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Bill Wittenmyer

Bill Wittenmyer VP Sales, Layered Apps & Competitive Accounts

Exclusive Blog Posts

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That Knocking Sound in Your Service Department is Opportunity

We've all heard the forecasts: new vehicle sales are slowing, and the latest predictions for 2018 are that sales may drop to 16.7 million vs. an estimated SAAR of 17.1 million this year. 

 

I suppose weakening demand could be interpreted as bad news, but a 2.3 percent drop in sales is hardly going to cause any dealers to tighten their belts. Still, if your business isn't growing, it's shrinking, and who wants shrinkage? If you're not growing and defending market share, someone else is. 

 

The good news is you don't have to rely on new vehicle sales demand to grow your business. Do me a favor and walk over to your service department. Stand there and listen for a moment. That knocking sound you hear is opportunity. 

 

In fact, right now there's a 'perfect storm' of opportunities converging right above your service lane. Dealerships ready to take advantage of these opportunities will continue growing both their service and sales profits even if overall demand stays soft. Let's examine these opportunities. 

 

Opportunity #1: Average age of vehicles is increasing 

Although consumers have been buying new cars at a record pace for the last couple years, the average age of vehicles on the road is 11.5 years. This may seem counter-intuitive, but people are either hanging onto their old cars or selling them to someone else who continues to drive that car. 

 

The problem with new cars is they don't need to be serviced nearly as often as they used to. I take my car in for an oil change once a year. The real opportunity lies in servicing the older cars. Right now, independent repair shops pretty much own this market. For dealers, that means there's a lot of room to grow market share. 

 

As new car sales slow, I hope to see dealers shift marketing dollars and emphasis away from new inventory and towards service and promoting a better customer experience.  

 

Opportunity #2: Increased profitability 

Many dealerships are able to leverage technology solutions to streamline processes, increase customer satisfaction and maximize profit margins for every job. Implementing a time-saving process like mobile check-in allows you to be a little more price competitive with independent repair shops. Technology also helps your employees be more consistent with processes such as multi-point inspections (MPIs), ensuring that you don't miss any upsell opportunities.  

 

Perhaps most important, technology allows you to communicate to your customers all the benefits of getting their cars serviced at your dealership. Price isn't always the deciding factor. Some people are willing to pay a little more for expertise and an awesome experience. It's up to your dealership to provide those things.  

 

From my personal observations, many dealerships have a lot of room for growth when it comes to leveraging technology to maximize shop efficiency and profits.  

 

Opportunity #3: Customer volume 

On any given day a dealership sees way more customers in its service lane than it does in its showroom. Some dealerships are doing a great job in nurturing these service relationships. They use exchange or trade-up programs, along with equity mining tools to identify and convert service customers into sales customers. 

 

Auto manufacturers certainly recognize this opportunity. They are starting to spend a lot more money on digital marketing programs designed to push customers back to franchise dealers for their service needs.  

 

However, most dealerships have a lot of room for improvement in this area. Is your dealership doing everything it can to proactively seek out more service business, provide a better experience to your customers and convert your service customers into sales customers?  

 

All of these opportunities are real and happening right now. Is your service department ready to take advantage? They say that once-in-a-lifetime opportunities don't come along every day. As a dealer, don't waste this 'perfect storm' of opportunities by doing things the same old way, and expect to get better results. 

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