Tune up the service department for big profit potential, says Dave Koshollek

Posted By: admin
Post Date: 02/15/2013

DEALER EXPO, Indianapolis, Ind. — Identifying the threats and opportunities your service department can face is the first step toward turning the area in a powerhouse contributor to the dealership’s overall success, explained Dealernews columnists Dave Koshollek during his service workshop session Friday morning.

But, before you can start counting the green, it’s imperative to identify and tackle each challenge, and figure out the best steps for tapping into the profit potential of the service department. All of this and more was hashed out by Koshollek and the more than 200 years of service experience of the crowd assembled for the morning session.

So what threats are dealers and stores facing today? How about the liability of customers not wanting to pay for safety-related repairs, the profit drain of warrant work and recalls or customers claiming previous damage be fixed by the dealership.

The biggies, the room of store owners and employees decided, are the dearth of qualified technicians, general in-store communications, competition from other stores, Internet competition, cusotmers who won’t pick up bikes after service is complete, or DIYers who want free advice, tool loans or to have their mistakes fixed by your techs.

Of those who bring their bikes in for service and then turn your service area or shop into their own personal storage sheds, Matt Williams of Williams Vintage Cycle in Xenia, Ohio, said, “They want stuff done, but they don’t want to come pick it up afterward. Who would do that?”

It’s especially bad this time of the year, he said, with many customers calling up to say they’d like to wait until the weather is better so they can pick up their bike and ride it home.

It was these problems that Koshollek had the group tackled, one table at at time. The idea was to analyze the challenge as to its cost to the dealership and several other factors, discuss how they’re currently dealing with the threat, and then focus on the best solution possible — one that is easy to implement, likely to succeed and have the least negative impact on business.


Althoff said the problem is bad at one of his three dealerships and he figures it’s a service writer issue. He shared his solution with the table, and the group discussed how they’d integrate it into their own store’s practices.

For one, it’s imperative for a store to have a storage fee policy in place. The service writer should communicate this policy with the customer when the service appointment is made, when the vehicle is dropped off, and after the work is completed. The policy should be clearly communicated via signs in the service area, included on the work order and in person during each interaction.

The service writer should make daily rounds to check what bikes are being stored, and make daily calls to customers whose bikes are in storage to remind them. It’s also important, Althoff stressed, to keep records of any communication made with a customer whether it’s verbal or written.

When it comes to profit opportunities for service, Koshollek said there are a myriad ideas, however, many are overlooked by dealers. This is to their own peril as these are chances to improve parts to labor income, increase their parts to labor ratio, and better their customer loyalty and CSI scores.

One such opportunity is up-selling and cross-selling. The latter can be as simple as suggesting to a service customer a backrest for his wife or luggage for the first big touring ride of the spring.

Later in the year, Koshollek added, is a great time to offer heated grips as a way to beat the cold. Want to really drive the point home? Have the grips in an operational display that riders can warm their mitts on after a cold ride into the shop.

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