The weather gets hotter and the air fills with the sounds of Little Leagues across the nation. Coaches try to give their players advice that will last them the rest of their lives. “Keep your eye on the ball” is one such pointer. In the automotive market today, we are in the ninth inning with two outs and the count is three balls and two strikes. It is time to keep your eye on the ball, or in this case, on your units in operation (UIO).
The diminishing UIO is a particularly interesting indicator because it tends to first affect the service department. If your service department is hurting, then it’s like using a cracked bat when you come up to the plate. We all know the secret is out—the backend is profitable. But service departments are panicking now because their core base of customers (those who have vehicles within warranty that are younger than three years) has been dwindling for about 18 months or so, depending on which market they are located.
Do the math with these national trend numbers:
- Number of vehicles in your database – 10,000
- Number that leave per year – 2,000 or about 20%
- New units sold every year – 1,300
- New service customers every year – 700
- 30% decrease in sales over 12 months – 390 units
- Lost service sales potential sustained over 18 months – OUCH
