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Average service cycle expands from 140 to 145 days as Americans keep longer-lasting vehicles for more years than ever before; dealers must now market to the owner, not the vehicle
Daytona Beach, FL – September 4, 2013 – DMEautomotive (DMEa), the science-inspired, results-based automotive marketing leader, today released new findings from DMEInsights, its recently released analytics product, revealing that the average dealership’s auto service interval has undergone significant changes within the last year: increasing from 140 to 145 days - or nearly 4%.
DMEa found that this five-day expansion between service visits is costing the average dealership $91K in lost revenue a year – or $18K for every day of interval added. While these new realities impact dealerships and aftermarket providers alike, the total cost to U.S. franchised new car dealers alone is $352 million-plus each year. A number of factors - including people keeping vehicles longer than ever in history, far better built cars, people driving less, and people relying less on OEM service recommendations in favor of more online and mobile research - is fueling this ongoing lengthening of time between service visits.
“Service intervals will only get longer, and this should be a wake-up call for every dealer, because it impacts them in diverse, costly ways,” said Mike Walther, president and CEO of DMEautomotive. “Longer intervals don’t just mean a lot less direct service revenue, because when customers come in for fewer visits in the first three years of ownership (where brand and dealership loyalty is forged), they’re also less likely to re-purchase at that dealership…and even CSI scores are negatively impacted.”
Fueling the Trend:
Supporting DMEautomotive research’s findings are some macro auto industry realities:
“Many dealers use service reminder marketing programs that haven’t fundamentally changed in years. But the new, ever-lengthening service intervals are just further proof that it's now imperative for dealers to start marketing to the owner, and not to the vehicle,” said Walther. “The auto industry desperately needs to abandon the old ‘spray and pray’ approach of the old programs, and adopt a ‘new era’ service marketing approach that’s focused on total customer retention. That means delivering relevant, super-targeted messages based on each customer’s actual behavior and purchasing patterns, and doing a better job communicating where their customers increasingly live: across digital and mobile channels like mobile apps. That’s the way to reclaim those lost service dollars, increase loyalty and get more customers into the service drive, more often.”
DMEautomotive (DMEa) is the industry leader in science-based, results-driven automotive marketing, and provides turnkey marketing to the largest and most innovative automotive organizations, from automobile dealerships to many of the largest aftermarket companies in the U.S. DMEa's uniquely panoramic view of the complete automotive sales and service market, combined with its cutting-edge, science-based marketing programs, increases customer yield, conversion and retention.
DMEa does not take marketing performance on faith, and each product and service is measured by a simple, precise scientific approach: Is it true? Prove it. Will it work? Test it. Does it generate results? Show it! Supported by DMEa’s proprietary, cloud-based Red Rocket Technology Platform, the DMEa product suite includes science-based, data driven, multi-channel customer acquisition and retention marketing programs; best-in-class campaign reporting; data management and analytics; auto-focused Customer Interaction Center solutions, and complete on-site mail and email fulfillment services. Headquartered in Daytona Beach, Florida, DMEa also has major operations in Jacksonville, Florida.
Melanie Webber, mWEBB Communications, (424) 603-4340, firstname.lastname@example.org
Elizabeth Johnson, mWEBB Communications, (213) 713-4865, email@example.com
 Findings based on DMEautomotive’s Insights analytics tool and its Auto Insider Network (AIN), a network of dealerships within the top dealer groups that allows the company to aggregate/share their data.
 NADA data 2013, based on total number of US dealerships: 17,635
 Polk research, 2013
 Polk research, 2013
 U.S. Transportation Department study, 2012
 July 2013 DMEa consumer survey, with 1,966 respondents