Service Department

Eating Our Lunch

Take a look at the most current version of your local business directory, and count the number of new mechanical repair shops which have opened up in your community recently.

I’ll bet you can count more than three; some being sole proprietors, while others are national chains.
Ask yourself: “Why”?
More importantly, really think it through. Ask yourself the same question, but in a more reflective manner: “What is going on in my community which justifies an additional repair shop”? It could be your area has seen increased growth, so a larger vehicle population demands an increase in service providers.
If you truly wish to be hard-nosed and critical about it, you could ask yourself the following questions:
“If my shop is not completely stuffed to the gills every day, how could I allow a competitor to open his doors and steal work from me”?
“How did I drop the ball so he could eat my lunch”?
The answer can be (basically) broken down into four categories:
1. Wishful self-limitation: You are a franchised dealer. You specialize in your franchise’s brand. You target market solely to your brand audience, hope they will do business with you, and reach no further. After all, your only competition is other dealer franchises selling your brand…not the
aftermarket; You additionally dislike the complication which comes with setting up and using different vendors, pricing, accounting, and pay plans required to be both competitive and profitable – it’s too much work for such a limited market share;
2. You didn’t see it coming: While development in your area has increased, you are hoping for “converts” to purchase new vehicles from your brand at your place of business;
3. Fear of misdiagnosis: Your techs are brand specialists. They might misdiagnose another manufacturer’s product simply because they don’t know it well;
4. Poor return – on – investment perception: “I won’t do general repairs on other brands that much, so why should I invest in the tools and technology required to capture that market share?
Get this in your head: The world is different now.
• If it has lug nuts and some sort of propulsion system (be it diesel, gas, hybrid, or all-electric) you’d better be able to fix it if you want to keep your doors open.
• Few clients are concurrently product-loyal; ask any client about the other vehicles in their driveway…there’s a high probability they don’t carry the same name badge as the one they brought to you for service today. The other vehicles will still need maintenance and repair. Why can’t your shop do this?
• Your techs all learned the same mechanical principles during their trade school training. They simply need the infrastructure (read: information and occasional tool resources) to effect a proper repair. There is no excuse…a good tech can fix anything.
• Clients open their wallets where they are well-treated. In this economy, clients will spend a thousand dollars today to avoid a three – to – five year car payment;
• You don’t just want your client’s branded vehicle in your shop. You want ALL of their vehicles…and their family’s…and their neighbors.
• The shop that sells tires (meaning, gets the wheels up in the air, off the vehicle, and performs a free safety inspection) wins. All of it. Everything. Sales, gross profit, client loyalty and retention. The whole bag. Don’t want to sell tires? Your client will go somewhere else to get them…along with their brakes, shocks, exhaust work, and oil changes. Let one thing go, and you might as well let it all go.
• It’s time for “empire building” to end between your service and parts departments regarding aftermarket repairs and “who gets what” as far as profit margins are concerned. Adopt weighted-cost average pricing models for aftermarket work, structure your pricing to be competitive in the marketplace, and go after your “unfair share” of the pie.
• It is not a sin to take a little less gross profit in order to capture every possible vehicle in your market area. You must be profitable, but consider your investment in “all makes service” to be just that – an investment in building your store as a brand in the community while capturing and keeping clients away from your competitors.

It’s now three o’clock on Tuesday afternoon, and your service bays are empty…what are you going to do about it?

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