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If the recent automotive news tells us anything, it’s that sales are slow – and change is fast. Automakers and dealerships are navigating declining demand, while at the same time managing shifts in consumer expectations. They’re also searching for ways to speed the sales process and streamline service department functions. Recently, in fact, new events are taking shape that may create additional revenue and customer service opportunities across the dealership.

So, while the story of sales may not be great news, the industry’s movement toward more efficient operations is exciting and promising. On the service side, new marketing opportunities and additional revenue streams are emerging, all directly or indirectly related to technology innovations now coming to the fore. Here are a few service-related headlines:  

Vehicle Subscription Plans Might Become a Boon for Fixed Ops

What: You’ve undoubtedly heard the news about vehicle subscription programs. From all-makes platforms like Fair, to automaker-specific test programs operated by Ford, Cadillac and Volvo, it’s an idea that is gaining popularity – especially at the dealerships. Indeed, there are already a few dealers who are operating their own subscription program to further monetize their inventory. According to Automotive News, that includes service revenue, as well.   

Takeaway: The article outlines ideas that dealers can try in order to create a revenue stream from a subscription program. One such idea for dealers is to base a service drive subscription program on reconditioning best practices. The value is due to the dealer’s access to historic vehicle data.  Additional ideas include adding fees for repairs and warranty work.

Go here: Vehicle subscription plans create fixed ops opportunities for dealerships

Top Global Sellers: Can You Guess the Top Ten?

What: Okay, so most people already know that the Ford F-Series truck is the best-selling vehicle. And many would probably guess that the Toyota Corolla is also on the top five list of the global popularity. But did you know the popular Nissan Rogue is in the top five? It’s true. And here’s another surprise: The Toyota Camry didn’t crack the top ten. The list is published at MSN and is based on 2018 global registrations from JATO.

Takeaway: Counting vehicle sales around the globe shows trends in terms of consumer preferences, and in how automakers are responding to an array of market pressures. At the dealership level, it can also provide a signal as to which vehicles consumers will be most interested in buying, and what service managers might see more of when it comes to maintenance and repair.

Go here: The world’s best-selling cars of 2018

Your Friendly Lyft Driver Might Be a Great New Source of Income

What: According to Automotive News, there are currently around 4 million rideshare drivers bopping around cities and suburbs. That’s a lot of Lyft and Uber business, to be sure – and it’s also a great opportunity for dealerships. Consider, for example, that while most vehicles are active just four percent of the time, rideshare vehicles ring the bell at a robust 26 percent. The Automotive News post figures that this type of use equals six times the required maintenance.

Takeaway: If you’re not already marketing to ride-share drivers, seriously consider doing so. Obviously, their income requires consistent maintenance and repair on an accelerated schedule – and that makes them an ideal customer. If you build a solid service relationship based on complete, fast and affordable service, chances are they will return many times.

Go here: Drivers for ride-hailing services can be a prime source of fixed ops profits

Winter Blues Expected to Creep Into February Car Sales

What: Edmunds is forecasting a gloomy February for new vehicle sales, thanks to a 2.2 percent decrease compared to February 2018, and an estimated seasonally adjusted annual rate (SAAR) of 16.7 million.  On the bright side, sales improved over January 2019 by over 12 percent. Edmunds analyst Jeremy Acevedo sees it as a subtle drop and a “good barometer of the gradual sales decline we expect through 2019.” He cites the growing cost of purchase, such as interest rates, as a main reason for the slump.

Takeaway: After almost a decade of record-breaking growth, the auto market seems to have settled into a gradual sales decline, driven by higher cost and perhaps the availability of late model used vehicles. Regardless of the reason, service managers are becoming bigger VIPs inside the dealership, with a mandate to streamline service operations, and improve efficiency throughout the department.

Go Here: February Foretells Slower New Vehicle Sales in 2019

The days are getting shorter, the air crisper, and playoff baseball is at hand. Which means there’s one question on everyone’s mind:

Is this when new vehicle sales start to slide, and the Service Department comes in from the bullpen for the save?

The answer, apparently, is that it “depends.” Comparing September sales to last year’s hurricane-fueled sales rally doesn’t exactly paint an accurate picture – especially when new car sales estimates remain over 17 million units. Still, there’s little doubt that overall sales are headed toward a year-end fade. As such, we’ve spotted a few trends and stories that might help you prepare for a challenging final quarter – and a successful start to 2019.

September New Vehicle Sales Declined 5.5%. Is it Time to Worry?

What: Automotive News calls it a second-half slowdown, and while that’s true enough there are a few interesting wrinkles in the story. Let’s start with a Harvey hangover from last year’s hurricane replacement business. Indeed, sales bettered the predicted 7% drop in sales and registered a 17.54 million SAAR as well – the fourth highest September on record. Still, the signs are clear: piles of discount dollars aren’t sparking buyer interest like earlier in the year.

Takeaway: It’s time to fire up the Service Closer. Service is the key to retention – something vitally important during slow sales cycles – and offers a sturdy profit center you can count on. It’s also a good source of new vehicle sales… if you’re prepared to leverage it. Are you leveraging customer data and mobile technology to build relationships at the service drive? Using the right tools to create a “right time” and consultative approach improves profitability, increases retention and lowers the cost of new vehicle customer acquisition.

Future of Mobility - Dealer-FX

Is the Future of Mobility Robots and Ride-Hailing, or Same as it Ever Was?

