Promote Your Auto Dealership Service Business
Apply These 5 Ideas – They Are Not Hard
The Goal: 100% Service Absorption
The holy grail of dealership profitability, 100+% Service Absorption, has been an elusive target for most dealerships. In today’s business climate, dealerships need profitable service departments. It isn’t a nice bonus anymore – it is a necessity for survival.
If your dealership has a low absorption percentage for the service area then your dealership is vulnerable to a downturn in sales. If your service absorption is low then you need to make up for this low figure by pushing profits from Sales. To be too pushy in this area may give your dealership a poor reputation which then contributes to even lower performance. To depend too much on profit from sales is a big handicap.
To have a high-performance dealership you need to generate high profits from your service shop. Here are some key factors:
A Management Mindset to Reach (to reach or exceed 100% service absorption)
If management is not ready to rock and roll with the car service department then don’t expect your employees to be ready (or do much). If you are a manager then you need to show that you are committed to doing what it takes to make the car service area shine – walk the talk!
Treat your employees as people who are smart and who want to make a difference. Make sure that everyone knows the status and understand the why and how of the objective.
A Marketing Plan for Service (more on this later)
A business will have a marketing plan and budget for car sales and a dealership needs to have a clear marketing plan for the service department.
Marketing is often the key factor. Later on in this post will be some important ideas for you to consider if you want to boost up the volume and profitability of your service area.
This can help significantly. Have a program to retain customers and to generate repeat business. If someone defects learn to whom and why.
Also, you need to consider the negative aspects of low customer satisfaction. Negative customer perceptions are very much like a nasty virus. They are not restricted to service but are generously sprayed over all departments of the dealership. And, like Ebola, it’s spread orally. People talk and then they talk some more and this nasty virus continues to spread. You lose your customer and you build negative perceptions in your area. You do not retain service customers and you miss your chance at a repeat car sale and the associated service cycle.
Keep expenses at the right levels and do the right things to control costs. For example if you try to reduce costs and this decreases customer satisfaction then you have reduced costs in the wrong place.
That which we measure we improve. Set up key performance metrics and stay on top of these key metrics. Make sure you measure the right things and don’t get bogged down with too much data. Use metrics that are easy to track and understand and that can relate strongly to actionable items.
Service Department Volume
I once ran a factory in Ireland and we always had our eye on costs. We needed to increase inventory turns without an increase in fixed costs. This was key to the success of the factory and it is a fundamental aspect of reaching 100% service absorption. Increase the volume through the service area without a significant increase in fixed cost (if any) to push up your absorption.
Cost Effective Processes
A focus on creating good processes and executing them consistently is important to increasing service volume without increasing expenses. Again, at the factory in Ireland we focused on increasing the capacity of the bottlenecks. I worked for a time at Mitsubishi Electric in Nagoya and they were intent on reducing factory bottlenecks and were experts at streamlining a process. This helped them to reduce costs and reduce errors – a powerful competition-beating combination.
What Does the Worlds Biggest Marketing Database Say?
Let’s study 4 Ford Vehicles in terms of search volume using the greatest marketing database in the history of man (Google). Let’s study the Ford Focus, Fusion, Mustang and Escape.
Below is a graph of Search Volume as a function of time. It was generated using the Google database. It shows the number of search quires for these four Ford Vehicles. We can conclude (at best) that the interest level based on search volume is flat. The market is not expanding. Therefore, we know that competition for sales is very competitive. All the dealerships are fighting to get the same customers.
Competition for customers in the auto repair industry is also very high. Even in the best of times people are looking for discounts and no one wants to suffer through a bad service experience. If the economy is shaky it raised the stakes even further.
Your competitors are online; and your customers are blocking spam, screening calls and fast-forwarding through commercials.
Below is a table showing the search volume for a set of terms in the month of November. We can clearly see that people are using the search engines to find auto repair solutions.
What can you do to break through these obstacles and get the attention of new customers?
First, let’s put possible action in the context of what has been done traditionally. Traditional methods included display ads, billboards, bus signs, radio spots and the tried and true Yellow Pages (Who uses the Yellow Pages these days?). Today, these paths are no longer effective yet they are still expensive. In today’s consumer environment people largely ignore paid advertising.
Therefore, are you going to spend thousands of dollars on “interruption” media like commercials and signage? The reality of today is that consumers go online first and respond more to credible content than they do to a display ads or sales pitches.
Here is a short video that shows a “breakup” between a Traditional Advertiser and a Modern Consumer. It isn’t pretty.
The Great New Auto Repair Shop Customer
You need to attract the modern customer. You need to do this without spending a fortune.
There’s still a place for print advertising, of course. You may find success with familiar items like coupon books or Pennysaver ads. However, when seeking new customers, it’s now wise to turn to new media.
Marketing Ideas for Today’s Auto Repair Shop Customer
It’s less expensive than traditional marketing and better as it is targeted (the key word is “TARGETED”). Online or Internet Marketing is much better than the traditional. It’s a new world.
Here are just a few ideas:
Use Your Blog!
You can post a series of meaningful car maintenance blogs or articles on your website blog. The expense would be low compared with the cost of a display ad or Yellow Pages listing. To use your blog is a great way to attract the search engines and engage customers. The more you attract the search engines the more they will send you targeted traffic.
Make a Video!
You can create a targeted, informative or entertaining video for a fraction of the cost of producing a TV commercial, and post it on your website (of blog) and YouTube. This is cost-effective advertising. Video content on your website or blog also attracts the search engines and engages customers. When the search engines send you visitors they tend to be a targeted visitors.
Claim Your Listings!
You need to claim all the places where your business can be presented if someone searches for it. Claim your listings and then enhance them. These listings (oroperly enhanced) can drive targeted traffic to your website.
Acquire In-Coming Links!
Get links into the service section of your website. Get links to the part of your blog that has article about the service department. It is well known that Google and the other major search engines look favorably on the pages in your website that have in-coming links. Many dealerships acquire links to their home page and acquire none for their service section. As a result the smaller dedicated service shops can outperform a larger dealership in search and acquire customers that could be going through the dealership service area.
Post interesting and valuable articles on your blog. Tips on how to save money would be popular with consumers. Project your expertise into the marketplace as people want to work and do business with experts.
Give you steady customer a “heads-up” on new offerings and even provide them with regular specials.
Never forget your current customers.
Expanding your customer base is always a great idea, but in your rush to convert newcomers, remember the folks who got you where you are today. Court them with maintenance offers, open house opportunities or specially reserved hours.
Invite them to lunch or dinner, and create a focus group to find out what they think new customers would like and appreciate about your dealership and service shop. (That’s right—your past customers can help you reach out to your new ones!)
Repeat business is a lifeline for your service department, and in addition to the word of mouth they might spread to their friends and family, satisfied customers can also provide testimonials for your website or social network.
Handled unwisely, automotive repair can be a once-off type of business. However, with a little wise planning, some effort and a little money you can attract and keep loyal customers for a lifetime and get referrals from them too!