Consider Plumping Up Your Service Menu

Searching for revenue to keep the bottom line healthy, a number of dealerships have added F&I products to their service offerings. A possible influx of longer-term customers at your store can make it worthwhile to consider selling service contracts and related products in the service lane.

TIMING IS EVERYTHING

Dealerships are finding that it easier to sell F&I products at the time of a costly repair, or when the customers' warranties are about to expire, than it is at the sales closings. As a result, more service writers are being trained to talk about the value of service contracts and prepaid maintenance plans and how to close them.

Consider this: If your service area sells three service contracts per week for the next year, that would be more than 150 additional customers a year who would be tied to your dealership for the next, say, four years. And keep in mind that the first 180 days after new- or used-car delivery is generally considered the most critical time for a service area to establish a relationship with customers.

SALES TECHNIQUES THAT WORK

Take Charlie Customer and his recent-model SUV. The service writer, armed with Charlie customer information, asks him if he knows that his warranty will expire in a month. Charlie becomes more interested in purchasing a service contract than he was when he first bought his new vehicle.

Or using a different technique, the service writer asks Charlie to figure out when his 24-month warranty will end. Getting customers to realize on their own what they'll be paying for service can be a powerful tool. This is also a good time to point out that many auto parts aren't repairable today, and then provide some pricing examples for replacement parts. The customer will likely see the wisdom of a service contract.

Or consider Helen, who wasn't interested in a prepaid maintenance plan when she bought her three-year-old SUV from you. But she changed her mind now that she paying for her first front brakes replacement. Prepaid maintenance plans and service contracts are among the best-selling F&I products, along with tire and wheel protection, guaranteed asset protection, insurance, and security products, according to AutoNation, one of the country largest dealership groups.

READINESS IS KEY

The service writer can use the dealership customer relationship management (CRM) software to find out when customers' warranties are up and to send an e-mail notice before the customer next visit. Make sure that your service area has up-to-date brochures on the F&I products you're promoting when the customer comes in for his or her appointment.

A few years ago, when selling these products in the service lane was new, the service writer would get the customer interested in the product and then walk him or her to the F&I department, where an F&I person would close the sale. But these days well-trained service writers usually handle the promotion and sale in the service area, either in the customers' waiting room or by the service writer station. This quickens the process for the time-conscious customer, and, because the sale will be recorded to the service area, heightens service manager motivation.

The service manager should coordinate training, typically by the store F&I manager, a contract provider or another vendor. The service manager also should set sales goals and evaluate individual performance.

GET PROFESSIONAL PROJECTIONS

Adding F&I products to your service lane can boost your dealership profits. Your CPA can crunch the numbers to determine if it likely to be a profitable endeavor for your store.