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The current market penetration for parts and service departments is a reflection of what the customers think about the services and the products that we provide. In the Product Support Opportunities Handbook published in 2003 by the AED customers told us that 44% of them had taken their labor to someone else rather than the OEM dealership. They also told us what the reasons were for their decisions. They also told us what the price point would have to be for maintenance in order to influence their return to our services. For those of you who have this Handbook have you made the changes to adapt to the customer needs?

The point that I would like you to consider is that unless we change something the customer buying habits will not change. They have become comfortable with their current suppliers and they need to be given compelling reasons as to why they should come back to you. What are those reasons for your business? Before making suggestions on what those reasons are let me explore what the level of market penetration is that you enjoy for parts and service.

We all know that the customer is our largest competitor is service. Similarly we all know of the parts competitors. For labor I would challenge you to prove that you have a higher market penetration that 15% of the available labor market. Similarly parts market penetration is in the range of 25%. I can hear the disbelief in your head as you think of those numbers. I would welcome a debate with each of you because I think that I can prove it. I know there will be exceptions but not many. But the main point for you that I am driving at is that you can double your parts and service volume if you get better market penetration. That being the case the opportunity in front of each of you is extremely large. Go further. Think of the profit increase for your dealership if you doubled your parts and service sales. Does that sound good?

But getting that done is going to be difficult. Although there are a lot of things that would need to change if our business doubled I want to concentrate on those “things” that will cause the customer to change their mind on their primary source of support for parts and service to return to the fold and utilize you the dealer for more of their needs. I want to reverse the trend of the last five years where 44% of the customers said they went to other sources instead of their authorized dealer.

In focus groups, surveys and discussions customer tell us what they want and need. They tell us what we need to do. But are we listening.

For the Service Department they have told us they want the following:

• A Fair Price
• Technical Expertise
• Responsiveness
• Convenience
• Quality
• Warranty

For the Parts Department it is:

• A Fair Price
• Availability
• Quality

These are the same reasons we would choose if we were the buyer aren’t they?

In the eyes of the customer we don’t stand up very well. The market penetration we enjoy is a reflection of that. We all know that we have good technical expertise. We spend a lot of money making sure that our mechanics are well trained and knowledgeable. Yet our customers don’t think we are any different than our competitors. How do you change this perception? Isn’t it about market coverage? Isn’t it about how our message is getting to the market?

I believe that all of the items above are real and that the customers are right to list them as their reasons. I also believe that we are better than they perceive that we are. But that perception is reality.

There are also items in their list on which we need improvement.

Availability is one simple example. We run out of fast moving parts each week in most dealerships. That is not acceptable is it? What are you going to do about it?

Similarly we are not as responsive as we should be in service. We are concerned about lost time and don’t have any “spare” technicians. What do you want to do?

There is a lot of work to do if we want to improve market penetration. We can’t just move past it. There is a lot at stake in your businesses. We need to deliver more in Parts and Service to the dealership. We need to deliver more in Parts and Service for our customers. What are we waiting for this time?

Don’t forget...You get what you deserve or you get what you earn.