DrivingSales
3 Areas to Target For Your First Fixed Ops Digital Marketing Spend
Over seventy percent of our customers perform research online prior to making a purchase decision. Forty percent will perform research online but purchased offline, and thirty percent will research online and then purchase online. Both of those segments bring two different opportunities for our service and part business.
For those that research online and then purchase offline are the hand raisers we are looking for. These customers are looking for more information online so they are educated and make the right decision when they visit the store. The biggest area of opportunity would be to target branded search terms such as Ford Taurus alternator or Nissan tires or Honda oil change.
Branded search term (BST) such as “Ford water pump” or “Honda timing belt” would help generate sales over the front parts counter. These customers might represent the do it yourselfer or backyard mechanic but what it really represents is the biggest opportunity for retail growth in parts. However, our competitor capitalizes on this opportunity eighty six percent of the time. These BST’s carry the largest query volume, there has been tremendous growth year over year and comparatively does not have a lot of competition in this space. The question is why are dealers only getting the click through fourteen percent of the time.
The next biggest area of opportunity would be to tackle the oil change BST. The bad news, our competitor seventy four percent of the time owns this. For someone looking for a Chevy oil change or Honda oil change online may be looking for service coupons or specials and will be directed to the Jiffy lube or Quick Lube corner store 3 out of 4 times. It looks like the competitor strategy is to spend heavily in this area as their information shows first most of the time in the ad space. One thing that I have noticed in this area is the dealer does have a presence on this page but they are not capitalizing or getting the click through, this inly happens seventeen percent of the time.
Finally the last BST that has the largest margin of deficit would be tires. When some one is looking for Honda tires the dealer will capture the click through thirty two percent of the time compared to the competitors’ sixty five percent of the time. Again there is a presence in this area from the dealer it just seems that the customer will pick the ad space prior to clicking the organic or natural non-paid ads.
In recap, the dealer does have presence organically on the search results page but the numbers indicate that they need to have presence in the ad space as well to capture our future business. The first 3 areas to start would be branded search terms for parts, tires and oil change. These terms have the largest difference of percentage of click capture between the dealer and the competitor.
CATEGORY |
BRAND |
3RD PARTY SELLER |
Parts |
14.06% |
85.92% |
Oil Change |
17.1% |
74.14% |
Tires |
32.57% |
65.01% |
It is not all bleak. The branded search term for battery, the dealer is capturing the click through forty five percent of the time compared to the competitors thirty nine percent. So for this term the dealer shows up organically and also within the ad section thanks to national presence in this area. Is this a roadmap for our future terms and a way to make up ground digitally, looks like it.
DrivingSales
Increase Your Revenue Per Customer by Increasing Their Lifetime Value
In the service drive, we constantly are discussing performance metrics that measure how much is being sold on average to every customer. Although, these metrics are very practical and serve a purpose to determine who is selling additional services and recommending needed repairs, they might not be telling you the whole story.
“On paper” I had one of the most impressive service advisors that I have worked with over the last 20 years. However, spending some time out on the service drive I began to think; is he building our business or building his wallet? This is a typical question that I’m sure most of us have struggled to answer at some point in time.
I received some feedback from one of the other advisors that I took into consideration and started my investigation. I listened to recorded calls; I reviewed the multi point inspections and I discussed the issue with some of the techs. Taking all of this information in I came to a conclusion.
My service writer sees value in the maintenance recommendations he is making! In addition he is selling the value of the service instead of just selling the service. Here was the most critical thing I found. There were several times that the customer was advised of a recommended repair. My advisor went through his typical sales approach, he explained the benefits of the OEM pad and then explained why we are recommending it being done now. In this case there was 2/32nds left on the brakes and after he went through his technique the customer said, “not at this time”. The next step he performed I quickly implemented into our follow up process. Once the customer said no, my advisor explained that he was going to set a future appointment to remind him to follow up with her about a month from now. At this time he set an actual appointment in the system and did a brief explanation of the reason for the appointment. As I was listening to the call I quickly checked the appointment log and sure enough the appointment was set in there.
I called my service advisor in to get more info. He explained that when he calls the customer back they have had some time to think and now are more willing to confirm an appointment. He said in most cases they were really surprised to see that he remembered to call them back.
