While most still operated even amid lockdowns, dealership service drives weren’t immune to the challenges brought on by the pandemic. In one survey, 57.6% of dealerships and repair shops report an increase in the number of consumers deferring maintenance for their cars due to COVID-19.
Data from NADA’s 2020 mid-year report supports this, finding dealership service revenue decreased by 16%. However, average sales per repair order increased by 5.8%, meaning when customers did make it in, they were spending more.
With service revenue accounting for 12.5% of total dealership sales, this poses a massive opportunity for dealers to kickstart their service drive success in 2021 – if they can identify their best service prospects and engage them before the competition.
In this blog post, we share three ways dealerships can improve service drive marketing and maximize its impact by:
- Focusing on trade-in opportunities
- Using modern tools to stay ahead of customers
- Proactively promoting customer loyalty
Focus on Trade-In Opportunities
With inventory challenges forecasted to last through the first quarter and the number of consumers planning to purchase a vehicle dipping to its lowest levels since April, trade-in vehicles offer dealers a unique opportunity to supplement their pre-owned stock and engage customers who haven’t yet re-entered their buying journey.
This vehicle trade-in process starts by identifying drivers of in-demand makes and models who will likely qualify and respond to a trade-in offer and who are in a prime position to begin their buying journey. Equity mining tools only give you a fraction of the informational necessary to enable this.
By utilizing behavior prediction technology that integrates with a dealership’s CRM, DMS and inventory data, dealerships can automatically identify owners of in-demand vehicles.
When leveraged by a service liaison or a member of your BDC, these tools can be used to identify and engage service drive customers with highly profitable trade-ins who are scheduled to come in for service. To maximize the efficacy of this approach, dealers need to ensure their entire team is working in unison.
While this process will look slightly different at each dealership, there are a few best practices for your dealership’s trade-in process that apply, regardless of your team’s size and composition:
- Ensure each department is aware of which vehicles are in-demand and would be best to acquire.
- Contact customers ahead of their service visit by using tools that integrate with your dealership’s CRM, DMS and inventory data to predict which service customers are most likely to respond to a trade-in offer.
- Standardize reconditioning estimates by analyzing a vehicle’s maintenance history report to better predict costs before acquisition.
Use Modern Tools to Get Ahead of Service Drive Customers
Few elements are as critical to the success of a dealership’s marketing as getting ahead of customers before they start shopping around. This same principle applies to service drive marketing, with one survey from Google finding more than 40% of auto service shoppers need reactive versus routine maintenance.
This offers a massive opportunity for dealers who can proactively identify which of their customers will likely be needing service soon, and further, which are ready to begin shopping for the next vehicle. For this reason, service notifications are critical – and the format in which you send them matters. One industry study found 50% of customers prefer email communication and reminders from dealers between service visits, while 32% prefer texting and only 12% prefer calls.
Ensure your service reminders and offers are personalized for each customer – including any follow up communications. By using behavior prediction technology, dealers can take this approach even further by sending notifications at the exact right time and in the right format to maximize customer engagement in the service drive.
This same approach can be used to identify and engage service customers with upcoming appointments who predicted to be entering the sales cycle soon. With the right technology, dealers can analyze customer information in their databases against factors such as a customer’s behavior on their website, as well as financial and demographic data to identify prospective opportunities – and engage them with personalized offers before they start shopping around.
Focus on Retention
The value of focusing on customer retention while marketing your dealership’s service drive can’t be ignored. Not only do loyal service customers typically yield the highest profits, but promoting an excellent service experience can be a powerful force in driving future sales, with customers who service at the dealership being just over 2.5x more likely to purchase their subsequent vehicle from the same retailer.
Some dealerships have found success dedicating a team member to nurturing customer relationships by serving as a concierge between service and sales. Other dealers are finding efficiencies and opportunities in leveraging their BDC to promote customer retention, turning their role from reactive to proactive.
Whether as service concierge or an extension of your BDC, behavior prediction technology strengthens this approach by automatically identifying when high-value customers are about to be in-market, empowering your team to engage them with personalized messages before they’ve had the chance to defect.
Dealers taking this approach using Market EyeQ increase retention sales up to 15%, as well as activate up to 55% of their service drive customers into in-market leads, a 4x activation rate over industry standards.
To maximize the impact of their service drive and take control of their future success, dealers need to take a proactive approach to identifying and engaging their best service prospects. Reactive dealerships waiting for customers to eventually decide where and when it’s time to have their vehicle serviced are playing a game of chance with their profits – and ignoring the tremendous opportunities unlocked with a data-driven approach.
Interested in learning how Market EyeQ can strengthen your dealership’s service drive marketing efforts? Contact us for a free demo.