How the Service Drive Supports Dealership Profitability Across Departments

As ongoing inventory shortages continue to limit the number of vehicles on dealerships lots, many are taking the opportunity to reassess how they achieve sustainable success.

According to a recent survey by CDK Global and NADA, 86% of dealership respondents plan on continuing to focus on customer experience despite inventory shortages – and 94% are reevaluating their sales processes with an eye on the future.

Regularly found to be a critical factor in dealership customer satisfaction, many dealers have looked to their service department to improve their approach.

Supporting an excellent customer experience is only one role the service department fills inside the dealership. Customer loyalty and pre-owned vehicle acquisitions also serve as key contributors to sales revenue .

In this blog post, we’ll explore how the service drive supports dealership profitability across departments and tips for refining your automotive service department approach including:

·   Supporting future sales efforts

·   Retaining with loyalty customers

·   Driving success in the F&I department

Supporting Future Sales Efforts

The service department is having a moment in the spotlight, thanks in large part to the lack of new inventory caused by COVID-19 restrictions, chip shortages and other supply chain problems. But outside the obvious example of generating revenue through service tickets to supplemental lost sales, the service drive supports dealership sales profitability during inventory shortages in other numerous ways.

For example, as production delays extend the wait for new vehicles to arrive, the service drive offers dealers a natural opportunity to identify and engage customers. Dealerships can look to the customers preparing to return to market before they need a new vehicle.

To stay ahead of vehicle delivery delays, these dealers are leveraging dealership marketing technology that integrates with data from their CRM and DMS. This technology allows dealers to identify and engage service customers who are approaching the end of their lease or finance term, or the end of their warranty. From here, service teams are able to engage customers before they start shopping around, setting expectations early and offering options such as pre-orders or reserved sales to expedite the sales process. 

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Working the Drive 101: How to Maximize Service Revenue

Using Mastermind to Support Future Sales

“The Service Department was once a ghost town for our sales staff and now, they’re fighting over who gets to stay out there and talk to that next opportunity that we know is coming in ahead of time,” says Scott Roland, General Manager of Naples INFINITI, whose team took a similar approach leveraging Mastermind.

To further support dealership sales efforts, some dealers are taking a similar approach to mining their upcoming service appointments for prospective trade or buy-back opportunities. These are the customers who are over their lease mileage or warranty, have declined repairs, or those with equity in their vehicle.

Using Mastermind, Chris Erxleben, General Sales Manager of Team Toyota of Langhorne in Pennsylvania says his team isn’t “just selling cars but also getting trades.”

“We were able to just schedule appointments just like normal, set them up to come in and see us and we bought their car,” said Chris when describing his service team’s process.

Promote Customer Loyalty

As aggressive offers from competitors tempt customers to shop around, it’s more important than ever that dealerships take a proactive approach at protecting their customer base. Thankfully, the service department offers a natural solution.

Whether or not these customers originally bought from your dealership, service customers present continuous opportunities for regular communication with your team. This keeps your dealership top-of-mind when it comes time for their next purchase. In fact, automotiveMastermind data finds that customers who service at a dealership are 2.5x more likely to purchase their next vehicle at that same dealer.

To proactively promote customer retention through the drive, look to dealership marketing tools to stay in contact with customers through conveniently timed service alerts. From here, task your service-to-sales team or a well-connected service BDC to maintain regular communication with these customers with a personalized approach.

Download the Whitepaper:
3-Step Guide to Protecting Your Dealership Loyalty Customer Base

Using the previously mentioned dealership marketing tools, instruct your team to take a data-driven approach to engaging service customers. Look for opportunities to leverage customer insights to personalize your messaging such as reminding customers of important service milestones – as well as why they trusted your dealership with their service in the first place.

Using Mastermind to Build Customer Loyalty

Taking a similar approach by utilizing Mastermind’s service conquest feature and predictive marketing campaigns, Janet Feliciano, Dealer Principal of Hyundai and Genesis of South Brunswick in NJ, and her team quickly pinpoint the service customers who are most likely to purchase a vehicle, including the key motivating factors behind their need to purchase.

“The service conquest has been great because we’re able to convert service customers that didn’t buy from here,” Janet says, “Our retention sales are up 50-60 cars a month and that is combined with service drive.”  Hyundai and Genesis of South Brunswick are also closing these retention sales at an impressive 70%.

Support F&I Success

With so much information at their fingertips, the service-to-sales team can look beyond the traditional silos of sales and service for additional opportunities to support profitability across the dealership.

As previously mentioned, by maintaining long term customer relationships, the dealership service drive is well-positioned to support future dealership sales. This same approach can help create an effective F&I ecosystem.

The concept is pretty simple: By introducing F&I topics earlier in the sales process, dealerships can make a stronger case for the value of these offerings instead of springing costly additions on customers at the end of a sale. By having these initial F&I discussions earlier, customers can factor in these considerations before their purchase, expediting and improving their future buying experience. 

Download the Whitepaper:
3-Step Guide for Dealership F&I Success Amid Inventory Shortages

Like the previously described processes, this approach requires teams to leverage dealership data to identify and engage service customers preparing to return to market in the coming months and engage them with relevant messaging that speaks to their unique needs.

Instead of treating F&I options as an “add on” at the end of a vehicle sale, look for natural opportunities to introduce F&I topics at relevant points in a buyer’s journey. The goal is to ultimately make F&I products more accessible for customers, presenting how these offerings could be valuable to them in a tactical and tailored way.

Despite ongoing inventory shortages, many forward-thinking dealers are using 2022 as an opportunity to take a proactive approach at sustaining their own success by reassessing their sales process.

While the service drive has long been known as a valuable source of dealership revenue, a well-connected service department supports improved profitability dealership-wide. By taking a data-driven approach to managing the service department, dealers are empowered to drive future sales while proactively protecting their customer base and building an efficient F&I ecosystem.