This is how building a relationship first is critical; the increased sales will soon follow. When a customer has trust in your brand or in this case your personnel you will be able to build a strong loyal customer data base that is happy to spend at your store. Review your staff, inspect the process used to sell additional services, verify the inspections are complete and thorough, and make sure their follow up is personal. This basic process will build lifetime customers and help generate bottom line profit.
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DrivingSales
How Is Your Service Security? Car Stolen From Service Drive.
Recently I was visiting a dealership and watched the frantic pace of employees moving around going about their day. After only 3 months removed from a 22-year career inside of a dealership I was shocked about this frantic pace and it was an eye opening experience and reminded me of a tragic accident that happened early in my career.
When I was a service advisor I remember coming in after a weekend and a place that I usually turn on the lights and start the coffee is already a buzz. The service manager and senior leadership were already in closed-door meetings and it looked like there were a couple of detectives at the store as well. Of course everyone was wondering what had gone on. As we came to find out what used to be a normal activity or process in the dealership allowed a man to break into our store, steal a car and then be involved in an accident where an innocent bystander was injured.
At this store when a car came in for service the customer pulls right into the service drive that is directly connected to the shop. Quite often the technician would take the vehicle from the service drive and then pull it right into the service bay. On a late Saturday afternoon a vehicle came in the service drive and one of the technicians indicated he would look at it next and the advisor informed him it is carried over until Monday. End of business came and the store was locked down. During the weekend a man broke into the dealership found this car sitting on the service drive with keys in it, powered up the bay doors and then drove out. Unfortunately he created an incident that cased great harm to others. Fast forward several years and many depositions the dealer was held responsible for not having an adequate control process in place to prevent this from happening and ultimately settling on a multi million pay out to the family.
Millions of dollars were lost; people were hurt because of a bad process within the dealership. It still seems commonplace for a technician to leave the keys in a car that he is working on in his bay overnight or over the weekend. This is the same scenario that allowed a dishonest person cause harm and cost the dealership. Key control is important. Are your keys locked down when you are closed for business? Are there keys still being left in a car (in the shop) after hours? If so you are exposed for a possible theft that will cost your owner millions. In the saying “good fences make good neighbors” makes the case for a good end of day lock down process that removes keys from cars and secures them. In addition a solid securing and door locking procedure will help you build that fence to help prevent this opportunity for a criminal to strike on.
Point is, I know it is chaotic, there are a hundred things a service manager does on a daily basis to produce a profit, keep happy customers, make happy employees and grow the business but one slight of step in your process could cause a monumental disaster within the blink of an eye.
1 Comment
Eyewitness Surveillance
Processes can be annoying, but help prevent this sort of thing from happening. Several of my coworkers who used to work at dealerships have told me about some really horrendous key management protocols. I'm sorry this happened--hopefully others can learn from the mistakes.
DrivingSales
3 easy steps to improve your message to your customers
Today marketing to someone and getting through to them are 2 very different methods of operation.
Most everyone to this point has migrated their marketing campaigns to effectively reach out via Email / mail and phone to improve your ROI on your marketing spend. I want to discuss the next chapter of marketing and making sure your budget is effectively being used and driving more traffic to your store. In short if we are not delivering pertinent information at the correct time we will miss our window.
#1 – Go Mobile – make sure all of your Email marketing campaigns are mobile friendly so when they load on their smaller devise the user has an easy time to navigate the screen. If this is an inconvenience they simply wont wait the time it takes to load and then your message is not heard and then also possible dis-credited. The following statistics will show you the importance on needing to have your marketing events happening mobile friendly.
- Seventy nine percent of your customers view their Email on their smart phone.
- The latest information suggests that over half of your customers will then also make a purchase decision from their phone.
- Seventy percent of users that view their Email on their phone stated that the information they received influenced their buying behavior.
#2 – Build Value – One of my favorite authors and sales motivator Jeffrey Gitomer often states, “customers hate to be sold but they love to buy”. This statement rings true to me every time I am in front of a customer or creating the next marketing special.
- Build value in the special. There are many reasons you have to offer why your special is the best option for their vehicle, lets start talking about those very loudly.
- Talk about the importance and value of performing the special. Remind them that a detailed service history will allow them to sell their vehicle or trade their vehicle in with a higher value do to the maintenance being completed.
