Service Department Reinvention: From “Back End” To Beacon Status

March 12, 2013


In my day as a dealer, I held the same view of my service department as many dealers do today: It was the “back end” of the business.

I understood, of course, that my service and parts operation was critical to the overall profitability of the dealership—especially in months when my advisors and techs carried the whole store through a slow cycle of vehicle sales.

But I didn’t give the service department any more than the requisite attention it needed. I thought that I had bigger fish to fry and, frankly, I shared most dealers’ addiction to the let’s-make-a-deal excitement the showroom served up every day.

I’m pondering my former mindset after reading an article in this week’s Automotive News that discusses how a growing number of dealers are ditching the “back end” mentality. As they build and renovate facilities, these dealers are relocating their service departments to sit side by side or, in some cases, in front of their showrooms.

The trend strikes me as another facet of the market-driven reinvention dealers must embrace if they want to maximize the overall dealership efficiencies and profitability in an era of ever-tightening vehicle sales margins.

My latest book, Velocity Overdrive: The Road to Reinvention, address how today’s margin-eroded market no longer forgives a lack of harmony between a dealer’s service and used vehicle departments.

Both departments must collaborate more efficiently and effectively to ensure a dealer’s successful execution of the Velocity Method of Management and the increased profitability that a fast-turning used vehicle-driven “wheel of fortune” delivers.

I share these dealers’ belief that a greater degree of parity and prominence for their service departments will yield increased loyalty, more service work, and improved profitability. It will be exciting to see how these stores reinvent the layouts of their service departments to boost technician efficiency and productivity and increase the velocity of their service/parts sales. I can also envision a host of personnel management challenges and opportunities as this service-focused effort gains momentum.

It’s fair to say that the Automotive News article offers all of us a useful, thought-provoking nudge: Perhaps the “back end” of our business is really a beacon for the future.