Rich Reinicke’s article in Fixed Ops Magazine (pp. 22-25) offers several important insights into service department business processes as they relate to warranty repairs. First, Reinicke notes that about 30% of all service department revenue is from warranty repairs. Equally important, he cites a Ford Motor Company source as saying that 30% of all dealers are in Ford’s “Warranty Counseling Process.”
Second, Reinicke points out that warranty audits can be costly for dealers. A $60,000 fine resulting from inadequate paperwork and subpar processes is apparently not uncommon after audits.
Finally, the article notes that every document touched by technicians and service advisors has legal ramifications during warranty audits. Whether notes are scribbled out, whether RO’s are time stamped, whether consumer approvals are properly documented…these are all issues that factory heavily into the outcome of a warranty audit.
Given the financial status of OEMs, it’s not surprising that warranty audits and other cost-cutting measures are receiving more attention. In this light, we often emphasize ClearMechanic’s ability to create first-class documentation of additional repair approvals (and declines).
We are excited to have a speaking role at the Digital Dealer Conference in Orlando from April 20 to 22. Please contact us if you would like additional information about the presentation. I have included a brief summary below.
How to Tap into $64 Billion in Lost Service Revenue
Improve the customer experience while increasing service profits
Research shows negative perceptions of the repair experience by consumers contributes to an estimated $64 billion in maintenance work that goes unperformed each year. Yet many of the pain points customers experience can easily be fixed and lead to loyal relationships. In this dynamic session, automotive software entrepreneurs Brad Simmons and Jonathan Altman of ClearMechanic, will categorize some of the most pressing pain points customers share when in the service lane and tips on how to solve them. The suggestions they share will cost little, yet bring in big gains for the service department’s bottom line. In addition, Brad and Jon will present case studies of dealers who used their suggestions to significantly increase revenue.
An insightful article by Erin Kerrigan of AutoStar on just how important service center profits are to dealerships. The service department generated an astounding 225% of profits at the average dealership in 2008. But most dealers spend the majority of their time focused on new car sales…just think what would happen if more attention were paid to service operations.
Erin points out that “Americans have grown accustomed to demanding great service – if they received it from their car dealership, it would likely make them want to return, rather than dread the visit.” We couldn’t agree more.
ClearMechanic is pleased to announce a formal partnership with ADP, permitting direct, real-time integration with ADP dealer management systems.
Interesting Automotive News article on forward-thinking initiatives by Kia Motors to enhance customer loyalty and boost customer pay work.