#3 – Quick / Clean - We all have received one of those emails and when you open it up you are stunned due to the amount of information or text you have to read though to determine if this email is of any value to you. Most of the time since this is being done on a mobile devise a clear visual message will be most effective.
- Make the subject line message short and brief
- Add links within the message to take your customers to micro MOBILE READY sites to give them more information.
- Make it visually clear and simple.
So here are 3 easy rules to make sure your marketing efforts are more effective in getting through to the on the go customer. Make it clear and easy, create value and ensure your customer will be able to view your information while standing in line at the grocery store.
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DrivingSales
Want to kill it in customer retention? Build a Quick Lube.
I recently spoke with Jon Lancaster, a “retired” dealer out of the Midwest. He sold his Toyota dealership to Penske Automotive Group, Inc. (PAG) in 2012. At the time of sale, the dealership was in the top 5 for customer service retention in the United States.
How did he get there? Jon’s unequivocal explanation is that he got in the quick lube business.
In the early 2000s, Jon attended a dealer conference that exposed some surprising findings about the service department in the eyes of the customer. The facts were simple. According to the study, dealerships were losing 75 percent of customers due to convenience and satisfaction. Convenience issues uncovered two major problems: quick lubes were more convenient and customers want service on Saturdays. The findings went on to outline how repurchase rate improves with each service visit.
When he saw the effects it could have on the entire operation, Jon started by educating himself on the quick lube business model. He joined associations for quick lubes, got franchising information to understand value and profit, and then built facilities for Jon Lancaster Toyota.
The value proposition was very specific. The quick service facility needed 15 minutes and $39.99 to change oil and filter, rotate tires, and perform a 21-point safety inspection. The added bonus: a free car wash. Saturday was treated exactly like a weekday with unabbreviated service hours.
Jon didn’t sacrifice profit to see his business in a new way. While a normal service department works around 51% service labor and parts margin, a quick lube runs around 50%. The business model incorporated some “give-aways” but they played a very calculated role in building rapport and opening the door for larger ticket items.
Once the quick lube was rolling Jon profit-centered his used oil (sold to asphalt companies in the summer and heated the facility in the winter), got in the discount tire business to drive wheel balance and alignment sales, and committed to “attacking the garage.” In other words, technicians took on any make or model to keep a family’s service business within the dealership.
When you look at your business in the eyes of the customer the solutions aren’t that difficult. Making those solutions profitable requires a bit of creativity.
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DrivingSales
The Add On - Impact of Selling Accessories
Looking for a little more gross? How about looking toward a $40B industry. A few of the latest reports show that the accessory industry is on the climb. Close to 9 out of 10 people
that purchase a vehicle will add an accessory within the next 90 days. Over sixty percent will spend over $1500 on average. This all seems good right? Everyone would like to have a little something that makes their vehicle look and feel the way they like it.
Coming from a store where we built a quarter of a million dollar display and outfitted trucks with $8,000 to $10,000 of lifts, wheels and tires all the way to another store where an all season protection package was a big ticket. In short accessories is a mindset. The stores that sell accessories typically have someone that loves them and works hard to offer what is hot in the industry.
Mostly this takes the GM saying this is the way we are going to do business and everyone has to be on the same page.
Most of our OEM’s have come to market with a decent list of add-ons and actually most of them have created a decent profit margin for parts and labor for the simple bolt on and drop in items. Floor mats continue to be the most common add on however in some regions tint has taken over this as the most common add on item.
Here is a very likely scenario for a store that has decided to install tint and shield. This not a high volume sales store and they very much fall in the mid-size dealer segment. They promoted one of their lot techs to install tint and shield. Trained him for 30 days and then set out to sell 100 tints and 25 shields. They had the approval from the GM to spiff the salesman and service writers. In their first month they sold 66 tints and 22 shields. Figuring they sell tint for $150 and have a cost of materials and labor of $55 they make $95 gross per tint. On shield they sell it for $450 and have a cost of $210 for labor and materials they make $240 in GP. In this particular month they created an additional $11500 in gross, not bad right. They soon found out they needed to hire and train another installer.
Keep in mind these results did not happen by chance. They had the dealership on board and spent nearly $1700 in spiffs but they gained $11500. When I asked how this worked out so well the reply from the service director was, “my GM was pushing the process and made sure everyone knew how much he liked the tint and shield business”. Well for a net of close to 10K I bet he liked it even more.
