July 17, 2018
The profit centers in a dealership can be divided into variable operations and fixed operations. Variable operations usually refer to car sales, which have a lot of volatile variables. Fixed operations, on the other hand, are much more steady. At a dealership, fixed operations is a description for part sales and car services.
If you follow your dealership’s financials, it’s no surprise that far more revenue comes in through variable operations. But if you look at the actual profit, around half of a dealership’s profit comes through fixed operations. A study from the National Auto Dealers Association shows that profits are up from parts and services for light-vehicle dealerships. About a third of them added another bay in the past 18 months to capture more revenue.
What does this mean for your marketing? It means that if you’re just trying to sell cars, but not selling parts and services, you’re losing on a ton of potential profit. Cultivating a long-term relationship with customers after a sale is the key to maximizing their lifetime value. That’s done in the service shop, not in the showroom. Here are some things you can do to improve your fixed ops marketing.
Connect Sales and Service
After a successful sale, there is a lot of goodwill for the salesperson. Salespersons should capitalize on this by offering to introduce a member of the service staff to the new owner. This lets the owner put a name and a face to your dealership’s service department. Car owners can feel like your showroom and your service are two entirely different businesses. Break that down where you can.
Build Service Webpages
You would be surprised how many dealerships have nothing about their fixed ops on their websites. It’s all about selling cars, not service. At best, there might be a number to call to schedule an appointment. Dealerships can do far better. Build information pages about your parts and services division, then develop them. Add a scheduling service button so customers can see availability. Talk about what you do for different services. Show them videos of you at work.
You have to fight to overcome the perception that many people have about service centers. That they’re just there to suck as much money as possible from car owners. You know that’s not the case, but you have to prove it. Your service webpages are a great place to start.
If you are using email marketing, are you adding anything to promote your fixed operations? Email marketing is a great place to sneak in coupons for services. This gives people incentive to stay on your mailing list and receive more offers. You can also create personalized emails to remind customers of service inspections. You can base these off the average number of miles people drive or off the last odometer reading. Whatever works best for you!
If you do these things, your service center stops being this unfriendly place they only see when their car is broken. It becomes a place where their cars can stay in top condition. And since you’re a dealership, you can do that better than any independent service center. Fold these tactics into your marketing and you have a good chance of beating your previous profit records.