When customers pull in for service at Mike Shaw Toyota-Scion in Corpus Christi, Texas, there's a 1-in-20 chance they'll wind up selling their cars to the dealership.
And that's a good thing, says Rick Jones, the store's 35-year-old general manager.
The dealership is having success these days with a new twist on an old retailer practice known as "selling out of the service drive."
For Jones, who has been working in auto sales and store management since he turned 18, the practice is helping him with two missions. He is trying to improve the Shaw store's access to used cars. And he is also trying to build customer retention for the young store, which opened just five years ago.
In the past, the practice typically involved putting salespeople among the customers waiting to have their vehicles worked on. The salespeople would try to entice customers into buying new cars, zeroing in on older cars, and maybe even playing on their anxiety over the particular repair job they were having done.
But Jones's version of the practice at Shaw is different.
"We're not pressuring anybody," Jones says. "We don't want any of our customers to feel uncomfortable. We're just making sure they know what their car is worth to us, and if they want to trade it in or sell it, we'll cut them a check."
At the Shaw store, one of six dealerships that Denver-based Mike Shaw Automotive owns in Colorado, Louisiana and Texas, the effort is more of a concierge service.
Instead of having salespeople strolling among the customers, Jones employs a full-time person whose desk is in the service department. She will approach customers and ask about their vehicles. She will offer them a cookie and a soft drink and offer a free, no-strings market appraisal of their vehicle "just in case they were curious what the vehicle is worth," Jones says.
"We never use the word 'appraisal,'" he says. "That tends to intimidate owners. You have to be very careful that you don't pressure people. A service customer can be very apprehensive."
The dealership obtains a trade-in evaluation on the car from AutoTrader and shows the customer what the market would pay for it.
"But then we show them that we would pay a higher price," he says. "We offer to write them a check on the spot, and we give them the offer in writing and guarantee it for seven days or 200 miles."
Some customers decline and move on. But some take the offer. In July the dealership processed 1,140 service customers, Jones reports. Of those, 274 accepted the free analysis. The take rate was just a tad below average: Thirty-one chose to trade their vehicle in for a new one and 14 others simply asked for the check and handed over their car keys.
"Maybe somebody's lifestyle recently changed and we're able to buy their car right off the service drive," Jones says. "We show them our offer, and 30 minutes later we're driving them home with a check in their hand.
"It works out for all of us. The customer who does it is always ecstatic, and our CSI on those folks is always up at 100. We usually know the car intimately because we sold it to them in the first place. All the service records are on hand. And we're not competing against 10 other dealers for the buyer."
The dealership already has ranked among the top five Toyota stores in its five-state Gulf States Toyota region for retention. But Jones wants to be No. 1.
"Retention is a key focus for us," he says. "We're still a young dealership. Our business needs some longevity and time to increase our total number of units in operation."
The first two years of the store's life -- which began the month before the 2008 economic meltdown -- new-car sales averaged 1,100 a year. This year Jones is on track for 4,200 sales. But it is more cost-effective to hang on to the customers he has than to advertise for new ones.
"People do their shopping online and they visit fewer stores today than they did 10 years ago. It's too expensive and hypercompetitive to go out and find new customers. It's easier to retain the customers you have. And that means keeping them happy."
The customer purchase practice began purely as a way to build used-car inventory.
"We buy anything we can," he says. "If it's not something we'd typically retail, we recognize it's something we can wholesale and make a profit on. If we can buy something and send it to wholesale and make $400, why not do it?"
But there is another benefit to the evaluation process, he says. It establishes a positive relationship with a service customer.
Owners who accept the free estimate tend to remember Shaw as the dealership that offered them a good deal, Jones says.
"That keeps us in their mind. Maybe they don't want to trade or sell to us today. But some day they will, and they'll think of us first," he says. "That's the idea of retention."