1 Comment
Spork Marketing, LLC
Tint and clear bras are a great source of profitable accessory sales, especially on new (or "new to me") cars. That's a great, actionable tip. Some accessory sales that I've seen work well for dealers and independent accessory shops: - Exhaust systems. This is an extraordinarily popular add-on for most truck owners, and it's easy-peasy to install a cat-back system on a new truck (no grime or rust, bolts to factory hangers). A lube tech could easily handle this with a little training. Axle-back systems are popular on coupes as well. - Tonneau covers. Another popular truck add-on, install is easy for anyone (technician or otherwise). - Lighting upgrades, from adding fog lights to vehicles that don't have them to adding on after-market systems. LEDs are incredibly popular right now, and the mark-up is decent on the quality LED systems (which is all any dealer should offer...the cheap stuff is a CSI problem waiting to happen). Install ranges from easy to difficult, but the harder it is, the more likely the customer is to pay a dealer to do it. The "trick" to all of the above is to offer more than just the factory's accessory brand. You don't want to only offer the Ford Racing (or whatever) exhaust system, tonneau, etc. You also want to be able to offer Borla, Magnaflow, Flowmaster, Corsa, AND the factory's designated system. Be sure to sell them for the same price a customer can find them online...most pricing today is determined by a MAP policy, which means the markup is decent. The cool part about offering all of the above is that you don't have to carry any inventory - most distributors will be happy to drop ship the parts to your dealership. As you say, accessories are a $40billion dollar a year industry. Truck owners in particular spend a big chunk of these dollars on bed liners, exhausts, tonneaus, lift kits, wheels and tires, etc. There's absolutely no reason for dealers to sit on the sidelines in this business.
DrivingSales
70 Million Automotive Repair Searches
While you are sitting there enjoying a strong finish to the end of a great month and want to have a little shock or a serious reality check try this – grab the nearest device and perform a search. If you are a Honda store type “Honda tires” or if you are a Nissan store type “Nissan brakes” and your potential customer should be directed right to your site where they can find out how much a set of tires are or how much it will cost to have a set of factory brake pads installed. Once your customer knows the cost and estimated time to complete the service, they will be able to set an appointment online at their earliest convenience and come see you.
If this happens, realize you are in the minority. Unfortunately when the majority performs this search, the aftermarket owns the first non-sponsored search results that come up. The aftermarket is out performing us in this area. Our customers have more exposure to their products and services digitally, and therefore have a greater opportunity to do more commerce.
Here is the scary part … the latest numbers show 65% to 70% of people will do research online before doing business anywhere. First, we need to identify where our greatest opportunity is. In this case as it pertains to automotive service and repairs there are two types of searches: a branded search and a non-branded search. A branded search example such as “Ford wipers” or “Dodge tires” is the area we need to concentrate our efforts. This type of search represents close to 20% of the total searches made, but we own less than 1% of the business.
All of our websites need to have more content. In short, SEO is about creating high value; unique content and putting it on the Web in a way Google can find and value it. Also think about this, our websites need to be mobile friendly since the average person performs over 100 mobile searches daily. This way when someone is looking for “Ford Brakes” they will have the opportunity to do business with you.
Game plan, start with your in-house Internet Manager. For the last few years Owners and Dealers have lived in this area and have dedicated a lot of time and energy to make sure when someone is looking for a “Ford truck” their dealership pops up first. Once you have found your Internet Manager behind his 60” screen and super computer ask them how much time of their day is dedicated toward the sales department and how much of their time is spent toward service. I would be shocked if any spend anytime with service at all and is really is not their fault. There is a lot to do for sales and typically their income is tied only to sales revenue.
We are in a time where Fixed Operations needs to have a digital presence more than ever. Dealership Internet Managers could lend their efforts to service so we can play in this world that has been owned by the aftermarket.
Today we are talking about 70M searches imagine what increase we can expect of the years to come. With that in consideration how big of a slice of that pie do you want?
13 Comments
Launch Digital Marketing
Couldn't agree more when it comes to the lack of love that fixed ops receives when it comes to digital marketing. However suggesting that it's up to the "Internet Manager" to be the person to address the issue is a bit short sighted. Ultimately the decision to peruse a fixed ops digital marketing strategy should come from the ownership / gm / operation director in collaboration with the fixed ops director / service managers to be planned and executed by the marketing team or yes...the overworked and under appreciated Internet Manager. The strategy needs to be intentional and have achievable goals. Having an Internet Manager start building dozens of random pages on their website to satisfy potential fixed ops related searches probably isn't the most efficient way to begin.
