Car Dealership Vehicle Sales Down, Now What?

Auto sales this year have been flat, as predicted. That doesn’t necessarily mean doom and gloom for dealers. But dealers cannot rely on new-vehicle sales alone.

It’s time to look harder at other avenues to drive profitability. Which areas need more focus so we can maintain or even increase profit growth?

The untapped opportunity lies in the service department. There’s an experiential “white space” for dealers to seize here. What do I mean by “white space”? Consider this: less than one in three service visits take place at dealerships in the U.S., even though dealers sold all of the new vehicles and most of the used.

That low service-visit number suggests dissatisfaction or lack of loyalty from vehicle owners when it comes to getting their vehicles serviced.

Take a serious look at how these customers fall off and what can be done about it. Re-engaging customers beyond sales alone can drive significant brand loyalty and support revenue growth for years to come.

Customers today are looking for something new, different and far simpler that emulates the tech-driven experiences they are receiving in so many other places.

Look at how Amazon, Uber, Open Table and Dominos have all improved or even transformed their businesses. Customers receive a clear, transparent experience that’s modernized by technology delivering what all consumers want: value, convenience and trust. For something so innovative, it’s simple at its core.

So, with today’s typical dealer experience in mind, how can dealers today deliver on that ultimate experience for car owners when it comes to servicing vehicles in order to improve retention and profitability?

The answer is to invest in technology that allows them to connect with customers before they even enter the shop. Here are a couple specific steps that enable a better experience.

First, educate car buyers on service, ensuring they understand the benefits of the process. According to the Cox Automotive 2017 Car Buying Journey, less than half of new-car buyers, and only a fourth of used-car buyers, know what the dealer offers in terms of service capabilities.

Educate customers and introduce them to all areas of the dealership. An effective way to start doing that is to introduce vehicle buyers to the service department, demonstrate the online appointment website setting and then use an integrated customer-relationship-management system to book their first service appointment.

Another key service feature for dealerships is making sure they have the capabilities to offer online vehicle service appointments.

Allowing the customer to book their appointments online across multiple channels – desktop, tablet, mobile or even in-vehicle integration – presents them with a wide range of options. It gives them flexibility and convenience.

According to our data and research, 23% of online customers schedule their visits outside of the business hours of a dealership. Without online scheduling capability, those customers are easily lost to a competitor.

Cox Automotive research found that 76% of customers who scheduled service appointments online would be willing to do so again. And 45% of customers who did not take advantage of online scheduling did not know it was an option. 

Communicating with customers in the way that is most convenient for them is an essential part of the service experience. Today, most customers prefer texting capabilities. Dealers can use testing to communicate appointment reminders, service updates and maintenance notifications.

Recent research indicates 67% of vehicle owners are open to receiving text updates.

The right technology can streamline and simplify business and optimize all areas of a dealership, particularly the service department. A seamless customer experience provides customers with value, convenience and trust. It earns satisfaction and drives retention.

Jim Roche is senior vice president-marketing and managed services for Xtime, a Cox Automotive brand.