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Digital Tools Help Service Departments Become More Efficient, Transparent and Profitable

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Digital technology is changing the game in fixed operations. An array of software tools aids service departments in elevating practices from vehicle walkarounds to parts orders.

These tools are increasing transparency in customer service, improving internal and external communications and making dealership shops more efficient and profitable, fixed ops professionals say. Here’s a sample of the software they like.

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Digital drive

Dawn Newsome, vice president of fixed operations at Vaden Auto Group in Savannah, Ga., says she started to dabble in digital tools around 2012. In 2015, Newsome says, she went “all in” at the group’s 10 dealerships on Xtime, a suite of products offered by Cox Automotive designed to help service departments retain customers by modernizing their appointment scheduling, vehicle inspections and payment options. Newsome says she uses Xtime’s Engage, Schedule and Inspect programs.

“The biggest thing going digital has changed about how we run the service department is how it helps us manage it,” Newsome told Fixed Ops Journal. Xtime products let her create a personalized service menu for each customer, she says.

Newsome says Vaden dealerships’ gross profit on customer-pay service work has grown an average of 18 to 20 percent each year since the group started using Xtime. In July, she adds, the group made its largest monthly customer-pay profit of about $780,000.

Digital tools make it easier to hold service employees accountable and hit goals, Newsome says. Figuring out which employees were — or weren’t — doing well at performing multipoint inspections or recommending service work to customers formerly required managers to spend hours thumbing through repair orders and keeping a log, she notes.

“Now, what used to take four or five hours once a week takes 15 seconds,” Newsome says. “We can manage at the drop of a finger.”

Service advisers and technicians often waste time trying to reach customers to schedule an appointment or get a repair approved.

Software products enable these employees to text or email customers with service updates, and to follow up automatically about setting up future visits.

Auto.Live, created by software developer DreamWare Inc., is one such tool. Aric Heuring, service director at Brandon Dodge on Broadway in Littleton, Colo., started using the product in January 2017. He says the software allows his shop to send customers pictures and videos of a vehicle during repairs, building trust and satisfaction.

“It creates much better customer satisfaction because it makes them part of the process,” Heuring says. “They’re not behind that closed door and worried about smoke and mirrors. They ask for videos, they ask for pictures — we send them whatever they want.”

Heuring says his dealership’s year-over-year gross profit for service labor increased 38 percent in the first half of 2017, or about $500,000. Parts gross profit increased 15 percent, or about $100,000, over the same period, he adds.

An Auto.Live subscription typically costs dealerships $3,500 a month. Heuring says the software has replaced multiple products he used before.

Quorum call

For Tony Dutton, fixed operations director at Capital Buick-GMC in the Atlanta suburb of Smyrna, Ga., digital tools have made vehicle walkarounds easier and communication faster. Before their advent, he says, his service advisers often couldn’t find time to do walkarounds and faced extended waits for confirmation of parts availability and prices.

“Because it’s more efficient and not as labor-intensive for someone to quote” prices using digital tools, Dutton says, service employees “have a tendency to quote a lot more stuff.”

Dutton uses XSellerator, a digital tool from Quorum Information Technologies. The system enables service employees to send messages to each other and request parts from the dealership’s parts counter.

The software also includes an electronic vehicle inspection process called M3, which Dutton says has streamlined the walkaround for his advisers. Using an app on their tablet computers, advisers identify needed work during the walkaround, request required parts and give customers accurate price quotes created by the system within minutes.

The month before Dutton adopted Quorum’s vehicle inspection process in 2015, the dealership’s service department generated $56,300 in customer-pay labor revenue. The next month, that figure jumped to $85,900, he says.

“It just stands to reason,” Dutton says. “The more you quote, the more you sell.”

Quicker financing

For Andy Ostmark, senior director of service operations for Ken Garff Automotive Group in Salt Lake City, digital tools provided an answer to service customers who refused to get repair work done because they thought they couldn’t afford it.

In late 2016, Ostmark started using an online financing application called Sunbit in Garff’s Culver City Toyota dealership in suburban Los Angeles. Sunbit processes customer data provided by a dealership’s service department to respond within minutes to an application for repair financing. If a customer is approved, Sunbit works with Transportation Alliance Bank Inc. to provide financing options.

Half of Garff’s 54 dealerships use the program, including all 12 of its stores in California. Ostmark says nearly 1,300 service customers at Garff dealerships have gotten repair financing through the tool.

In 2017, Ostmark says, the application accounted for about $340,000 in service labor and parts sales at Garff dealerships. He projects 2018 sales will reach $1 million as more dealerships add the application.

“Our No. 1 reason people don’t buy is because they say they can’t afford it,” Ostmark says. “I was standing in a store three weeks ago and a customer says, ‘I have Sunbit, so I can do that repair today.’ ”

All aboard?

Although digital tools can make a dealership service department more profitable, they only help as much as employees allow, warns Rob Gehring, president of Fixed Performance Inc., a fixed ops consulting firm in Huron, Ohio. Software products can be “wonderful,” he says, but they require employee buy-in and appropriate training.

“Many times I’ve witnessed the system go unused or little used, and with that there’s no value,” Gehring says. “Even though the investment is made, why are these people not using them? I’m blown away by it.”

Heuring of Brandon Dodge agrees that, used correctly, digital tools provide greater efficiency and thus greater shop profits

“A service department’s inventory is labor hours,” Heuring says. “Once time is gone, it’s gone. So if this program can make your inventory more efficient, the sky’s the limit. It pays for itself.”

View the original article on Automotive News at this link.

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