DrivingSales
Jason - you are right and heading exactly the direction I wanted this conversation to go. This is much bigger than the Internet Manager and the Service Manager this needs to be a store initiative with like you say intentional and achievable goals. Really the point of my topic is to get this collaboration to happen. As I see it the Internet Manager would need to oversee this undertaking and determine what it would take to be aggressive in the area due to their knowledge and expertise. Then with the buy in from DP's and GM's develop the game plan of who does what and what it will take to help improve the current performance. Jason thank you for your reply and spot on comments.
Xtime
I agree, this has always been an area lacking any attention. DP's and GM's need to start thinking like the owners of independent shops do, service is their only income. That type of urgency is what is missing. Franchise dealers know they will get a certain percentage of business from warranty, some loyalty, and people that just moved to the area. These are limited though, warranties expire, loyalty can be tested, and people become with other service options. If a DP or GM looked at service as the sole income line, they may address it in a more urgent sense and offer a more "service oriented" web presence.
Cobalt
Great article, Denim. I couldn't agree more. Dealers should own the maintenance and repair market. Compared to aftermarket chains, they deliver superior service and most are competitively prices. They just need to get the word out through digital marketing - the aftermarket chains dominate the SERP for maintenance terms. I recently came across a Car Dealer Insider article about dealers who achieve 100% service absorption...the common thread: they execute on a professional marketing plan.
BOB BELL AUTOMOTIVE
I think the topic here should shift to how does a local dealer influence online service shoppers to do business with them and not the big chain service stores. I agree that a sharp Web Presence Manager with good SEO skills can rank well for local service terms like Baltimore Nissan Service or Brakes. Take the "Baltimore" out and Its near impossible to out rank the big players in any service related search. In my opinion and experience we have to resort to a well planed, funded and executed PPC strategy and leverage Facebook targeted ads and dark posts to drive traffic to our service department. And lets not forget to educate the service shoppers that dealers service departments offer a great value over the one size fits all big chains that in the long and short run do not offer the value and expertise that most dealers service departments can. If we want our share of local service customers its time to think outside of the box to get their attention. You will be very frustrated if you think that any amount of content you create will out rank the big players but keep in mind that good relevant content on your sites will be of value to your services shoppers and Google.
DrivingSales
@BRUCE and @ALYSON these are great points and this is the direction our Fixed Operations need to go. We are at the precipice of this very topic. My thought is, our service departments need to carve out a portion of their current advertising budget and shift it to this. Guide for service is 3% to 3.5% of total gross income is budgeted for advertising. This is typically eaten up by archaic factory direct mail and the cost of coupons along with another non OEM product to help wrap or cover the remaining data base. SO with that in mind what kind of budget would it take to be aggressive in this segment and being mindful of the economic model that service is following how do we accomplish this. Thank you for all your input!!!
Sunnyside Toyota
Great article!!! You are absolutely right and I, for one, never thought about it. After reading the article I thought back to my interactions with the fixed ops.....There is not that much. Times are changing and we need to have our Parts and Service centers as digital as the front house.
Spork Marketing, LLC
In my opinion, there is a HUGE opportunity for dealers to sell parts online. However, there are some structural problems that most dealers need to address: 1. Most parts departments want to sell parts over the counter for MSRP + 10%. This practice is still very much hidden from the consumer, but times are changing. If a consumer checks dealer part pricing either a) online before they visit the dealership or b) standing in the service drive while they're looking at their repair quote, the consumer is probably going to feel cheated. I think consumers are absolutely willing to pay more for a part that's available right now, so I do not believe parts managers need to "drop their pants" to sell parts...but the days of retail + 10% are almost certainly numbered. Parts managers who fight that reality will struggle to be successful online. 2. Most service departments are focused on repairs rather than installs. I believe there's a massive market for "do it for me" accessory installation, either after-market or OEM. However, many service departments are setup to do expensive repair work, so they're not cost competitive with dedicated performance or off-road shops. A dealer might want 6 hours at $150 an hour to install a lift kit, while a local off-road shop might do a flat fee install of $499. Dealers can absolutely compete here - they can assign lower-level technicians to do part installs, and make consumers schedule installs instead of providing work on the old 'first come first serve' basis (as is their current process) - but it requires a new mindset at all levels. 3. Most of the "spec" websites provided to dealers by the major CMS providers (who shall remain nameless) simply aren't equipped to help parts and service departments sell their wares online. Parts departments need an honest-to-goodness ecommerce system, and service needs a robust system that integrates part information, install info, and provides quotes. We're probably a few years away from a comprehensive solution to this problem, but when it arrives I think it will be a boon to fixed ops. There's a lot of money to be made selling and installing accessories - all it takes is a desire to attack that market.
