It is no secret that the service department tends to get the smallest part of the dealership’s marketing budget, despite bringing in the most revenue. Some dealers take this for granted with marketing dollars focused on sales. I get it – dealerships originally served as a critical, local arm of the OEM’s distribution of new models. However, due to the pandemic, we are in extraordinary times, offering dealers an opportunity to explode service department revenue.
In down markets, many dealers tend to cut marketing budgets. Interestingly, one dealer recently featured in an article in Automotive News did quite the opposite and increased the dealership’s marketing budget. This resulted in it taking the #1 spot in the region and #5 in the United States.
My suggestion is that you translate this strategy into fixed ops. Service revenue can increase simply by the change in consumer behavior during this pandemic. One of the most frequent objections to service recommendations and recall repair is that the customer cannot be without their vehicle for an extended period. Currently, due to the pandemic, many people are not commuting but are working from home. Kids are doing distance learning at home, so parents do not need to drive them to school. The same goes for soccer practice, and the multitude of activities consumers need their vehicles for. Consequently, they are probably more willing to give up their vehicles to get that work done or recall repairs they have been putting off.
While the customer may not need a new vehicle right now, their vehicle still needs regular maintenance and any needed recall work. This pandemic allows dealers to receive a “yes” more frequently than a “no” when presenting service recommendations or recall repairs. In addition to increasing service revenue, you can still get sales opportunities through a service-to-sales program.
My point is that if you focus your entire marketing efforts on sales, you might be missing out on a lot of revenue that is pretty easy to acquire. It could even be as simple as reviewing service recommendation and recall repair declines from existing customers over a while and reaching out to them. For example, according to the Automotive News article, the first commercials the dealership ran were not about pricing or payments, but rather that the dealership was there for the customer.
Why not introduce some service marketing into your budget to target those customers in your PMA? While other dealerships are cutting their budgets, this is the perfect time to increase market share, boost revenue and even acquire new customers – all simply by reaching out to customers with messages that are not just, “We’re here for you” for vehicle sales, but also “We want to make sure your vehicle is safe.”
You may want to think twice about passing on this unique opportunity. Nobody knows how long this window will last. But those dealerships that are aggressive in both sales and service marketing will probably find they increase volume and sales and service revenue. And on top of that, reaching out to owners of vehicles affected by a recall will probably be a very appealing gesture to those consumers who perhaps felt abandoned by a competitive dealer. Also, note that recalls cannot be repaired by independent repair shops. Customer acquisition is what leads to loyalty. The trick is getting them in for service. The rest is easy.