Brian Benstock acknowledges neglecting the service department.
Until just over a year ago, service marketing at his Paragon Honda and Paragon Acura stores in New York amounted to answering customer calls with "Service, please hold," said Benstock, the dealerships' general manager. He even recalls a service manager who once put a cardboard sign on a garage door that said "Service full. Sorry."
Benstock made the manager remove the sign immediately, but even then Benstock paid little attention to service.
"It was an absolute blind spot," said Benstock, who runs one of the top-selling Honda dealerships in the country. "I've always been good on the variable side, sales, but fixed ops was never my deal."
That changed after Benstock saw the service results at Mungenast Automotive Family in St. Louis, a participant in his 20 group. "I thought they must be servicing every car in St. Louis," Benstock said.
So Benstock studied his problem department and turned to a strategy that has worked for him in sales: a business-development center. He gave up his office in the Acura store to house a six-person center dedicated to generating service work. Using Paragon's customer database, the center has increased business in part by following up on work recommendations denied by customers on previous visits.
In the past, Paragon's service advisers gave customers those recommendations, but nobody followed up. Now the center's employees contact those customers by phone, e-mail or mail and offer discounts to get them to return with their vehicles.
When the center was launched last June, Benstock said he noticed a 30 percent spike almost immediately in the dealerships' customer-paid labor gross margin. In the first quarter of 2012, Paragon Honda ranked No. 9 among U.S. Honda dealerships in customer-paid labor sales. It had been 40th, Benstock said.
Paragon's typical customer had been visiting its service department once a year but is now coming in twice a year. Paragon hasn't added lifts, but it has hired two more service advisers and three porters. Paragon has 30 total lifts in the Honda department, 14 total lifts in the Acura department.
The dealerships, in Queens, also are offering free pickup and delivery -- even for a $29 oil change. That's especially appealing to time-strapped customers three miles away in Manhattan, Benstock said. The perk also is in Paragon's "intelligent self-interest," he said, because the dealerships have limited space to park vehicles awaiting service.
Benstock estimates his annual investment in the service business-development center at about $210,000. But he figures he'll pick up an extra $1 million-plus this year in added customer-pay business. And even better days are ahead as his staffers become more proficient at customer retention.
"We're not good at it yet," Benstock said. "We're just grabbing the chunky, low-hanging fruit that we never had."