Roseville, Sacramento & Folsom Hyundai, Sac CDJR
I couldn't agree with this more. I have been in the automotive industry forever and can't remember the last time we talked about how the service department is being marketed online. I look forward to sharing more of this with my current employer to see what we can do to get more of the focus on SEO/PPC for the service department. I have already gone through and started making some improvements to the service pages on the websites, but there is a lot more work to do! Thank you for sharing!
DrivingSales
Hi Everyone thank you for a great conversation on a very important topic. We chose this topic for our community white board topic. Here is the link. https://www.youtube.com/watch?v=nKU-0nDeZ6Q
Callsavvy
This is a great topic to discuss. To me the main crux here for dealers is not just online marketing, PPC, SEO, although these are important channel in today's digital market, but how do you live interact with all these customers at the first point of contact. If we look at a dealership's internal support structure for receiving customer queries resulting from these digital interactions we will see that 99 percent of dealers do no offer any kind of a digital service desk (AKA the Service Internet Department). Most of these interactions that begin with a search that lead to a dealer's website end up generating a phone call into the service department. If your dealership has a inbound BDC setup then you got it somewhat covered, although costly, however if the call is coming into the service drive itself and being answered by a Service Advisor, who is juggling multiple tasks all at once then we can pretty much gues the results. Retentions and profits start at hello. The first impression is the last. So to summarize in agreeing with the post that yes we need to invest more resources in online marketing which may entail social, search, and PPC, but we also need to invest in setting up complimentary digital support structures to make sure that we get a solid return on all digital investment and no customer interaction ever goes to waste. It is high time for an Internet Service Desk.
Goderich Honda
Driving sales to the dealership is much easier than you think. We can send out more post cards, emails, follow up calls, print ads etc etc. not saying that we should stop this, but there is a much more effective and cost saving procedure that every dealership can do. It's called a "Service walk". Every customer that purchases a vehicle from the dealership MUST be introduced to the service manager. He/she will give the new customers a tour behind the scenes of the facility. Starting with the appointment process, menu board, advisor introductions, parts department tour, special electronics for diagnostics, introduce shop foreman and all techs noting their training and qualifications, special equipment (alignment machines, sand blasters, detail department, tire storage). Thank them for deciding on your dealership and ask them if they have any other vehicles in there family. We do off makes as well. We fortunately have over 90% retention with 85% repurchasing new vehicles. I'm not suggesting we don't advertise, we do that too, just don't rely to much on it. Get back to what our customers want. TRUST!!!!!!
DrivingSales
@doug really like the idea of getting back to the core value of TRUST. Those type of actions help customers see the "Black hole" that their car goes into and help them feel better about the service department. The service walk is key, unfortunately, I see less do it right than i see those who do it good. This might be a process issue, commitment level whatever the excuse is we all need to get beyond it because customers nationally are leaving at an accelerated rate after warranty time period expired. Im glad to hear your exceptional rate of retention that is top of the list. Great work!!
DrivingSales
Creating Customer Retention
I’d like to introduce myself to the DrivingSales community. My name is Denim Simkins and I have spent the last 22 years living with multiple dealerships performing every job possible on the service side, most recently as Fixed Ops Director at the Ken Garff group. This week I have joined the fast moving, forward thinking team at DrivingSales to champion fixed operations and the people at the core of every profitable dealership. At DrivingSales, I will be growing and facilitating a community filled with industry experts from within the dealership that want to address and discuss todays automotive issues that face Fixed Operations today.
