What are the biggest challenges facing your dealership in general, and your parts and service department specifically?
The biggest challenge is overcoming customer's attitudes about spending money in today's economy. Many people don't want to spend money right now. When it comes to service and parts, instead of fixing the little things that can go wrong with their cars, they wait, which causes larger, much more expensive repairs. At Volkswagen SouthTowne we try to maintain good communication with our customers so they know how important it is to keep up on their maintenance, brakes, timing belts, etc. We show them that by doing this they are really saving money in the long run.
In 2008 we felt the pinch of the economy as far as a decrease in customers and repairs. However, by increasing our advertising and communication with our customers, we have been up in 2009. First quarter was great, we are still the number-one Volkswagen dealer in Utah, and will continue to be. We refuse to let fear and anxiety run our dealership, and our customers are feeling that positive attitude.
Has the importance of fixed-ops to your business changed in the past few years? How so?
We have always acknowledged the importance of our fixed operations departments. We have a motto that our dealership is a place "Where Good Things Happen." Our service and parts departments are a place where we make sure our customers have an excellent experience. We know that the success of our store depends in a large part to our customer's happiness with our service and parts department. So we offer complimentary juices, water, coffee and other refreshments to all our service and parts customers. We have toys for the kids and uplifting, family-friendly videos playing in our waiting area. Plus our employees have great attitudes. I believe this is a big part of our success. So while our business is growing in 2009 despite the recession, we believe that when the economy does turn around our success will be immeasurable.
Do you believe there are opportunities for the sales and service businesses to augment each other—i.e., for sales to use the service department as a selling tool, or for the service department to provide additional leads to the sales team? How "integrated" do you think these operational areas of a dealership could or should be?
Every department must be very integrated with all the others in order for the entire dealership to have success. Service helps with car sales, parts helps increase service hours, and the new and used car sales help increase parts and service sales. We all work together as a unit, and it is highly visible. All departments of Volkswagen SouthTowne complement each other very well. This happens when everyone has a positive attitude and highly motivated actions. This kind of coordination makes for the best possible working condition. And the bottom line of the dealership becomes a much larger bottom line.
What sort of strategies do you use to attract and retain service/parts customers? Can you provide some examples—promotions, discounts, e-mail campaigns, etc.?
We have several strategies, but number one is always keeping our name in front of our customers. Advertising is a top priority at Volkswagen SouthTowne. We are branding our service department as "Dealership Quality at Quik-Lube Prices" and our parts department with the tagline "Fast, Fair, and Free Overnight Shipping." We integrate these and other important selling points in all our advertising, including our Web site, radio advertising, internal hold spots, promotional items, e-mail reminders, and direct mail campaigns.
What sort of inventory management challenges does your parts department face? How do you address those challenges?
The greatest inventory challenge is getting our warranty service customers to come back in to get their free repairs done. It's amazing that in today's economy customers come in and order parts under warranty, but do not return to get them put on their vehicle. So the challenge is not creating obsolescence in the inventory. By strategically taking advantage of our obsolescence returns, we still manage to stay at or below 3% obsolescence, juggling the small portion of special ordered parts for warranty customers.
