Monday, April 17, 2017
When the back of the house is the front.
Margins are effectively gone in new car sales, margins on used are forecasted to follow the down trend as off-lease supply swells this year. So where else can a dealer drive profit when all front of The store sales methods are fading?
Answer: fixed operations.
Remember our past writing about the profit value of a "direct customer lead"?
Well good news there is also a sweet spot to target in fixed ops as well. NADA reports that a service appointment generates a 9% higher repair order.
Here are a few customer perceptions to remember when you begin to advertise your service department:
0. Some customers perceive dealers as being much more expensive than alternative auto service chains.
0. Other customers perceive it to be "more difficult" or complicated to get service from a dealer.
0. Further still some consumers perceives dealer service specials as bait and switch tactics.
In the past dealers have had a tendency to place service as a second priority over sales in terms of training and certainly advertising. When was the last time you saw an ad for a service special from a dealer compared to when you last saw an ad for Maaco, Aamco, Pep Boys, Midas, Tuffy, or Advanced Auto Parts?
Maybe you can change these perceptions if even for just your store. Advantages would also include capturing this customer at their vehicle lease end and also perhaps upgrading their add-on service plan.
Let's talk about advertising fixed ops. First off there are many new tools that make fixed op advertising effective and affordable. Timing and geographical focus are the key things to keep in mind.
Geo-marketing on smart phones to high value zip codes is a start. Imagine your $29 oil change popping up on someone's phone when they Google "Honda repair" or watch a YouTube video of the new 2018 Honda models.
Cost per Click should be second nature for you by now and if it isn't you can get help in this area and see immediate profits. Remember getting listed high up on the "organic" listing page is the mission. Some consumers go there first.
Preroll video (or those videos that play right before you watch something on YouTube are also effective. Remember you've got 4 seconds to grab a buyers' attention so get right to the value. Buyers watch ads!
When car sales are hot competitive auto service chains see sales increases. Why? I feel it's because OEM dealers get busy selling cars and subsequently market their service department with less or a priority. Meanwhile, the best way to retain a car sale customer is to keep them in your service bays long term for basic services.
Don't forget accessory sales at a
50% margin and a 50% conversion to a sale is a no brainer if you want to build profits.
How to get started? Have an audit of your fixed op profit services for top service lines in dollar value and market each as a special. Reach into your marketplace and make your store famous for simple services at a great value.
If you want fixed op growth get after it with advertising dollars with the tools mentioned above. Get quality professional advice. Market your most popular value driven services and consumers will respond with their money. Why let non-dealers fix your OEM product any more? Get in the game.
Adam Armbruster : Television advertising expert and commentator on TV/Digital/Mobile advertising media trends and how these affect consumers and businesses.
See video clips at: http://adamarmbrusterarchives.com/