How do they really make money? Confessions of a service manager
What do they really make the most money from? Do they upsell unnecessary stuff? And why do they charge for that screenwash? Wonder no more...
Recently, What Car?’s sister title Pistonheads ran a Q&A with an anonymous car dealer service manager on its ever popular forums. He has recently left the industry.
Both questions and answers inform, educate and entertain, and have plenty of handy tips for consumers owning and maintaining their cars. Most of the questions were answered (‘A’) by the original service manager, but in some cases others chimed in with supplementary answers (‘SA’).
Thanks to everyone taking part; photos are for illustrative purposes only and persons within them are not participants in the feature.
Part one: Questions of cash
Q: You've worked for several different dealers servicing different marques – are standards in the service department different between different manufacturers?
A: The manufacturer standards are broadly similar. Specifics are different but the basics are the same. Different experiences between dealerships are very much down to the staff and management at each individual dealership.
Q: What was your internal service rate to the sales department?
A: Retail rate when I was there was £89 + VAT per hour. Internal rate was £65 per hour.
Q: Do you get commission on selling things which cars don't really need?
A: Service advisors are commissioned on upsell of work. Our guys would NEVER sell work that wasn't necessary - they'd advise anything safety related to be done ASAP ('Red' work on the health check) and highlight anything to the customer that may need doing in the future including costings, but this was only bringing it to their attention, never a push for it to be done.
It all depends on the presentation by the advisor - a good one would present it taking into account the customer's mileage, too. We would often say things like:
"Your front pads have approximately 40% wear remaining-they're fine for now but probably won't make it to the next service in 20k miles. Pop it back in 5k and we'll give them a free recheck for you."
An honest assessment - far better than trying to sell those pads now! However those 40% left pads will make it onto the health check report, which customers will take, if not presented correctly, the dealership trying to sell that work right now, whereas it's trying to help the customer and cover the dealership's arse. Long service intervals don't help-you're trying to predict the future.
Q: What's the obsession with upselling, doesn't anyone realise it only seeks to harm business in the long run?
A: Upselling itself doesn't harm business. What does harm it is unethical upselling of unnecessary work, or poor upselling of things the customer perceives unnecessary without showing them why. They then go away with a poor opinion which quickly spreads.
Q: Have you ever presented a hefty bill to a customer and they've just not been able to pay, purely because they don't have the money?
A: No bill should be unexpected as no work gets done without authority of the customer. Cars don't get released back without payment in full, unless a credit account is agreed – these are usually only businesses or fleet customers.
We did have to block a few cars in to ensure they didn't go walkabout with spare keys - we also had rising bollards and a secure compound for parking stuff overnight which proved useful on more than one occasion.
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