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CHALLENGE
It is harder than ever to generate the same revenue from parts and service customers. Vehicle quality has consistently increased over the last decade, and preventive maintenance needed for these models has been
reduced. Even oil changes have become less frequent-with the introduction of synthetic oil blends. The bottom line is that it is difficult to identify the right marketing plan to increase your service department's
gross profits and year- to-year sales. Where can we find a market opportunity to drive in customers?
APPROACH
Over the years, dealerships have emphasized new car sales and service. Some have forgotten the older model vehicles. What would be the result if we specifically targeted those older-year models, and how would that
affect the dealer's profitability? Perhaps service managers should rethink the paradigm of their primary market being the servicing of new vehicles. This shift in focus could boost the dealership's profitability
during more difficult economic times.
By increasing the scope of your promotion to include older models, you could bring in vehicles needing more service than vehicles half their age. Also, these older cars will need parts that are more expensive and require higher labor charges.
This combination will increase the average amount of the dealership's repair orders-making the dealership more profitable.
RESULTS...
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By Chuck Patton
Owner/CEO
2009 has arguably been the most unique and challenging year that service managers have ever seen. Economic factors have led to such uncertainty that even the most tenured of service
staff are questioning if they will keep their jobs. Discussions about budget cutting have originated from general managers or dealer principles who normally don't cross the line between
the front end and back end-except to ask if you met your numbers or if you have a car ready for them. Dealers are going belly-up even though the service department and the franchises are
profitable and selling cars. Things have changed and like it or not, you will need to change with them. Merely knowing the basic service processes and having managerial experience may not
be enough to compete in today's market.
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