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...


Part two: the job

Q: Who are you?

A: I've worked for several manufacturers’ dealers, mostly "mainstream" but one German prestige marque, and spent most of my time in my career in the industry as an advisor before being promoted to service manager - I did this for around three years before I left.

Q: Why do some service managers appear to hide from customers?

A: You do get those who don't like confrontation. I used to tell my front desk guys - and live by this myself - that whatever difficult conversation you're about to have, it'll be 10 times worse if you avoid it and the customer gets to you first. Call them, be on the front foot, they'll be angry if they have to call/chase you so be proactive. It works, too.

It's just a case of being honest, explaining the reasons why something needs doing, and gaining their trust. I'm proud that my dealership was in the top ten dealerships in the country for good customer feedback so I think we as a team did alright!


Q: Was there a culture of the mechanics and service staff doing stuff on the side? Either on their own or on mate's cars in the garage of dealer client's cars off site?

A: Yes - I saw it as a perk of the job for the lads to have workshop access on a Saturday afternoon. However I used to ask that they didn't take advantage or steal work from the dealership's service department. None did - goodwill swings both ways and it worked well.

Part three: service plans

Q: Are service plans a good idea from a consumer's point of view? Do you actually make any money on these?

A: Dealer groups are pushing these things rather hard as they've woken up to them being a good customer retention tool. Lock them in for three, four or five years, bingo. They can work well for the customer IF they're set up right to take into account the annual mileage AND this doesn't change through the life of the plan.

There's nothing wrong with them but the pressure to sell them from upper management is such it feels like they're being rammed down a customer's throat every time they come in - it'd annoy me as a customer.

Personally I have bad memories of them purely down to the amount of pressure and scrutiny I was put under for my department's sales figures - we refused to present a plan to a customer if it wasn't good value for them and if paying-as-they-went for services would work out cheaper.

Q: What about the service plans offered with new cars?

A: The new car ones are usually subsidised by the manufacturer to keep cars in the dealer network.

The dealer group ones are somewhat different - I worked for one group that used to sell a three year plan, for any car, for £249. Take VAT off that, then work out how much we had left in the pot to service the car. The labour rate used to barely cover the cost of the tech's time.

The response from management was "upsell". Yeah, right, flog brakes, tyres and goodness knows what to a customer who bought the car from us, used, six months ago? That'll go down well... I didn't like working for that group!

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