What: Earlier this month, National Automobile Dealer Association (NADA) Chairman Wes Lutz took aim at the future of mobility, questioning the logic behind some very common assumptions like the emergence of autonomous cars and the effectiveness of ride-hailing services. According to Lutz, humans are actually quite safe on the road when you consider that we drive 90 million miles per traffic fatality. In regard to services such as Lyft and Uber, he pointed to a recent AAA study that showed using ride-hailing services cost more than twice as much.

Takeaway: Dealership business models are evolving. As such, the Service Department will play an increasingly important role in driving profitability and retention. Whether or not people use ride-hailing apps, buy their own car, opt for a subscription service or just go back to taking the bus, as options increase so too does the opportunity for the entire dealership operation to thrive. Things are definitely changing. And as they do, dealer managers will see increased Service opportunities to build relationships and drive efficiencies.

Speaking of Mobility, What About EVs — and their Impact to Service?

What: A recent study by UPS and GreenBiz offers good insights into fleet perspectives about EVs. That’s yet another one of those “future mobility” topics. Survey results found that environmental benefits and lower cost of ownership were the greatest drivers behind fleet interest: Over 80 percent cited sustainability, and 64% said that the expected lower total cost of ownership was a major factor.

Takeaway: The cost of ownership benefit includes direct and indirect costs over the life of the vehicle. That includes things such as fuel economy, but it’s also an expectation that EVs will require less maintenance than traditional vehicles. Indeed, according to InsideEVs, fewer components means fewer issues and less need for service. For service managers, it’s more complicated: As EVs begin to gain critical mass, dealerships may well have to factor in training and cost of electric service procedures; all of which may make the typical repair order more costly — but less frequent.

Slower Sales Call for Focus – and Creative Solutions

What: A recent series by Automotive News that features dealer success stories during the Great Recession. It chronicles what many dealers did to thrive under terrible sales conditions. For example, Ohio dealer Rhett Ricart improved team morale, while others focused on creating a better customer service and repair experience – an approach that has certainly reaped dividends today.

Takeaway: You don’t have to open a deluxe car wash.  however, slow sales offer a good opportunity to focus on retention and customer service. Indeed, consider what many studies have reported over the years: Around 70% of recent car buyers will use a third-party repair shop for service.

Trends like that can change through simple steps, such as introducing the service department to car buyers towards the end of the sale and connecting the sales team to opportunities at the service drive. It’s a fundamental fact that service departments can generate more than 50% of a dealership’s profit; as a result, keeping buyers connected throughout the entire process is a vital step toward thriving during a sales slump.

How Can Dealer-FX Help?

At Dealer-FX, our mission is to help auto brands and dealerships transform the customer experience by providing leading-edge technology solutions that create an exceptional and efficient service experience. How can we help you?

Related Links

 

On August 2, Apple became the first U.S. company to reach a $1 trillion market valuation. In doing so, it crossed an interesting threshold once thought unattainable, at least for anything other than a global energy company.

But then again – was anyone really surprised?

Probably not. Apple is unique, after all, a public showcase of thinking differently. From iMacs to iPods and iPhones, the company has been on a journey defined by creativity and driven by innovation.

Here-are-a-Few-Customer-Experience-Lessons-from-Apple-Trillion Dollar Journey Dealer-FX

Apple is simply different.

But so is Amazon. And it’s no coincidence that Jeff Bezos’ company is in close pursuit of that trillion-dollar line. Their own valuation sits at around $424 billion. What’s interesting is that the two companies share similar customer experience keys instrumental to their remarkable achievements. Indeed, what’s most relevant about Apple’s $1 trillion valuation – and Amazon’s pursuit – are the things we can learn from their shared traits:

Culture starts with shared values

The memo sent by CEO Tim Cook after Apple reached the $1 trillion mark is a good example of a positive culture. You can read it here. The takeaway for service managers is how Apple and Amazon executives have aligned the company’s objectives with human values and hopes. This is critical because the digital transformation taking place in the automotive retail industry requires a culture shift inside the dealership. Technology only works if the team members see its value and are dedicated to making the change.

Technology that redefines the customer experience

For Apple, it’s been about design and the creation of devices that feel natural. For Amazon, it’s using data to anticipate behavior and supply the answer. Both companies blend amazing technology with an incredible human experience. This ideal has obvious application in the service drive: using technology to power human interaction is how relationships are made. It’s a vital component within the dealership sales and service cycle.

Create a need

No one told Apple that people would go crazy over the iPod. They noticed how the customer experience of the typical MP3 player was poor and designed an elegant user interface. Amazon didn’t wait for someone to tell them to create Alexa or apply Big Data to the shopping experience. With that in mind, how can service advisors use information and technology to introduce a need, and sell the ‘why’ to customers? It’s a good way to expand RO values and develop a stronger relationship with customers.

Creating a personalized experience

Your iPhone is personal to you. It doesn’t have to be a different colour (though that’s nice!) because the content is what makes it unique. Likewise, the personalization of the shopping experience is where Amazon gets its power. Innovations like recommendations, one-click ordering, anticipatory shipping, and price optimization make the experience unique – and uniquely valued. Creating a similar dealership service experience requires the timely application of knowledge about the customer’s needs. It also requires the building of a culture that seeks to make the experience more personal.

Someday, other companies will reach a $1 trillion valuation, and Apple won’t be alone. Yet what’s fascinating is that Apple’s success was accomplished in much the same way as it would be at the local dealership: through shared values, the application of leading technology and personalization for the customer.

How Can Dealer-FX Help?

At Dealer-FX, our mission is to help automotive brands and dealerships transform the customer experience by providing leading-edge technology solutions that create an exceptional and efficient service experience. How can we help you?

Related Links