Many dealers will sign up for a marketing product or service campaign with the intention of bringing more customers into their service department in order to increase their customer pay business, improve owner retention, raise CSI and of course build net profits. Since about 60% of the average dealership’s net profit comes from fixed operations, this strategy makes a lot of sense, right? The fact is, many times the results are the exact opposite of what the Dealer expected to achieve. Is it possible to increase retail traffic and improve owner retention with an average CSI rating, while lowering sales and reducing net profits? In other words, can a successful marketing campaign result in your dealership losing money? It’s a great thing to bring more customers into your dealership but more importantly, what do you do with them when they show up?
To further explain my point, let’s take a look at an actual case study of a dealership that recently built a stand-alone Quick Lube facility next to his dealership and then launched a marketing campaign to drive more customers into his new facility.
This scene is playing out in far too many dealerships across the country so how can you prevent this from happening in your dealership when launching marketing campaigns with your CRM vendor? Let’s start by examining all the factors that led to the disastrous results outlined above. This dealership was averaging about 1000 Customer Pay Repair Orders per month @ 1.5 HPRO when his marketing campaign was launched, resulting in 10% increase in traffic which then produced the following:
- 100+ Additional Incoming Service Calls
- 100 Additional Service Appointments
- 100 Additional Maintenance Menu Presentations
- 100 Additional RO’s to Dispatch
- 100 Additional Vehicles to Inspect
- 150 Additional Technician Hours
- 100 Additional Vehicles Requiring Parts
- 100 Additional Vehicles to Park
- 100+ Additional Outgoing Phone Calls for Advisors
- 100 Additional Customers to Cashier
- 100 Additional Active Deliveries
- 100 Additional Next Appointments to Schedule
Of course in reality all of the above did not happen as outlined since the dealership was not prepared to provide these new customers with the highest level of service possible. This dealer is now experiencing an increase of over 50% in RO count but his net profits are still not there. In Don’s workshop, attendees will learn how to prevent this from happening in their dealerships by following the Five Simple Rules for Maximizing Service Growth.
As CEO of DealerPro Training and founder of The Don Reed Pro Training Network, Don has worked with hundreds of dealerships and major dealer groups across the U.S., Canada and the United Kingdom to increase profits in their fixed operations.
See this session presented by Don Reed and more at the 17th Digital Dealer Conference & Exposition, September 23-25 at the Mirage Hotel & Casino.