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Richard Holland

Richard Holland Managing Director

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Using Data to Increase Service Revenue

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One of the most valuable assets you have at your dealership is your customer database. However, frequently dealers fail to effectively use this information to help achieve more specific marketing goals. While some may use their database to send marketing messages to existing and previous customers in an effort to sell another vehicle, or perhaps remind of a future service that is due, this is a very limited use. Sadly, many dealers fail to fully leverage this literal goldmine of information.

 

For example, using data segmentation to present products or services purchased by one set of customers to other customers with a similar profile. This is not a new idea, Amazon does this quite effectively. When a consumer visits many web pages, suggested products are prominently displayed that were purchased by other Amazon shoppers with similar buying or viewing habits.   Amazon’s suggestive marketing strategy is effectively playing the odds that, by leveraging a customer’s previous purchase history, along with those of consumers with similar shopping habits, the products being marketed will be of interest.

 

As a dealer, you can replicate this strategy through transactions analysis of specifically targeted customers. This intelligence can be accessed from your DMS, or through your loyalty program database, if you have one.  It is just waiting to be used.

 

As an example, let’s say a service director wants to increase upsell on a specific service. They could run reports that would identify commonalities amongst services and successful upsells. If the service director finds a large percentage of a specific upsell (say a radiator flush) was successful when it was made to a customer who came in for a different service (like an air conditioning tune-up), they could then mandate that every customer who comes in for an air conditioning tune-up is presented with the option of doing a radiator flush. It is more likely that you will see a better success rate by strategically narrowing in and targeting your customers in this way.

 

If done correctly, it should return better results than simply blanketing your entire customer base with the same upsell message every month. In addition, it can help retain your margins and increase the number of services performed, without being at the expense of net revenue.

 

It could be time well spent to learn how to effectively utilize all of the data available in your databases – CRM, DMS, loyalty programs, etc. – I am pretty sure you will find it helpful to effectively reach your marketing goals and drive more revenue opportunities. There’s a reason that Amazon and other retailers use these techniques - a very good one– it works!

Lauren Cummins
It's unreal how many dealers and service directors are making important decisions at their dealership based on gut instinct alone. If they really looked at the data, they would really get an idea of what's moving the needle, such as what advertising medium is working the best. Call tracking is a good way to track what's happening, because it can provide tracking of online web traffic and calls coming into the service department or sales department, beyond mere call counts. Usually the sales or service guys are fumbling important opportunities for business on the phone, so it's causing them to leak major profits! Thanks for the article, Richard!
Richard Holland
Thanks for the comment, Lauren!

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