Quick Cash or Quick Losses

By March 28, 2016 February 6th, 2017 Service Drive, Think Tank

Quick lanes can work well – when done correctly.

quick-cash-or-quick-loss-reportAs I travel around the country and visit dealerships representing a variety of makes, the trend of implementing a quick lane seems to be at a fever pitch.

Many dealers tell me that their manufacturers are pressing that this is a critical part of their Fixed Operations vision. They’re told that dealerships yet to deploy a quick lane process put significant incentive program dollars and improved Customer Satisfaction Index (CSI) scores at risk.

In addition, for years, many dealers have allowed portions of their Fixed Ops business to be usurped by local competitors, who have taken much of the recurring maintenance and less-skilled repairs such as brakes, exhaust and tire replacements.

All dealerships are looking for ways to stay engaged with their customers throughout the lifecycle ownership process. With the average age of the U.S. vehicle fleet approaching 12 years — and an estimated 250 million vehicles on the road — there are significant opportunities to intersect with customers over an extended period of time. And there are significant repair dollars at stake.

On the surface, the quick lube or express lane seems to be a no-brainer. Establish a process that allows customers to get their vehicle into a dealership for normal maintenance items (oil changes, filter check / changes, tire rotations, fluid flushes, etc.), perform these services in a ‘fast’ fashion at a competitive rate and everyone wins.

But do they?

SOME DEALERS ARE STARTING TO IDENTIFY THAT QUICK-LANE CUSTOMERS ARE NOT RECEIVING A VERY EXTENSIVE OR DETAILED MULTI-POINT INSPECTION AND, ALL TOO OFTEN, HIGH DOLLAR REPAIR WORK THAT’S SITTING RIGHT WITHIN THE FACILITY’S FOUR WALLS IS GOING UNIDENTIFIED AND UNQUOTED.

Drawbacks of Quick Lanes

Securing a steady stream of menial maintenance work is good if your business is designed to support these services. But there are potential problems. For example, assigning mundane maintenance work to Master Technicians or those with extensive skills in automotive repair can quickly prove to be a money-losing venture. Dealerships that create express lanes wind up hiring people who have considerably less training and experience to staff these functions in order to turn a fair financial return on the jobs that are sold.

In addition, radical changes to business processes often have to be established in order to facilitate commitments such as time-to-job-completion in order to be viewed as a reasonable alternative to the local independent operators. This may mean dedicating special bays with unique vehicle lifts or an oil change pit, the ability to stock commonly used parts at-theready and changes to the customer reception and cashiering processes.

Finally, experienced Technicians may resent the new approach because getting to do a few of the “easy” jobs each day was a nice reprieve from the often complicated electronic and drivability issues they more typically handle.

quick-cash-or-quick-loss-quick-lane

Unintended Consequences

The largest unintended consequence that some dealers are starting to identify is that quick-lane customers are not receiving a very extensive or detailed multi-point inspection (MPI) and, all too often, high dollar repair work that’s sitting right within the facility’s four walls is going unidentified and unquoted.

The underlying scenario that creates this unintended consequence is often a lack of vehicle repair knowledge, coupled with a “quick-lane mentality” by the staff members performing the service. The excuse that many stores give for this is that a quality MPI, accurate Service quotation and presentation of results cannot be performed in the timeframes established.

Dealerships that have instituted a comprehensive vehicle MPI process with their traditional repair clients typically see $150 to $300 of identified upsell opportunity per vehicle inspection completed, with a sell rate on-the-day for strong performing stores that ranges from $75 to $150 in additional purchases.

By comparison, many of these same stores have told me that when they segmented out their quick-lane clients, they could immediately see that they were not identifying much additional work beyond the customer’s primary concern (i.e., the oil change). Thus the value of each quicklane client interaction was delivering little additional profit to the business’s bottom line.

Dealerships cannot afford to spend the time, energy and expense to attract customers to their facility and then allow them to leave with significant undisclosed repair work that could have been addressed while the customer was there.

Fixed Ops Managers are starting to learn that each customer driving into their Service lane on average has a $100 bill hiding somewhere in or on the vehicle. The question is: what process or approach do they have to find it?

DEALERSHIPS CANNOT AFFORD TO SPEND THE TIME, ENERGY AND EXPENSE TO ATTRACT CUSTOMERS TO THEIR FACILITY AND THEN ALLOW THEM TO LEAVE WITH SIGNIFICANT UNDISCLOSED REPAIR WORK THAT COULD HAVE BEEN ADDRESSED WHILE THE CUSTOMER WAS THERE.

A Developing Trend

Independent quick lube businesses don’t need to perform a detailed MPI. Why would they? Most have no interest in identifying additional work that they don’t have the capabilities to perform. Dealerships, on the other hand, are designed to perform a thorough check of a consumer’s vehicle and to identify items that need additional attention from a safety, security and overall vehicle performance perspective.

With this in mind, I see a secondary trend occurring. Progressive dealers are deploying advanced technologies to deliver a quality experience to every Service Operations client while maximizing the value of that interaction.

These technology-based solutions support a less-skilled employee in performing a full and thorough MPI and can significantly speed the process of both their mainline Technicians and their quick-lane team members.

quick-cash-or-quick-loss-evhcIn either case, the employee can quickly perform an MPI, capture photographic evidence supporting repair recommendations, electronically route and instantly price recommended services.

This process improvement enables the Service Advisor to review any additional Service recommendations with the customer in a matter of minutes, all while the standard oil change or other base maintenance services are being performed.

We also see this trend in the deployment of advanced wheel alignment stations. A dealership I recently visited had deployed two of these alignment stations in the quick lane and in a matter of three minutes was able to determine if a vehicle’s alignment fell within the manufacturer-recommended specifications.

The Fixed Operations Director advised me that prior to installing this solution, the operation was performing 10 to 15 alignments per month. After the install and adoption of a process in which every vehicle was checked, it was selling upward of 150 alignments per month.

Another approach that seems to be gathering momentum is to create a teaming environment, in which a less-skilled employee is responsible to perform the quick-lane services while a more seasoned employee performs the MPI in parallel with quick-lane services. This approach works best in high-volume environments where these two member teams can be kept sufficiently busy throughout the day.

Providing automotive consumers with fast, convenient and competitively priced services is the goal of both independents and franchised new car dealerships. Historically, the independents excelled in speed of Service, while dealerships delivered deep vehicle repair knowledge and extensive Parts inventories in a more complete, albeit, time-consuming Service experience.

Dealerships don’t have to allow the independents to continue to own the “speedof-service” component of vehicle repair.

With integrated MPIs and other advanced technologies, dealerships can now match the independents’ speed-of-service without sacrificing a quality customer experience. That can only be found within a dealership’s Fixed Operations Department.