AUTOMOTIVE ADVERTISING & MARKETING

Regaining Lost Service Customers

Regaining Lost Service Customers

JKRAdvertising / Automotive Advertising Advice /

October 19, 2017

A very large percentage of service customers from just about every dealership selling new cars will ultimately take their business to independent repair facilities. This is a very rampant issue among new-car dealers, regardless of the city or state in which your dealership resides. There is seemingly a “corner garage” on every corner these days and they’re all looking to take business from you.

A recent study conducted by Ward’s Auto showed that about three-quarters of the time, service customers are taking their repair and maintenance issues to third-party mechanics. This is a big number and it’s our sincere hope that figure is lower for your particular dealership – especially when statistics show that 53% of a dealership’s average daily gross profit is a direct result of the service department.

With this in mind, stop for a minute and imagine what it would do to your bottom line to lower that 75% figure to say, 50%. It almost gives you chills, doesn’t it!

Service Customers for Life

There … we’ve presented the problem. Now what’s the solution? The most logical step is to begin, well, from the very beginning – specifically, at the time of the sale. It’s at this point when you have a tremendous opportunity to show the customer your service department, let them meet your service personnel and instill in them how important it is to have their just-purchased vehicle maintained by factory-trained technicians. Offer them specials and discounts. See if you can get them to schedule their first oil change on this day. In short, do everything within your power to get the customer used to bringing their car to your dealership.

Then, of course, once you’ve hooked them, it’s up to you and your staff to meet and exceed their expectations.

Over time, you’ll improve on your current number if you make a concerted effort to giving your service customers every reason to come to – and come back to – your dealership for all their automobile maintenance needs.

JKR Automotive Advertising: We Move Cars.

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Post-Pandemic Dealer Gross Profits are Down – But They Don’t Have to Stay There!
March 13, 2024
It is no secret that dealer gross profits per vehicle are down sharply in the post-COVID automotive world. According to a recent article in Automotive News, gross profits of the six largest publicly traded dealership groups plunged significantly from Q4 2022 to Q4 2023. One of them was actually down 35% per vehicle!

The article explains: High interest rates, more expensive vehicles and a steadier post-pandemic supply chain continue to soften demand and bring it closer to pre-pandemic levels. Still, new-car buying has remained strong overall …

This means that, while sales volume is similar, overall bottom lines are lower for many dealers due to the reduced gross profits. What about your dealership?

Being Realistic
It’s time to turn the page! The time for dealers to simply be order takers for people willing to pay MSRP for a vehicle (and in some cases more) has passed and dealers have to work hard once again to achieve acceptable gross profits.

Selling a high volume of cars doesn’t control gross profits, no matter how much you wish this was the case. Correct processes and menu pricing – and strict adherence to them – do!

What kind of processes?
∙ Slow down the transaction! Your sales staff has to once again sell the customer on the features and benefits of every new and pre-owned vehicle on your lot.

∙ Your salespeople and managers should devalue the customers’ trade-in value (politely, of course) as much as possible. After all, if the customer expects you to lower your price, shouldn’t you be able to do the same on their trade? Remember, you’ll have to fix it up, put your name on it and resell it to someone else with all the tenacity you would a brand-new car. So make sure you buy it right … because the profit is made when you buy it, not when you sell it!

∙ To that end, management should be ready and willing to leave the desk and do thorough walk-arounds on each trade to ensure the best outcome for the dealership.

The Cure for Low Gross Profits
If you are like a lot of dealers these days, you could use some good news. Here it is: while you may not have the capability to achieve profit margins similar to those you enjoyed during the pandemic, they could likely be improved. JKR’s clients enjoy the benefit of attracting not only more customers, but better ones, too!

If meeting and exceeding your sales goals (and increasing gross profits at the same time) sounds great to you, you need to call us. Don’t settle for reduced gross profits when help is out there to get you closer to where you’d like to be.

Want to know how we do it? Reach out to Senior Partner Richard Brauns (407) 701-4233 or Partner/Vice President Jon Albert (407) 718-2494 today.

JKR Automotive Advertising: We Move Cars.

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