If you’re like most dealers, your current focus is to grow fixed ops revenue. If this is your goal, it’s critical to step up service conquesting efforts. Dealers can no longer rely on expanding new vehicle sales to feed their service department. While focusing on retention is important, your goal should also be to focus on service conquest with the goal of replacing defectors, at a minimum, and increasing service market share.
The good news is service conquest campaigns are far more affordable than sales conquest campaigns. Most industry analysts predict a flat to declining new vehicle market through 2021; in this environment, sales conquest campaigns become brutally competitive and a zero-sum game.
Service conquest campaigns are less costly per customer and deliver a better ROI than sales conquest campaigns.
• Service conquest campaigns: $40-$80 per customer acquisition
• Sales conquest campaigns: $1,200-$1,600 per customer acquisition
The secret to keeping service conquest campaigns affordable starts with the list. If your service marketing efforts consist of blanketing your PMA with oil change coupons, it’s time to step up your game.
Today, it’s critical to take advantage of technology and data-driven analysis to find and hone in on service customers who are ready to take action.
The best sources for new service customers include:
Same Brand Used; 4 to 6 Years Old
Due to the recent boom in new vehicle sales, the number of four- to six-year-old vehicles in the market is rapidly expanding and will see significant growth in the next two years. Owners of these vehicles make an excellent service conquest pool because they are less likely to have strong servicing relationships.
Many are second owners and have defected from other franchised dealers or are open to new relationships now that the warranty has expired. Unlike new vehicle sales, this category is not as rigorously defended by your competition, particularly by dealers who are still focused on service absorption.
Recall Follow Up
Recalls represent a significant revenue opportunity for service departments. Whenever a customer comes in for a recall repair, there’s an opportunity to identify additional repair work. Our data shows that an average recall RO is $695, more than double the average RO amount of $335. Recall customers should be pursued aggressively as a means to re-engage old customers and establish relationships with new customers. Think beyond the ROI of a specific recall campaign to the long-term value of that relationship if you can bring them into the fold.
To increase recall marketing response rates, bundle a recall repair with another offer such as an oil change or a recommended service based on a person’s make, model and estimated mileage.
You can purchase lists from many sources, but with more than 200 million auto owners, how do you know what to buy? Start with your PMA. Zero in on competing brand owners, selectable by vehicle, make, model and year.
Enhance your outreach with specific demographic targets; selectable by income, credit score ranges and over 175 lifestyle selections. Which ones are best for service? Recent movers, parents with teenage and college-age children, people who drive a lot of miles and those who trade in vehicles every few years are a good place to start.
Third-party leads are also a good source for service prospects, as anyone who buys a vehicle will eventually need service.
Service pay-per-click (PPC) campaigns are critical to build and defend your customer base. This is a major battleground with independent repair facilities and industry dynamics are very different than sales PPC.
All Pre-Owned UIO
Build aftersales engagement with marketing campaigns that include automated trigger campaigns for needed service. Focus on converting out-of-warranty customers and encouraging repeat visits.
Mine your CRM for unsold sales prospects, including old third-party leads. If you only close 50 percent of new vehicle sales, what about the unsold prospects that bought your brand somewhere else? They gave you a shot at the sales business, maybe they’ll give you a shot at the service business.
Create an unsold customer report for the last six months and create a campaign to try and maintain connectivity.
Do you know who your most valuable customers are? If you divide your customer database into quintiles, you’ll discover the top 20 percent is responsible for 69 percent of your gross profits, while the bottom 20 percent are net losers.
Use data analysis to create a profile of your most valuable customers, and then create lookalike audiences to find and target service prospects with similar attributes in your PMA using Google properties, Facebook and Instagram. This type of targeting is highly cost effective.
Once you have identified service prospects in your PMA, it’s important to deliver timely and relevant branded communications. Be sure to use an omnichannel marketing strategy that includes limited direct mail, email, search engine marketing, display ads and social media advertising.
The stronger your audience, the better your message will resonate and the higher your response rates will be.