Andy Baldassarre | BG Director of Marketing and Training
Imagine your service department as a leaky faucet. At first, it may not seem like a big deal—just a few drops here and there. But over time, those drops add up to gallons of wasted water.
Now, imagine that the water is revenue; it’s easy to see the reality that many dealership service departments face every day. Service revenue is the backbone of dealership profitability. Yet, countless dollars trickle away due to outdated customer reception and inefficient (or missing) vehicle inspection processes.
The good news? You can fix these leaks with a few strategic adjustments. Find the key areas where your dealership could be losing money, and plug those financial holes before they drain your bottom line.
Studies show that 70% of customers are not presented with inspection-based recommendations but, when offered, 50% of customers approve the work to be performed.
Drip Drip, Drip: Repair Revenue Holes
THE LEAK: Inefficient, outdated inspection processes.
Many service departments still rely on disorganized workflows that hamper operations and hurt revenue:
- Paper-based inspections: Illegible handwriting, misplaced forms, and slow processing mean incomplete recommendations and missed service opportunities.
- Failure to revisit declined services: Many dealerships don’t track or follow up on declined services.
THE FIX: Digital inspections and real-time reporting streamline technician workflows, improve service advisor efficiency, and increase customer approval rates. Dealerships implementing digital inspections see a significant jump in recommended service acceptance rates.
THE LEAK: Uneducated customers.
Customers who don’t understand why a service is necessary will likely decline a basic recommendation. Too often, service advisors fail to clearly explain how the service benefits the customer, leading to lost revenue:
- Maintenance-is-optional mentality: “If it ain’t broke, don’t fix it.” Customers won’t approve a service unless they perceive an immediate need.
- Lack of visual proof: Service advisors who recommend preventive maintenance without showing visual displays, before-and-after comparisons, or real-time diagnostic reports don’t sell many preventive maintenance services. Customers are more likely to approve services when they can actually see the issue.
- Weak service advisor communication: If customers hear, “You need a fuel system cleaning,” but aren’t told how it improves fuel efficiency and engine longevity, they won’t buy in.
THE FIX:
- Train your service advisors to communicate benefits, not just features.
- Use physical and digital tools to provide visual proof of needed services.
- Simplify technical explanations and use relatable analogies to make the need for maintenance clearer for customers.
Dealerships that implement a structured declined-service follow-up process recover up to 30% of lost revenue opportunities.
THE LEAK: No follow-up on declined services.
One of the biggest lost-revenue opportunities in fixed operations, a “no” from a customer is often treated as a final answer, rather than as a future opportunity:
- No tracking system: If a customer declines a brake fluid exchange today and their brakes fail in six months, they may not return to your dealership. That’s revenue walking out the door.
- No follow-up strategy: Many customers would approve previously declined services if reminded later via a text, email, or phone call.
- Reactive approach: Waiting for customers to return with a costly repair is not proactive. Neither is letting them leave the service drive without educating them on the benefits and down-the-road cost savings of doing preventive maintenance now.
THE FIX:
- Implement a tracking system for all declined services.
- Establish a structured follow-up process via text, email, or phone.
- Offer incentives and seasonal promotions to encourage customers to schedule deferred services.
Data shows that when customers fully understand the benefits of preventive maintenance, service approval rates increase by 50%.
Investigate and Correct Revenue Leaks
If your service department struggles with low maintenance service conversion rates,
missed service opportunities, or inefficient inspections, here’s how to diagnose and fix
the problem:
STEP 1: Audit your inspection process:
- Are your technicians using paper-based inspections, or have they transitioned to digital tools?
- How long does it take for technicians to relay recommendations to service advisors?
- Do you track the percentage of recommended services that are actually approved?
STEP 2: Evaluate service advisor communication:
- Are they using before-and-after images to demonstrate service needs?
- Are they trained to build trust and overcome objections?
- Do they follow a structured process for documenting and revisiting declined services?
STEP 3: Implement a declined services follow-up plan:
- Track all recommended services that weren’t approved.
- Set up automated follow-ups via email, text, and phone reminders.
- Offer seasonal promotions and service bundles to incentivize return visits.
STEP 4: Measure, adjust, and optimize:
- Review weekly and monthly reports to identify service revenue trends.
- Implement teamwide performance metrics to hold technicians and advisors accountable.
- Provide ongoing training to ensure consistent execution.
Service departments that follow these 4 steps can increase customer-pay revenue by 20% or more within six months.
Capture Every Drop of Revenue
Your service department isn’t just about fixing cars—it’s about preventing problems, building trust, and maximizing revenue. Customers want their vehicles to last longer, perform better, and avoid costly breakdowns. They just need guidance in making the right service decisions.
Will your dealership seize the opportunity, or will revenue leaks continue? Take a deep dive into your service department’s metrics today. Identify how many recommended services go unapproved and how many customers never return. Once you see the numbers, you’ll know exactly where to focus your efforts. The leaks are there; the fix is in your hands.
About the Author
Andy Baldassarre leads the marketing and training departments for BG Products, Inc. He has more than 23 years of experience in the automotive industry with an emphasis on adult learning in the automotive workplace.
