In today’s increasingly competitive automotive retail industry, dealerships are always seeking innovative ways to increase sales and reach new buyers. While traditional methods like showroom displays and online advertising remain essential to dealership success, there is an often-overlooked goldmine right under their noses: the service drive.
Wondering how to increase car sales with the service drive? The service department, often bustling with customers seeking vehicle maintenance and repairs, presents a unique opportunity for dealerships to tap into their existing customer portfolio for new sales potential.
Working the service drive efficiently and effectively has proven to be a game-changer for dealerships looking to reignite sales and solidify their success, especially for proactive dealers who take a data-driven approach to engaging their best service-to-sales opportunities.
By mining their service appointments for potential revenue opportunities and investing in the right tools, technology and team to support a targeted approach, dealerships can transform their drive into a powerful sales engine.
Why is the service drive increasingly important to dealerships’ profitability in 2023?
Even as dealership inventory levels are normalizing, more customers are being pushed to hold onto their vehicles longer, due to:
- Limited OEM incentives
- High sticker prices
- Rising interest rates
According to S&P Global Mobility, the average age of light vehicles on the road in the U.S. rose again in 2023 to 12.5 years, up by more than three months compared to 2022 and the highest yearly increase since the 2008 recession.
Dating back before inventory shortages and the pandemic, 2023 was the sixth straight year of increase in the average vehicle age of the U.S., according to S&P Global Mobility. And as customers hold onto their cars for longer periods, the demand for vehicle service and repair is inevitably rising.
The most recent S&P Global Channel Forecast conducted jointly with Auto Care Association and MEMA Aftermarket Suppliers estimates revenues of the U.S. light duty aftermarket grew to $356.5 billion in 2022, up more than 8.5% over 2021.
With the traditional “sweet spot” for aftermarket repair and service generally considered 6-11 years of age, dealers are being presented with a growing pipeline of potential revenue. By 2028, S&P Global Mobility estimates the volumes of vehicles ages 6-14 will grow by another 10 million units and will account for an estimated 74% of the vehicle fleet.
Beyond fueling service revenue, upcoming service appointments offer sales teams the opportunity to build customer loyalty and engage prospective buyers already planning to visit the dealership.
In order to truly capitalize on this growing opportunity, dealers must have a data-driven approach to identifying and engaging the right customers, not only those who need service but also those who present a strong inventory acquisition or future sale opportunity.
Best practices for maximizing profitability in the service department
A successful service-to-sales process relies on several key factors, such as:
- Understanding customer history and motivations
- Presenting the right offer at the right time
- Having dedicated personnel
- Maintaining consistency at every customer touchpoint
This requires dealers to take a targeted, data-driven approach, and your DMS only gives you a small piece of the story. Dealers need to leverage a combination of first and third-party data from their CRM, DMS, maturity manager, equity mining platform, sales platform and more to proactively identify and pre-qualify service-to-sales prospects.
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Having the right team is just as crucial to effectively working the service drive. Remember, what worked in the past won’t necessarily work now. By prioritizing transparency, personalization and convenience, dealerships can develop an effective service conquest strategy that meets the expectations of today’s buyers and drives success in the automotive industry.
Audit your dealership’s existing processes to look for opportunities to improve. Ask yourself:
● Would your team know if there was a great sales prospect in the service drive?
○ How? What’s their process for finding out?
○ Who’s leading that team?
○ Who’s in charge of identifying and converting those customers?
● How much does your team know about that customer?
○ What tools are you providing them to increase their knowledge and understanding of the customer?
○ What resources do they have to help structure the right offer and close the sale?
● How do you know if your team has the right people on it, doing the right things?
○ How do you know if sales and service are working together, rather than working in silos?
○ Did your conversion attempts build a stronger relationship with the customer?
○ Were you creating a positive or negative customer experience?
How to build an effective and efficient service-to-sales funnel
The dealership service drive not only offers dealers the opportunity to convert customers and nurture future buyers, it’s also critical to building customer loyalty. Mastermind data finds customers who service their vehicles at the dealership are 2.5 times more likely to purchase their next vehicle from the same retailer.
By actively investing in customer retention and loyalty efforts through the service drive, dealerships of every size can:
- Nurture relationships
- Boost customer satisfaction
- Increase the likelihood of those customers coming back
To engage loyal customers and qualified service-not-sold prospects alike, proactivity and personalization are key. Don’t just look at every upcoming service appointment in your dealership management software as a pending sales opportunity. Not every customer is a candidate, and this sort of approach can seriously affect your CSI.
Task your team to review service appointments ahead of time to identify and pre-qualify sales prospects such as those who are:
- Out of warranty
- Over lease mileage
- Experiencing a new product design
- Experiencing a decrease in payment
- Driving an in-demand used vehicle
To gauge customer interest ahead of their appointment, engage customers before they’re at the dealership with introductory messaging, such as offering a complimentary appraisal. Finally, don’t forget the follow up, especially for those customers interested in the appraisal but who don’t convert right away.
How can Mastermind help?
The Mastermind automated sales and marketing platform helps dealers create a sales pipeline right from their service drive by identifying and prioritizing in-market leads, providing customer insights on each buyer’s motivation and personalizing each sales offer to help motivate purchases.
Through a combination of turnkey predictive analytics, proactive marketing and dedicated consultative services, Mastermind uses targeted and personalized customer interactions to empower dealers to:
- Increase their revenue stream in the service drive
- Grow their loyalty portfolio
- Drive future new vehicle sales
Want to learn how Mastermind can help your dealership work the service drive to reignite your sales efforts? Contact us for a free demo.