“Fixed ops departments account for the bulk of dealership’s profits.” Sound familiar? How about, “A healthy and profitable fixed ops department means a healthy dealership.” You’ve heard it all before. Yet, growing your service clientele, let alone retaining your existing clientele, is easier said than done.
Independent mechanics and even some mobile repair businesses are winning over many of your prospective and existing customers with lower pricing and more convenient services. So how do you beat out these greatly feared competitors?
I’ve pooled together some proven tactics and best practices from a number of industry leaders and solutions providers to help improve your fixed operations and generate more revenue for your dealership.
1. Keep the warranty going
Every dealership faces service defection. It’s most common for customers to defect either between the vehicle purchase and first service appointment, or when the manufacturer/extended warranties run out. There are several ways to help combat defection in your service department, such as setting up the first service appointment during the F&I process, sending out targeted service emails through the CRM, or offering maintenance and repair specials for vehicles out of warranty.
Though these existing methods work well, Naked Lime Marketing suggests in this article an even better way to limit defection --particularly for vehicles out of warranty. “A better option is to move customers from their current vehicle into a newer one, restarting the warranty period.” If your dealership can execute on retaining customers while their vehicles are under warranty, you can significantly reduce defection by putting them in a new vehicle of a similar model and monthly payment before their existing warranty runs out.
2. Build trust
In this recent post, CDK shares an infographic with some eye-opening statistics about trust, or lack thereof, within dealership service departments. According to the infographic, 75 million motorists DON’T have a repair shop they trust. On average, dealers lose almost half of their service customers after warranty and more than 80% of dealers are concerned about losing customers to independent service providers.
It makes perfect sense why Naked Lime’s post emphasizes the value of resetting the warranty with a new vehicle once consumer’s existing warranties run out. However, that’s not the only solution. As CDK states, “When it comes to service, It’s not just about price. It’s about trust.” Your dealership can start building trust by increasing your online service presence. View the infographic for pointers on how to improve for online service strategy.
3. Embrace technology
Technology is not only valuable for improving the vehicle shopping process and generating sales, but is essential for dealer service departments as well. In a blog post written by Sharon Kitzman, Dealertrack VP and General Manager DMS, she really drives home the value of investing in technology. “If consumers can get this type of service and technology at the corner auto shop, shouldn’t they expect the same treatment at a dealership?”
Some of the technologies Sharon mentions include:
Texting/email for service reminders, repair information, and appointment times
Tablets at the dealership to confirm service or repair and to record any additional requests
Not every service visit goes as smoothly as we’d like it to. When looking under the hood, so to speak, mechanics may find additional items that need attention. Unforeseen repair expenses can be a real bummer, especially when finances are tight. Financing is an excellent solution.
AutoRaptor highlights the value of auto repair financing for both the customer and the dealership in one of their recent blog articles. They also break out the financing options and how to determine which one is the best fit for your dealership. If you want your fixed ops to be as profitable as possible, auto repair financing is a great option to make available for your service customers.
5. Earn trust and respect
If customers are receiving good service, competitive pricing, and consistent service reminders, why are they defecting to independent mechanics when their warranty runs out? Or better yet, why would another oil change coupon win back a defected customer who has been receiving service offers for the last few years? These are some excellent points Jamil Zabaneh, president of J&L Marketing, raises in his blog article.
We mentioned trust being an issue in tactic #2, however, there's more to it. Zabaneh concluded that dealerships must gain the trust and respect of their customers. One tactic J&L Marketing found works well is offering a service clinic with a complementary 60-minute multi-point inspection. “A service clinic is a chance for you to create an event specifically designed to overwhelm your current, inactive, defective, and prospective customers with your service and expertise.” This is an excellent way to showcase the knowledge of your dealer technicians on each customer’s specific vehicle.
6. Make service convenient
Convenience is one of the biggest factors for service customers. In an article on Digital Dealer, the writer Ujj Nath (Founder & CEO of myKaarma) hits the nail on the head. “Today’s consumers don’t want to have to drive to a dealership, drop their car off and return later – especially when there is a Jiffy Lube around the corner from their workplace that promises 30-minute oil changes.” There’s a perception that dealership service departments are inconvenient, expensive, and take too long.
Nath suggests that one way you can change this perception is by offering remote delivery and pickup for service customers. Consumers would prefer people to come to them rather than taking time out of their day to drop off their vehicle and arrange transportation, even if it’s just around the corner. Not only would remote delivery and pickup trump many independent shops and dealer competitors, but would also disrupt mobile repair disruption.
7. Measure your service marketing results
What is the purpose of investing in online marketing for your fixed ops department if you can’t measure the results or make sense of Google Analytics data? In this article written by Brian Pasch on LinkedIn Pulse, he highlights the value of using VistaDash, his reporting dashboard built for dealers, to easily measure how well various service website pages are performing. The service traffic is broken out by page content (Parts Center, Service Center, Car Repair, and Oil Change) within the page views section. Dealers are also able to dig into performance metrics including how many visitors land on service pages from search engines and how many complete the forms, “Form Completion Rate” (FCR).
If your dealership doesn’t have the bandwidth to dig through Google Analytics, VistaDash is a great alternative for quickly analyzing the performance of your service marketing, and other digital marketing initiatives, to help refine your strategy and maximize ROI. Read the article
If your dealership can prove to consumers that your fixed ops are superior to an independent shop, and make the experience more convenient and enjoyable, you will realize much greater retention and loyalty from your customers. Use of technology will help create a modern experience that meets consumer expectations and makes your service department more desirable. Take advantage of these tactics if you aren’t already!