Mining the Service Drive Appropriately During Times of Uncertainty
- Several ways to look at each customer's situation to help them financially.
- The importance of lease customers.
In this episode of Reynolds’ new video podcast, Connected, Hayley Holmes, Product Planning Manager at Reynolds and Reynolds, addresses how to approach mining the service drive appropriately in today’s environment.
Greg Uland Hello, I’m Greg Uland, marketing director at Reynolds and Reynolds, and this is Connected, the podcast with best practices and ideas to help navigate what is happening in the automotive retail industry and the world today. As the COVID-19 virus continues to change our world and how we live and work daily, this podcast discusses ways to continue operating in this unprecedented social environment. On today’s episode, we have with us Hayley Holmes, product planning manager at Reynolds and Reynolds. Hayley, thanks so much for joining.
Hayley Holmes Thanks for having me, Greg.
GU Of course. So today I’m hoping to talk a little bit about mining the service drive. The service drive is, for a lot of dealerships, the only part of the business that’s operating fully right now. But my first question is, given the current environment, is it even appropriate to be mining the service drive for sales customers right now?
HH Well, really, when done with empathy and compassion, yes. This time is a really good time to be thinking about what the customer’s needs might be. And a lot of them might be struggling financially or at least short term financially. And lowering someone’s monthly payment could be a big help to them at this point. With that being said, your normal equity mining parameters might not be the best fit. Maybe consider taking someone into a different model than what they’re currently driving, that’s maybe at a lower price point or even taking somebody from a new into a used vehicle instead.
GU Good point. So with that backdrop, what are some other parameters to look at or adjust if you are going to go that route and start to look for some sales customers in service?
HH Well, like I said, looking at different models than what they’re currently in right now and moving somebody from a new to a used would be a good point. But then the next step would be, looking for somebody that has more than twelve months left on their current loan. If they have under that amount of time left, they’re probably of the mindset of, “I’m just going to weather this storm and get through until I have no payments.”
The next thing I would look at are people that you can save more than $50 a month. The best fit for this would be people making about a $400 monthly payment or less, because we want to try to save more than 10% of their current payment. Obviously as the payment increases, the savings will need to as well. So save somebody $100 a month or more, for somebody that’s currently paying $700 or $800. Another thing to consider is looking at households with multiple vehicles and multiple payments. You want to try to save the household $200 a month, which would be a huge benefit and help to them at this time. And really looking at that monthly budget from a household perspective is what a lot of people are going to be doing in this time. Not just from an individual perspective.
GU That makes sense, and it’s easy to lose sight of that, too, right? We see a lot of times, see customers as the individual rather than part of a family, so that’s a good point. What else, Hayley? What other things are there to maybe look for in the service drive that wouldn’t necessarily be top of mind for our normal environment?
HH Another thing to look at are consumers who are leasing. You could look at people that are currently leasing their vehicle, maybe pull them ahead a little bit, but also moving people over to a lease to help them save some money. For those customers coming off a lease, which there are about 1.8 million due this spring, they really might not know what to do right now. There have been some lenders that have extended their lease due date because of the virus, but there’s so much uncertainty for people. Simply communicating to the consumer their options is a big help for them right now. On the flip side, looking at your data mining software to look for opportunities to move people maybe from a finance customer over to a lease, can help save them some money as well on their monthly budget.
GU Yeah, for sure. As long as the numbers work, I mean obviously the lease payment is going to be a lot lower. That’s not something that we always look at. But good point for sure. Hayley, definitely appreciate you taking a few minutes to hop on and talk with us today. While you’re here, while we have the audience, and before we cut out, is there anything else that you would want to share? Or anything you want to say?
HH Really just to reiterate that anything you do from a sales perspective right now, just keep in mind the customer and what they’re going through. And remember that if you are approaching customers and talking to them about sales, take the steps to really protect and keep safe and healthy, your salespeople and your customers. And remember that if you are going to talk to people, that a phone call is probably most appropriate at this time. Even if the customer is sitting in your service drive waiting.
GU Yeah, that’s definitely a fair point. Well, Hayley thank you again for hopping on. I really do appreciate it.
HH Yeah. Thank you, Greg.
GU All right. This has been Connected. Stay safe, and we’ll see on the next episode.
Continue to tune in often to see new episodes on best practices and tips for navigating the automotive industry during this unprecedented time.