WINNIPEG — There’s a truism about automobile dealerships and ongoing success: The sales department sells the first car, and the service department brings them back for the next one. Crown Auto Group’s “acquisition department” puts a new spin on that philosophy, with the upsell of all upsells.
Nick Guffei, general manager of Crown Nissan, said that when customers’ cars are in for service, the dealership offers to appraise the vehicle with an eye toward buying it.
The dealership uses the process to sell the customer a new vehicle, or to buy cars to bolster its used inventory.
“We typically will see 10 to 15 per cent of our service clients agree to an appraisal, and then we usually turn 20 per cent of those into deals,” Guffei said.
“So, if we see 750 cars in a month, that’s 75 to 100 appraisals and 10 to 20 extra sales.”
NO GUESSING ON VEHICLE HISTORY
Guffei said the approach is discreet; he doesn’t want service customers feeling they’ve been shaken down. But because the service department typically has the vehicle’s entire service history on file, there’s both less risk to buying the car and a greater ability to sell it.
“It’s always better when a car comes with a story,” Guffei said. “We can tell buyers it was a local car, always serviced here, and it increases their comfort level, too.”
If the customer is interested, Crown Nissan will assign a sales representative who will offer test drives while the customer’s car is being serviced.
“If I’m stocking my used lot from an auction, I’m paying a premium to the auction house,” Guffei said. “I’d rather give that premium to one of my customers, which I can do because I know the car’s history.”
Guffei said the acquisition department approach is in play at the group’s Toyota, Acura, Honda and Mazda dealerships.
“We plan to add this approach to our body shops as well. For some people, even minor damage is enough they don’t want that car any longer.”
Crown Nissan is nearing the end of extensive renovations, part of Nissan’s NREDI 2.0 program. It’s the first Nissan store in Winnipeg to convert. The dealership added 20,000 square feet (1,900 square metres), two drive-in service entrances and six service bays.
NEW TOOLS IN SERVICE
As competition for service ramps up, dealerships are trying various ways to ensure their fixed-ops departments are as profitable as possible.
Glen Daman, president of Applewood Auto Group in British Columbia, said one recent trend is a move away from desktop computers at the service writer’s pod to portable tablets that come to the customer.
The tablets allow for easy confirmation of vehicle identification numbers and customers’ personal details. Soon, Daman said, the tablets will offer graphic or video information to help the customer understand the needed repairs.
Daman said competition is stiff enough, particularly in the densely populated lower mainland of British Columbia, that more dealerships offer to pick up and drop off cars for service.
“Used to be, that was only the luxury brands, and now you’re seeing it with brands like Kia.”
Daman said it is hard to tell if this increased level of service increases revenues. He said the nature of the industry means dealers must offer more just to stay competitive.