I will not be shy in sharing my views on how we can advance our careers and the success of our dealerships. Taking a look at the challenges that face the service department today, it is clear to me that we need to elevate our sights from day-to-day operations to the strategic role of Fixed Ops in service retention and repurchase loyalty. Is there any other metric as critical to the health of a store than service retention? Not only is it the key to near term service profitability, it is highly correlated with the likelihood of that consumer buying their next car from your store. Shouldn’t this be one of the top 5 metrics every DP or GM uses to manage their business?
I am not the only one with this passion. This morning I talked with Greg Noonan, one of the organizers of The Insight15 Customer Loyalty and Retention Conference in Orlando next week (March 24-26). Greg shared that in 2014 there were 34M new and used vehicles sold, potentially generating 112M RO’s in our service drives. Here is the scary part – our competitors (the aftermarket) will own about 60% of those RO’s. They often out-execute us in marketing and promotion, especially in volume items like tires and batteries. This is not inevitable if we take an attitude of creating “customers for life." This conference is bringing leaders from across the industry to help dealers take the offense in delivering superior experiences and retaining customers. I plan to be there and hope to connect with others sharing this passion. If you would like to attend you can register at http://insightcustomerloyalty.com/ or reach out directly to Greg at gnoonan.cei@gmail.com.
6 Comments
CEI
Thank you DenimVery nice and appreciate you. Anyone wanting me to help them register I am happy to act as your personal concierge. Just e-mail me at gnoonan.cei@gmail.com or text me at 607-437-3061. I'll get back to you within minutes. I'm on EDT. When we look at NADA DATA for 2009 vs 2013 it is easy to see the memory of the recession is slipping away and the average dealers percentage of service is now at its lowest in 5 years while sales are at their highest. The worst we should see right now is that sales from service and parts should be at about $6,500,000 but they are at $4,789,000. There is no need to loose these $2,000,000 in sales or $166,000 per month for the average dealer especially considering the net profit contribution these sales make. If you look further at the average dealer spending $600 per new vehicle retailed doesn't it make sense that you can recover all advertising expense if you keep the customer in the service lane? And sell them a car on their 14 - 16 RO.The dealers are the experts so if any dealer or Fixed Ops Director wants to come to our conference and hash this out we have 40 sessions for you to state you case. Come on down and I'll escort you around the conference and intorduce you to any exhibitor or speaker you want. I bet you the cost of admission you leave Insight15 feeling pretty aggressive about your Customer Service plans and can't imagine you won't make thousands a month more just by coming.See you in Orlando and paste this into your browser and take a look at these phenomenal people presenting at Insight15. http://www.bluetoad.com/publication/?i=250202&p=1 Thank you, Greg
Founder - Sellchology Sales Training
Thanks for being part of the team and contributing your expertise!
Conicelli Autoplex
I would love to hear your thoughts on service BDC and some advise on starting one. We are planning on taking on this venture in 2016. Thank you, Lori Hammond
DrivingSales
What I see is that a dealer will start a BDC in effort to improve their service communications channels therefore improving service retention. However if not done correctly it could easily cause an adverse effect. The great news… the tools of the trade have improved so much your success in starting one today is far better than it used to be. There is a great deal you stand to gain from creating a BDC but before going into it I would make sure your surrounding team has discussed some of the “known” topics that you will face and have a action in place in how to handle them. Good luck, a service based BDC is the future of our business and plays a major role in creating long term loyal and active customers. In future articles I will be discussing BDC’s or as I like to call them SRC’s (service retention centers) and the role they play in todays market.
AutoStride
You should be using https://www.openbay.com as well, Google-backed. http://automd.com, etc. Openbay helps you fix your car without getting stressed or swindled
8 Comments
Mark Rask
Kelley Buick Gmc
We have tried to market to service customers from a digital standpoint and have had no success
Ron Morrison
PureInfluencer, LLC
I like the article and the attention to "digital service marketing." We've found that marketing intelligently "before the funnel" - literally before the customer begins a search and branding them with a significant call to action is making customers actually recognize more and even seek out a dealers digital service marketing. This strategy is producing significant results in the "Lost" segment of the database. Those customers that haven't had a service transaction in over a year.
Jim Boyer
DST Inc.
Interesting analysis. The facts are laid out clearly, and the conclusions and recommendations are consistent with the findings. Thanks for the valuable education on digital marketing for Fixed Ops!
