car repairs and dentistry are negative sells at best. Even dentists upsell. How many times do you need a teeth cleaning in one year?
I'm wondering how Dave Smith Motors in Kellogg, ID (#68) got on the list. The others on the list are all in densely populated metro areas.