General Motors (GM) Corp. has gone underground in its effort to help its car dealers attract and keep service business.
From a nondescript but high-tech facility called Underground City at its headquarters in suburban Detroit, GM Service Operations shares with dealers its latest strategies for satisfying service customers.
In May, for example, the service division launched a program for communicating with dealers that relies on GM's OnStar telematics system. OnStar notifies subscribers by e-mail when their vehicles are due for maintenance. Now GM conveys the same diagnostic information to the dealerships that sold those cars and trucks.
The program will create 6.5 million service leads a year for GM dealerships, said Peter Lord, executive director of GM Service Operations. ``Our dealers are beginning to connect the dots. The profit generator that parts and services are is more important to dealers as the vehicle market gets more competitive.''
GM Service Operations also has launched a program aimed at resolving service problems within 24 hours. The car maker patterned the program, which is monitored from Underground City, on emergency response practices developed by the federal Centers for Disease Control.
GM estimates that three in 10 buyers of its vehicles return to the dealership for maintenance or repair work. The company wants to boost that figure to four of every 10 customers in three to five years. If that happens, GM spokesman Tom Henderson said, a typical dealership's overall profit could increase by 10 to 15 percent.
Good service creates vital customer loyalty at a time of slumping new vehicle sales, GM said. Mr. Henderson cited GM data that suggest a highly satisfied service customer is as much as nine times more likely to buy another vehicle of the same make as a disgruntled customer is.
And a dealership that boosts its parts and service revenue, Mr. Lord said, ``can afford to do the really tight, marginal deal to sell a vehicle.''
Tommy Brasher, a Chevrolet and Buick dealer in Weimar, Texas, said he expects the new OnStar notification program to create service opportunities at his dealership. Parts and service revenues cover about 65 percent of his dealership's operating costs, he said.
``If you're very good at selling cars, you have a lot of competition,'' Mr. Brasher said. ``If you're very good at service, you have no competition.''