Breaking Down Quick Service for Car Dealers: Introduction to the Business Model, Part 2

As introduced in Breaking Down Quick Service for Car Dealers, Part 1, the volume-driven model of quick service forces dealerships to abandon the age-old service metrics for a new mentality: long-term investment in customer retention.

DrivingSales News continued the conversation with Jon Lancaster and his construction team to unearth the (avoidable) pitfalls dealers face in executing the construction of a ground-up quick service facility.

Over a decade ago, Lancaster shared his vision for Jon Lancaster Express Service with Tom McCoy (a local architect/engineer) and Dan Bertler (the general contractor on the project).

“Think about health care,” Lancaster recalled his introduction to the construction team. “You’ve got a hospital for the big jobs and a clinic for fast services and diagnosis.”

In order to create a clear division between the purposes of each facility and maximize volume at the “clinic,” Lancaster’s quick service site was located across a four-lane road from the dealership.

“We began strategizing the design with a clean sheet of paper,” said Lancaster. “Referring patients to the hospital required excellent internal communication and a clear pathway.” The six-month planning process hinged upon many city approvals. A specific challenge was achieving authorization to cut a median across the highway to ease access between the properties for both customers and employees.

The face of Jon Lancaster Express Service was four, clean and tastefully landscaped, express service bays. Behind the store, eight more stalls were reserved for additional maintenance sold within the quick lube: changing tires, alignments and balance, and brake work. When these stalls weren’t occupied by the day’s incoming service, the bays were utilized for used car reconditioning.

The entire quick service operation was housed on approximately 1.3 acres. An additional half-acre held Lancaster’s customer retention goldmine: a self-service deluxe car wash, which was included for free with a $39.99, 15-minute oil change and 21-point inspection.

Mccoy Engineering designed interior stations for technician’s convenience to minimize customer wait times. Bertler (owner of the GC firm, Supreme Structures) admits shopping local Valvolines and Jiffy Lubes and interviewing employees about what worked and what didn’t in the way their daily workspaces were designed.

While shopping the competition and reviewing franchise material for independents, it became evident that pits were an operational necessity. According to the most recent Jiffy Lube franchise information, “all oil change service bays must have a full basement pit” and for existing stores looking to franchise, “if the building does not have a basement the cost to add one will most often stop any further consideration.” The construction team heeded the expert advice and designed the four express bays with fully equipped pits for techs.

The eight reconditioning and maintenance bays were traditional service stalls in size and design, but included tire carousels. Here, as many as 600 of the most frequently sold tires were stocked and immediately accessible.

Because convenience and customer-comfort was priority at the facility, the blueprint included both a quiet waiting area and a general waiting area with a TV. Customers could enjoy a beverage from a gourmet selection of coffees and juices and utilize complimentary Wi-Fi.

Lancaster attests that establishing an understanding of the business model with A/E and GC from day one was key to completing the construction within a well-communicated timeframe and budget.

“The main challenges in building an efficient and cost effective quick lube are complying with the local building and fire codes and utilizing regional experience to manipulate ‘image package’ plans set forth by OEMs,” said McCoy. “Requirements such as number of exits, fall protection devices, fire barriers, and clearances all affect the bottom line.”

Despite the greatest efforts, Lancaster admits the original design wasn’t flawless. The original facility was built with equipment that wasn’t able to withstand the volume within the first year in business. “The top-of-the-line equipment probably cost 15-20 percent more than what we originally chose,” Lancaster shared. “Looking back I would buy the very best quality I could get; because replacing equipment takes time and lots of money.”

Lancaster smartly installed an 8,000 gallon tank to store used oil. During the winter months, the used oil was a heat source for the facility. Through summer months, it sold for high dollars to asphalt companies. It didn’t take long for Lancaster to realize the tank wasn’t big enough to maximize the return throughout economic cycles, so he replaced the original tank with a 20-thousand gallon version.

After nearly three years removed from the day-to-day dealership processes, Lancaster remains extremely active as an advocate for dealers. Acknowledging the formidable facility requirements dealers face, he continues to urge dealers to think proactively about the facility of the future. “Customer expectations are moving at a pace we have never seen,” he said. “My quick lube model allowed us to build a relationship upon quality and convenience and we fostered our customer’s loyalty; that’s the right direction for industry.”