Dealers Push Service to Make up Revenue

by Mary Wisniewski

Given the dismal economy, some dealers only see potential for their car service revenue to do well in 2009. To capitalize on this potential and attract new customers, dealers are marketing their service more. Hunterdon Auto Resource Center is one such dealership that expects to market its car service more this year, says Ernie Tufold, general manager.

Marketing its service offerings is a little easier for the New Jersey-based used-car dealership because it started as a repair shop. Now, Hunterdon Auto continues to service all brands, with the ability to do everything from repairing tires to installing moon roofs.

To entice new customers, the dealership offers perks. For example, it decided to offer a shuttle service for some of its corporate accounts a few months back. Hunterdon Auto also recently purchased a customer retention tool, which will allow it to reach out to customers on more occasions, sending them anything from an anniversary note to an oil change reminder notice, says Tufold. To further entice customers to come in for service, the dealership is considering issuing coupons this year.

“We are trying to figure out who and when we will target,” Tufold says. Hunterdon Auto Resource Center is certainly not the only dealership beefing up its service marketing to benefit from potential business.

Dealers “are expecting service to drive their dealerships,” says Jonathan Ord, chief executive officer at Dealersocket, a customer relationship manager technology provider. He notes there is a shift in the automobile business, from focusing on the front-end to the back-end.

One new way dealers are marketing their back-end business is by utilizing their vehicle databases to conduct marketing campaigns, Ord says. This works when dealers look at their key metrics to see what has driven past customers to make purchases. This technique is especially effective when it comes to service promotions, he says. “More companies are looking to use their databases better and better,” Ord says. “It’s so much cheaper than what they used to do.”

Not all dealers will offer more promotions in 2009 to attract new service customers. Toyota Town of Stockton in California will offer about the same amount of service promotional products in 2009 as it did in 2008.

Tony Mattice, service manager, says the dealership runs special discounted service prices to try to get people in the door and stay competitive with companies like Jiffy Lube.

Direct marketing by mail is the mosteffective channel to draw in business, Mattice says, describing television spots as more of a tap on the shoulder.

Toyota Town markets to some 10,000 to 12,000 people, using both an in-house list as well as a list from Toyota. What special promotion the dealership offers depends on the season. For example, a discount on air conditioning service is more likely to run in the summer. In November and December, the dealership hosted a canned food drive, as well as participated in Toys for Tots. When people provided a donation, the dealership gave them a $20 voucher for their next service visit with hopes to lure them back.

Other dealers simply rely on old-fashioned methods like word-of-mouth to drive new service business. Consider Butler, Mont.-based Max Motors. The dealership does direct marketing campaigns and occasional radio spots, says service manager Chris Sorrell. But he notes that most traffic comes from its good reputation.

“We’re pretty swamped for service,” he says. Sorrell credits this to the dealership’s location, a small town, and the positive customer service the dealership provides. For example, Max Motors picks up and drops off vehicles to its customers. “We’re just old-fashioned,” he says.

Posted in New Solutions, The Service Solution

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