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2019-03-18 Lets Talk Shop for BHPH

Lets Talk Shop for BHPH

By Gene Daughtry, BHPH Consultant , 

 

In BHPH one fact of life is vehicle breakdowns.  Selling cars is easy. With all the vendors available finding vehicles is easier than it has ever been and with the industry transitioning back from Special Finance to Deep Sub Prime (lenders repossessing at a record pace) soon there will be even more vehicles a typical BHPH dealer can use and the prices should reflect the availability once the tax “rush” has ended.

As we know our customers are maintenance challenged for various reasons from not being organized, never learned they had to do maintenance (dad and mom didn’t) or have the money. In any case your customers have many vehicle issues to deal with on a regular basis, some real, some not and some self-inflicted. The question is do you let the customer deal with the issue themselves or do you have a solution in place to help keep your vehicles on the road?

I have always advocated that we anticipate the problems we know customers are going to have and put a plan in place to handle the problems when they roll in. The first thing I learned about the car business after I figured out how to get a car deal done was we would be dealing with the customer again. In retail sales you want to continue a relationship with your customers. In BHPH you have no real choice. Our customer is going to need our help with their loan and the vehicle during the life of the note so having a plan to receive them when they come in is good. If you say ‘no” to their request for help you will often find your car on the lot with no license tag or one of several other places it got left the next time it failed.

So what to do? I have always had a full-service shop operation. 4 dealerships I built for other companies, all with shops, so we could control the expense and customer service that comes with selling high mileage rigs to maintenance challenged customers. My shops always operated similar to a franchise operation. A customer service person (service writer) to screen the customers issues and determine next steps. There is a manager and lead technicians that would diagnose the problems, quality scanners to help pinpoint the issue and full-service operations to handle any problem we encountered and find the right parts.

If you do not have a shop at least do you have a “service writer” type person with a good scanner and computer so they can determine best course of action for your customer and control who discusses the problem? When you tell your customer, over the phone when they call complaining, to go see Joe the muffler man down the street about their car problem, Joe isn’t worried about your note. He wants to up sale your customer and will give them a laundry list of items he could fix. Here comes your customer to you “hair on fire” about the POS you sold him per Joe and the thousands of dollars it’s going to cost to make repairs.

Most dealers using Joe down the street spend the highest dollars in this scenario. The dealer doesn’t know what is really wrong. Joe needs to make money and is charging the dealer or the customer close to retail for the work and the dealer is generally too busy to check up on Joe so the repair recommended is often done at someone’s expense (usually yours) or the vehicle is left with an unpaid bill and Joe gets to sell it.

 

I suggest you have a technician or someone with some experience in repairs on staff to field all service issues (including body damage) and do some basic diagnosis to discuss with the shop down the street. I would even have my service writer deal with our customer at our dealership, take control of the car and get it to the shop so our customer only hears what we need them to hear. We control the expectations and getting paid.

There are a lot of variables at this stage of the life of your loan. Do you have a service contract or warranty (reinsurance or third party), does your dealership and Joe’s muffler have a long-standing relationship, do you have a tow truck or hire out wrecker services, how experienced is your “service writer” and what else does he/she do for you?

I will go more into detail in other articles about BHPH and service operations. What works and what doesn’t. Where can you save money and where can you generate revenues. Yes, you can make revenue dollars from having your own shop and help stop the bleeding out back. When is NO the right answer and when do you stop fixing and exchange vehicles to stop a problem are all things I can cover. I will also discuss setting up a shop. What do you need, who do you hire, what do you pay them, what do they need to bring, what are the traps to watch for, what is OSHA looking at, what software’s can help and what documents are best?

How you handle repair issues is as important as how you handle collections, they are tied together and affect your reputation and sales. Have a plan and control the customer’s expectations as much as possible.  You need to keep your collateral rolling and making those payments.

 

Gene Daughtry has almost 30 years of BHPH experience. He setup and operated 4 different dealerships, all with full service operations. Currently Gene represents Jilcat Proline and their super lubricant line of products, does training with Auto Master Systems, provides Service Consulting and capital help for dealers through BHPHservices.com

gene.daughtry@bhphservice.com or call his mobile 479-970-4049