Too often, service shops miss the service revenues that exist in their shop software
uring these times of economic uncertainty, the greatest challenge for Canadian service shops is convincing people to regularly maintaining their cars. Several recent studies have pointed to a scaling back of people’s spending on automotive maintenance and repair work.
In August, 2011, J.D. Power and Associates published its annual survey of spending on vehicle maintenance and repair, and found a marked decline in spending from the previous year. The authors of the survey found the annual service market for four-to 12 year-old vehicles contracted to $8.4 billion in 2011 from $9 billion in 2010, largely brought on by decreased average annual service spending. This decrease came from both a decline in the average amount spent per service visit and the number of service visits.
The J.D. Power study found the number of service visits also decreased by nine per cent (2.9 visits per vehicle in 2011, on average, vs. 3.2 visits per vehicle in 2010). Annual spending across all vehicle ages declined, with the largest change seen amongst eight- to 12-year-old vehicles. Average annual expenditures among this vehicle group declined to $736 in 2011 from $821 in 2010.
AIA Canada’s “Canadian Automotive Aftermarket Demand Study” published in October 2011, found surprisingly large amount of ‘under serviced’ work on Canadian vehicles, especially on vehicles between the ages of four- to 12-years of age.
For Canadian service providers, the question is how to more effectively communicate with vehicle owners so as to tap into this vast pool of service dollars.
“The challenge is getting the customer back into the service operation on a more than once-a-year basis,” says Bob Worts, director, marketing and sales for Ontario and Western Canada with Gem-Car, a maker of shop management software. “When you talk with some shop owners, they will tell you they need new customers. The reality is what they need to do is to get their existing clients to be coming into the bays three times a year.”
Worts says there are two major stumbling blocks: shops are missing the vast service and revenue opportunities that already exists at their fingertips, and not effectively using their shop software to communicate maintenance and repair information clearly to vehicle owners.
Let’s tackle the first stumbling block. Where most service shops stumble is not leveraging the service and customer information in their shop software.
In some cases, the problem may be in the software itself. The software may not have a clearly laid out screen for quickly gathering customer and vehicle information, or a means to quickly search for important service information.
Good shop software should allow a service writer to not just quickly input all the important customer information — from their name and address to vehicle type and VIN number etc. — but to search along a set of critical business parameters that can generate sales. Those parameters may include finding all vehicles that require service on brakes or suspension components, or to find all vehicles that are slated for such regular vehicle-required maintenance work as oil and filter changes for a particular week or month.
The Gem-Car software allows for such fine-grained drilling down on vehicle and owner information, which then allows a shop’s service writer or manager to create a variety of mailing options so as to book the needed service and to track the responses, says Worts. It also allows for automatic mailings of service reminders for vehicle owners who have pre-booked maintenance and service work.
Karole Lauzier, vice-president of VL Communications, makers of the AD Magique shop software, says their software also allows for such fine-grained analysis of vehicle and customer information and “the garage manager can choose from a vast array of possible communication tools for proper follow-ups. He or she can send personalized letters with eye-catching business letterheads, thank-you cards or invoices/estimate information. An appointment grid enables the shop manager to view and plan jobs weeks or months ahead.
“He can book his jobs in such a way so that he or she is never caught in without solid income flows and the profit graphs can show a shop what are the most profitable jobs.”
To make booking and pre-booking service appointments more likely, many shop software programs are incorporating inspection and diagnostic work sheets that can be printed and given to the vehicle owner. Too often, vehicle owners are confused at to what needs to be done on their vehicle, how various systems work or what is the difference between recommended work and work that has to be done right away.
That confusion often leads to work being postponed and leading to lost revenue. Such sheets have the advantage of better explaining to a vehicle owner what exactly the problems are in their vehicle and the work and parts that are required to fix those problems.
“Using such work sheets will help a service writer communicate in a language and in a way that makes it easier for a customer to know what is happening with their vehicle and to make it easier to book and pre-book the work to be done; what areas are of concern and need to be addressed right away and even more detailed inspection forms for more specific kinds of work on vehicle systems, along with the cost of the work,” says Worts.
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