LAS VEGAS – Auto dealerships not only sell cars, they fix them. That seems obvious, but when it comes to effective marketing, the back shop often is in the background.
Dealers lose much service business after customers’ vehicle warranties expire. That’s because independent shops and national car-care centers are out-marketing dealerships, especially online, says Jack Simmons, a trainer for Cars.com, an online automotive marketplace.
It doesn’t have to be that way, and much money is at stake, he says. Vehicle-service is a $215 billion a year industry. It’s expected to reach $247 billion by 2017.
Dealerships lose 60% to 78% of customer service revenue for cars 3 to 6 years old. Revenue losses rise to as much as 92% for 7- to 8-year-old vehicles. Eighty-six percent of vehicles on the road today are out of warranty.
Consumers looking for auto-repair service usually use online search engines. Who shows up in the results listings? Usually not dealers. Instead, it’s local shops and national chains. They’re good at search-engine marketing and optimization.
“Dealers show up less than 5%,” Simmons says at the 2014 DrivingSales Executive Summit here. “That’s not very competitive. We don’t have much of a digital footprint. We do with sales, but not service.”
Nor are dealerships helping their cause by dedicating 95% of their website content to vehicle sales, with service getting what’s left.
“We’re giving 5% of our (online) real estate to one of our strongest profit centers,” he says, advocating greater website exposure of the parts and service departments.
Good news for dealership fixed operations is that “customers still give us consideration,” Simmons says. “So we have a fighting chance. But after the vehicle sale, what are we doing to retain the customer for service work?”
He recommends dealerships tout that they employ factory-trained and certified auto technicians. Competitors typically can’t say that.
Many customers are willing to pay extra if they know a master mechanic is fixing their cars, according to a Cars.com study. It says that when shoppers were provided more information about actual price ranges and quality of dealership work, many were willing to pay 10% to 15% more.
High price is the main reason survey participants cited for not considering a dealership for service work, even though dealers offer competitive prices, Simmons says.
He recommends ways dealers can offset such perceptions. “Price guarantees are a good idea. Post actual prices for basic services, showing prices are competitive and transparent.
“Remind customers of high-quality service, warranties and OEM parts. They want to know they are getting quality service and a fair price.”
Also on his to-do list for boosting service business is the garnering of online customer reviews. “These may be the most important piece. Build them up. They’re not nice to have, they’re necessary to have.”
Good service reviews also help showroom sales, he says “Two of three new car-buyers say service reviews influence their purchase decisions. No one says, ‘Let’s go to the lousiest place with the worst reviews.’”
His other tips on increasing service business:
- Optimize website content so it’s mobile-device friendly.
- Put processes in place to encourage customer reviews and build a service reputation.
- Stay current on industry trends and insights.