Greg Noonan
CEI
Kind of a pedestrian comment but I'll make it anyway Denim. Regardless if a new, preowned or CPO, when we look at the cost of advertising per vehicle sold we have to stop leaving the customer at the alter. Get them, now, into the service department and never let them go. They are getting ready to write a check, they believe in you as a dealership, someone won them over. Now is the time to get them to know you want them for service for their first appointment and, well, you won't have to win the search as they are already yours, they won't search. We create our own problem by letting customers leave with their new purchased car and without the belief that we want them to be our customers for life. Surely if you can get them to spend between $17,000 and $33,000 you can keep them, right? Any dealers who wants a reference for the tens of companies I work with every month, who excell at customer loyalty and retention, just have them contact me at gnoonan.cei@gmail.com. We have proven, real life experiences that show where an individual dealer, or group, has made millions more dollars per year in service, by keeping them from the first sale, the sale of that car. I'm looking at one study right now where a 4 store dealer group picked up $500,000, in 6 months, in service business with a very fundamental change. We are spooling up for the next round of FCA service conferences and creating the Utlimate Customer Experience this time. If you are a FCA dealers I'd love to hear from you, send me your top 5 objectives for service. I keep all of this confidential. Consumers have to start to be branded on it's the best place, not just the best price. Franchised dealers America's Best Choice for Community Service. I unalterably believe this! Let's catch up again soon Denim. Greg
Megan Barto
Faulkner Nissan
Why spend money on digital marketing for fixed ops when you can spend less money & get better results with your own customer database?
Denim Simkins
DrivingSales
Megan - I am a firm believer that both need to happen in order to really saturate the market. Mining your own database is critical to keep customer active and informed but having a strong digital presence keeps your product front and center for those surfing during the commercials and check out stands.
Ron Morrison
PureInfluencer, LLC
You're all right... well sort of. ;) Taking care of the customer that you sold your vehicle too and doing everything possible to help them KNOW WITHOUT A DOUBT that you're there to take care of them, that you want to, and that you will is the most profitable strategy for fixed ops absorption, revenue, and retention. BUT... when, how often, and where you communicate is key. They WON'T KNOW, if they don't hear from or see you. Television isn't the answer, Direct Mail and email and facebook certainly aren't, and paid search for service search terms aren't either. So we've found a targeted marketing strategy that gets your message out early, often and unobtrusively to various segments in your database. Proactive, targeted, and relevant/variable display. Why... because that's where your customers' eyeballs are. They're online - all day everyday. All night every night. And we've found a unique strategy, tactic, and cadence to drive your messages. Proof, we're re-engaging customers that haven't been in the dealership in 1, 2, even 4 years. Hardest segment to re-activate. But when you communicate to them in a manner that they see/absorb that's where you get results. What kind, how about 300-500% ROI. I'm REALLY hoping that this doesn't sound like a sales pitch. REALLY but just thought that I'd answer the question from our experience. Get in-front of their eyeballs and watch the results roll in. I hope that helps.
Denim Simkins
DrivingSales
Greg - It great to hear from you, sounds like there are a lot of things going on, great work in helping fix our industry and waging war against our competitors. In the end when all of our franchised dealers are winning this battle we will all be better off. Your right setting the hook at time of sale talking to the customer and explaining how important they are and how much we want their business is critical. Loyalty is built on relationships not transactions. Building that relationship over a vehicle sale is very difficult, not impossible just difficult. This is not a new focus I would venture to guess that a fair part of the dealers across the nation has improved on some of the retention metrics such as their first visit percentage all the way to their ten year active customer database by improving internal procedures and simply recognizing that this has been a problem. This is still a very critical issue as there is enormous room for improvement as there is in most facets of the entire dealer operations. With that being said, what are we doing to go after the customer that purchased 3 years ago and has faded out of the system. How about the customer that lives in your backyard bought from a private seller and has not had the opportunity to meet our staff? When they are looking for answers they pull out their phone and start asking, this is the space that is killing us. We as dealers need have more presence in this area. Easier said than done and It really starts at the OEM level and allocation of advertising funds. Unfortunately fixed ops will only be able to really reach out to their existing customers and still be within budget of their expenses. Like I said not an easy fix but there are ways to improve and I simply suggest we all look at this as an opportunity to increase traffic in FO so when the next new and used vehicle downturn happens all of our dealers are sitting in a better place with more stability from fixed ops.