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Today's inventory shortage, tomorrow's fixed ops struggle

May 19, 2022
3
4
1
First Name
Bill
The challenges posed by the inventory shortage are so pervasive that it’s already becoming difficult to remember a time when we weren’t all talking about it. And while those challenges aren't going to magically disappear any time soon, I think we also need to start preparing for some predictable issues down the road for fixed operations.

The rise of EVs means that vehicle service is likely to change more dramatically than at any other time in the last century. As technology continues to improve on the manufacturing side, vehicles are being brought to your service lane less and less often. But you already know this; what else is on the horizon?

Here's what we know:

1. Dealerships are selling more used cars

2. People are delaying vehicle purchases

3. Dealerships are selling more off-brand vehicles

Combined, those three factors create a perfect storm. The sales challenges your dealership faces today could very quickly become long-lasting service challenges, if they haven’t already. Thankfully, dealerships are not powerless victims of circumstance.

Here's what can be done:

1. Incentivize service retention through an unparalleled customer experience, loyalty programs, renewable benefits (roadside assistance, road hazard tire protection, etc.), and an impeccable sales-to-service handoff.

2. Increase focus on tires — many vehicle owners still don't think of dealerships when they think of tires, yet rotations are becoming the most frequently needed maintenance item.

3. Map the customer journey, identify any and all defection points, and proactively fill in the 'potholes.'

4. Include prepaid maintenance with purchases — remember: the goal right now is secure loyalty.

5. Promote CPO vehicles — the key here is ensuring that customers fully understand their warranty coverage and the value of servicing their vehicle at your dealership.

Let's take action now and put an end to the surprises.
 

Shawn Zents

Lot Lizard
Aug 12, 2019
20
18
8
First Name
Shawn
Thanks for sharing, Bill. Any tips on the issue many dealers are facing in their service departments: hiring techs to handle the demand they already have?
@Alex Snyder - the pic is a few years old, but I share this with dealers every chance I get!

In all seriousness, every dealer I've encountered tackles this subject in different ways.
  1. Continually review / improve your current processes - become more efficient to handle demand.
  2. Sales-to-Service hand-off: educate customers on the industry shortage, and, like Bill mentioned, WOW them with the facility / people (customer experience). Spot-on suggestion!
  3. If you're not already, partner with local schools providing Auto Tech training / degrees. See these dealership comments. Deacon Jones, near me, partners with Wayne Community College. WCC offers programs specific to Nissan/INFINITI, Mopar brands and now Ford.
Curious: Who is using a pick-up/drop-off valet service and what is that experience like? What's the success of Hailer (CDK / Lyft integration)? Are customers increasingly willing to pay for valet service? My perception is that these may help ease tension / improve CSI due to a technician shortage. :thinker:
 

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May 19, 2022
3
4
1
First Name
Bill
@Shawn Zents couldn't agree more - start with efficiency (audit for non-billable tasks, eliminate what you can or delegate away from techs toward a BDC, and shore up your scheduling so your techs don't get slammed in mornings and bored in afternoons, etc.).

And partnering with local schools is often overlooked but it's a must. It's hard to invest time and energy into creating a mentorship/career track program right now, but if you can gamify the employee experience by putting techs on a clear path to "unlock" new levels of their career with you, that may go a long way in keeping existing talent and attracting fresh talent.

Regarding your last point: Just before COVID we surveyed some 2,000 dealership service customers and pickup and delivery cracked the top 3 most desirable service department amenities. I'm definitely curious to see how that trend fared.

Can't speak to Hailer but I think dealerships that do offer valet service shouldn't be shy about it - like you said, it's a customer experience piece that can not only attract customers but also ease tension at the same time. Get loud about it and make sure it's front and center for prospective customers to see.
 
  • Like
Reactions: Shawn Zents
May 19, 2022
3
4
1
First Name
Bill
The challenges posed by the inventory shortage are so pervasive that it’s already becoming difficult to remember a time when we weren’t all talking about it. And while those challenges aren't going to magically disappear any time soon, I think we also need to start preparing for some predictable issues down the road for fixed operations.

The rise of EVs means that vehicle service is likely to change more dramatically than at any other time in the last century. As technology continues to improve on the manufacturing side, vehicles are being brought to your service lane less and less often. But you already know this; what else is on the horizon?

Here's what we know:

1. Dealerships are selling more used cars

2. People are delaying vehicle purchases

3. Dealerships are selling more off-brand vehicles

Combined, those three factors create a perfect storm. The sales challenges your dealership faces today could very quickly become long-lasting service challenges, if they haven’t already. Thankfully, dealerships are not powerless victims of circumstance.

Here's what can be done:

1. Incentivize service retention through an unparalleled customer experience, loyalty programs, renewable benefits (roadside assistance, road hazard tire protection, etc.), and an impeccable sales-to-service handoff.

2. Increase focus on tires — many vehicle owners still don't think of dealerships when they think of tires, yet rotations are becoming the most frequently needed maintenance item.

3. Map the customer journey, identify any and all defection points, and proactively fill in the 'potholes.'

4. Include prepaid maintenance with purchases — remember: the goal right now is secure loyalty.

5. Promote CPO vehicles — the key here is ensuring that customers fully understand their warranty coverage and the value of servicing their vehicle at your dealership.

Let's take action now and put an end to the surprises.
If anyone is looking for more specifics on #3: https://go.drivesure.com/key-customer-defection-points

Unplanned repairs and tires in particular will siphon customers away if you don't have a proactive approach for them.
 

Shawn Zents

Lot Lizard
Aug 12, 2019
20
18
8
First Name
Shawn
@Alex Snyder - the pic is a few years old, but I share this with dealers every chance I get!

In all seriousness, every dealer I've encountered tackles this subject in different ways.
  1. Continually review / improve your current processes - become more efficient to handle demand.
  2. Sales-to-Service hand-off: educate customers on the industry shortage, and, like Bill mentioned, WOW them with the facility / people (customer experience). Spot-on suggestion!
  3. If you're not already, partner with local schools providing Auto Tech training / degrees. See these dealership comments. Deacon Jones, near me, partners with Wayne Community College. WCC offers programs specific to Nissan/INFINITI, Mopar brands and now Ford.
Curious: Who is using a pick-up/drop-off valet service and what is that experience like? What's the success of Hailer (CDK / Lyft integration)? Are customers increasingly willing to pay for valet service? My perception is that these may help ease tension / improve CSI due to a technician shortage. :thinker:
Love that sticker :rofl:
@Alex Snyder - Recently read this and wanted to share. (Maybe move to a new thread so this original post doesn't get hijacked?)

Beth Lucchesi is a talent acquisition specialist with Carter Myers Automotive. She shares ideas that are working.

 
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Reactions: Alex Snyder