CIMA Systems Blog

By Gary Nixon

Proactive marketing of factory-recommended services as well as dealership recommendations prior to the customer arriving in the drive not only pre-sells your service business, but displays your expertise at keeping their vehicle in top performance.

To accomplish this, you will need a plan of action and some automation to make such pre-selling practical, largely hands-off, and effective. Your audience must include new and used vehicle customers, current service customers, those you haven’t serviced in a while, and those which declined some of your recommended services.

Today, most dealers attempt to do this with a “blast” direct mail or email offering one-time service specials like a lube, oil filter or brake special hoping customers will see a coupon that is applicable to the service they feel their vehicles need. Although this plan does result in a spike in service, it is only temporary.’

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There is no denying that the last year has been a tough one for auto dealers. Sales are down and consumers are keeping their vehicles longer. That trend of customers retaining their vehicles longer, however, has led to one of the few bright spots for dealers during the recession: fixed operations. With customers holding on to their vehicles longer, there has been an increased concentration on vehicle maintenance and repair. After all there’s no point holding on to a vehicle that doesn’t work. With that in mind we spoke to some experts in the fixed operations field to find out how dealers can squeeze more profit out of their service lanes.

Boosting fixed ops profits

The first question we put to our experts was the obvious one: How can dealers boost the profits from their fixed operations departments?

One obvious option that many dealers have used is to send direct mail of email offers to customers who have bought cars from them in the past. Gary Nixon, president and CEO of CIMA Systems, warns, however, that “Many dealerships attempt to do this with “blast” direct mail or emails offering a single service special, such as a LOF [Lube, Oil, and Filter] discount. These blasts then leave the dealership wondering, “What do we offer next?”

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Today, it is highly doubtful that you will find a dealership that is not using some form of customer relationship management (CRM). Some efforts may be as simple as recording contact information and products and services purchased, while others may keep detailed records of every client contact and send out automated email and voice messages. No matter what form it takes, some type of customer relationship management is a necessity for dealerships to retain and grow their business. In fact, a recent study from the University of Marylands Robert H. Smith School of Business, conducted with CRM provider Autobytel, found that dealerships using a customer management system perform 23 percent better than the competition.

There are a number of providers in the automotive space who offer well-designed and effective CRM systems, such as Reynolds & Reynolds, ADP, Autobase, DealerUps and CallCommand. So whats puzzling is why so many CRM systems are under-utilized or fail altogether. Why do so many systems not live up to the hype? Is this a function of overly complicated technology, a vendor issue, a dealership issue, or a combination of any or all of these?

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According to Reuters, auto sales dropped 12 percent in March alone and predictions are that they will continue to decline through the second quarter of this year. Experts counsel that a strong focus on promoting your parts and service business is the way to keep your profits up during this down time. I’d like to offer a different perspective to ensure you focus on your entire dealership.

Although individual promotions for parts and services, vehicles sales, or any other aspect of your dealership are an integral part of your marketing plan, sending communications that promote specific departments to the exclusion of others sets you up for a roller coaster ride. For example, a marketing promotion that only touts a $9.99 oil change may make your service business rise briefly, but it may soon go right back down again, leaving you in a constant state of peaks and valleys, scrambling to come up with even better promotions.

Instead, focus on promoting your entire dealership. This approach gives you room to highlight a particular department, for instance your service department, while still tying in all the services and products you offer that meet the full gamut of customer needs. Marketing your dealership as a whole sets you up for a steady stream of revenue, so your business remains strong even during the most difficult economic conditions.
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