NEW YORK – Service-department revenue got a lot of auto dealers through hard times, and now many of them aren’t letting up when it comes to that back-end profit center.
They are doing an array of things to enhance their fixed operations, from building new facilities with prominently located service lanes to using customer-relationship management software for systematic marketing.
“Parts and service carried us through the recession,” says Craig Monaghan, CEO ofAutomotive Group, a chain with 79 dealerships. “The front end of the store is sexy, but we make our money in the back.”
revenue last year included $190.6 million in service work and $335.4 million in parts and accessories, according to the 2012 WardsAuto Megadealer 100.
“The service department is where customers come most when they visit the dealership,” says William Underriner, a Montana dealer and chairman of the National Automobile Dealers Assn.
Because of that visit rate, he is building a new store that highlights the repair and maintenance operations.
“We will put more emphasis on where the service lanes are located,” Underriner says at a recent conference put on byand IHS. “I want the service department to stand out as a primary place with a friendly feel.”
Plans include arming service advisors with computer tablets to make them more efficient and mobile when interacting with customers and writing repair orders.
“If we keep doing things the way we did them, we’d be out of business,” Underriner says. “One thing dealers should be doing, if they aren’t already, is e-commerce. There are so many CRM tools for customer data mining. Dealers can bring these things in to make more money.”
CRM software keeps track of customer repair records, allowing dealerships to, say, send timely reminders when oil changes or tire rotations are due rather than mass mailings that can irrelevantly suggest maintenance work to a customer that just had it done.
Using CRM in the service department allows personnel to quickly call up the service history of a vehicle in for repairs or maintenance. Such information informs advisors of work that has been done, what has been recommended and what a customer might have declined.
For customers, CRM software offers them a menu of services, comment boxes to describe what is wrong with their vehicles and an opportunity to make an appointment online.
Dealers unwittingly “gave away a lot of business” to independent shops and service center chains, Monaghan says. “We didn’t care about ding repairs, tire sales and realignments and fixing windshield. And we gave the perception that we were overpriced.”
Asbury’s new service department marketing campaign is, “We will not be undersold,” he says.