A Dealership’s Profit Generator
We’ve spent a lot of time talking with folks in the automotive sales industry. Dealers from all over North America have connected with us and we’ve been able to draw some valuable insights.
Most automotive dealerships, and especially new car dealers only make around $2000 on each new auto sold. That just isn’t enough revenue to keep the lights on, especially when you’re only selling a few cars a day (if you’re lucky!)
The bread and butter for automotive dealerships aren’t in selling new cars. This may come as a surprise to a many, but it’s true. Most dealerships make their money on selling extended warranties, and upgrades.
The majority of a car dealership’s sales actually comes from the fixed ops department. Surprising? Not really. Unfortunately, many dealerships are don’t have much of a strategy in place to bring in more folks to their service centers.
In this blog, we’re going to go over the critical steps in ensuring a healthy fixed ops department.
1) When making a new car sale, connect your customer with the service manager directly!
During the sales process, it can do wonders for your dealership to build a proper relationship with the customers. When they buy a new car, introduce the customer to the service department. It may almost seem too easy to do, but many dealerships skip out on this step.
Introducing them to the service department early on gives the customer instant gratification. This way when they need an oil change or any other basic car service your service department is fresh in their minds.
You can even give them a small tour of the service center, showing them your qualifications, and even introducing some techs. This is a very personal, and informal way of building trust and credibility with the customer. The goal is to get them to immediately think of your service department when they need car servicing.
As we mentioned, including extended warranties in the new car sales pitch is a fantastic idea. It gives the customer the impression that they can save money in the long run by dealing directly with the dealership they bought the car from.
This way, any time they need servicing for their vehicle they essentially HAVE to bring their vehicle to you or else they run the risk of losing out on the warranty they purchased. Should you impress your customer during each warrantied visit, you can build a long lasting relationship.
So each time they come in for service, greet them with a smile! Ask them how they are, how their day has been. More importantly, THANK THEM for coming in. You want the customer to feel like they are welcomed in your store, and that your employees are genuinely happy to see them.
2) Use The Right Tools For The Job
Using digital vehicle inspection software can go a long way in impressing customers. They can see exactly what the tech sees in the inspection report. For them, its no longer guessing game in wondering if the work recommended to them was truly necessary.
As opposed to old school, and out-dated paper inspections, digital vehicle inspections offer valuable insights to the customer. DVI’s can give the customer a truly in-depth look into what is wrong with their vehicle, and WHY service is recommended. Informative photos and videos offer the customer insight into exactly what the tech saw while inspecting their car. In this case, a picture really IS worth a thousand words.
We all know how time-consuming, and downright annoying it is when you have to walk the customer around their car explaining why the service was recommended. Instead, with DVI’s the customer really gets a valuable understanding into why their car needs work.
Another helpful tip is to show them exactly what the manufacturer recommends in the vehicle’s manual. Show the customer that not only your dealership is recommending service, but so are the makers of the vehicle. For example, not everyone knows the timing belt should be changed every 100,000km. Showing the customer a printout, or transcript straight from the manual can help convince them further (while showing them the images from the DVI inspection.
You can even show them images of what would happen if the timing belt were to go unserviced. Show them the damage a car can take by not having it done. This is a VERY effective method of upsetting service.
3) Explain Service Costs & The Benefit Of Getting Ahead of Issues
Showing the customer images of what could happen if they don’t service their vehicle isn’t a scare tactic either. Think of it as saving the customer money on a costly service job. Show the real cost of getting the recommended service done vs the cost of letting it go unserviced. They should be able to understand of following simple service work is cheaper than fixing/replacing a whole engine!
You can even show them how long a part you’re recommending to fix will last. Say you’re recommending a timing belt. That service job can cost up to $700 for the customer, but if you say it is an investment into the car the customer can better get behind it. For example, if the service job is $700, you can show them that by fixing that part, it’ll only cost them $1.90 a day.
In other words, for the cost of a coffee in the morning, they can drive without the worry of their timing belt breaking. No worrying about them stranded on the side of the road and having to spend more time, more money on service and towing.
You can even tell them how by doing the recommended service, their vehicle can last longer. Not even will it last longer, but it’ll be safer for them and their families while driving! Telling them they’re going to get more out of their vehicle, and their families will be safer in a well service car, the odds of you up-selling service is much more likely.
Should you use the right tools for the job, even after the warranty expires, the customer wouldn’t even dream of bringing their vehicle anywhere else for service. They would have full faith in you, your shop and your abilities.
Digital vehicle inspection software has made it even easier to explain the importance of service recommendations. Your advisors can send extremely detailed inspections complete with photos and videos directly to the customer’s phone. Explaining the importance of service as we mentioned above, and showing the customer why a job is being recommended with photos and videos can do wonders for upselling customers.
Want to learn more about digital vehicle inspections? Want to learn more about helping your advisors sell more service? Simply fill out the form below to get a free, personalized demo of our software where we can walk you through the benefits of DVI software for your dealership.