August 2017, Auto Dealer Today - WebXclusive
Educating customers, investing in the right technology, and offering online appointment-scheduling can help drive service visits and parts revenue. Photo by Julia Manzerova
The auto industry is just beginning to adjust to a post-peak SAAR reality. In this environment, some dealers may be tempted to put their faith in overall economic confidence and key projections pointing toward stronger auto sales beyond 2017. Regardless of whether consumer demand rebounds, dealers need to think beyond new car sales and growth and consider the service department’s potential to drive revenue and growth.
Untapped opportunity in the service department is abundant. With fewer than one in three service visits taking place at dealerships in the U.S., according to J.D. Power, dealers have a compelling opportunity to engage customers beyond the initial sale. Here are three ways to do exactly that:
1. Educate the Customer.
It is the dealer’s responsibility to educate and engage customers in all facets of the dealership, including service. According to the Cox Automotive 2017 Car Buyer Journey, less than half of new-car buyers and only one-fourth of used-car buyers are aware of the service capabilities available at the dealership at the time of purchase or lease.
Introducing customers to the service department not only results in a more positive experience, but also makes customers more likely to return for their service needs as well as when they are ready to purchase their next vehicle.
2. Invest in the Right Technology.
Customers today are looking for technology enhanced experiences that provide value, convenience, and trust. Investing in the right technology can help you deliver on all three throughout the customer journey.
Through the proper utilization of an integrated CRM, you can start connecting with customers before it’s time for service. The CRM should be used to book the first service appointment at the time of vehicle purchase. This approach creates a connected customer experience that will help grow customer loyalty and as a result drive fixed ops revenue by tying the experience together from the start.
3. Schedule Appointments Online.
Another vital service feature dealers should invest in to boost revenue is online scheduling capabilities. New Xtime research shows that 23% of online customers schedule their visits outside of the business hours of a dealership. If you don’t have online scheduling capabilities, these customers are likely lost to a competitor who does. By meeting customers where they are at the time they wish on their device of choice, you can deliver the flexibility and convenience that customers desire and that your dealership will benefit from.
For dealers implementing online scheduling, education is once again critical to getting your customers to utilize it. A Cox Automotive report found that while 76% of customers who scheduled service appointments online would be willing to do so again, 45% of customers are not taking advantage of online scheduling because they did not know it was an option. By simply enhancing communication efforts, you can set the stage for service department growth.
The bottom line for dealers in this post-peak SAAR environment comes down to creating a seamless customer experience that transcends the point of purchase. Re-engaging customers beyond the initial sale through superior communication and innovative technology will allow for a more simplified, convenient, and connected experience, ultimately driving retention and revenue on both sides of the dealership. In a challenging sales environment, now is the time for dealers capitalize on the white space in the service department.
Jim Roche is senior vice president of marketing and managed services for Xtime (div. Cox Automotive). Email him at [email protected].