Overcome Shortages And Grow Revenue With Direct Marketing

The automotive industry has experienced major challenges in the last few years.

Changes in innovation, shifting consumer preferences, and supply chain shortages have completely revolutionized the way we buy, sell, assemble, and service cars. With inventory shortages predicted to last into 2023, dealers are looking to refocus their marketing efforts from moving vehicles off the lot to ramping up revenue in other departments.

So, where should dealers spend their precious ad dollars instead? The service department.

Finding Success in the Service Department

Current dealership advertising strategies are focused on attracting new car buyers. Yet 47% of dealership gross profits are attributed to dealership service, not car sales.

Despite this significant stream of revenue, advertisers admit that service department marketing only makes up 10% of the average dealership’s advertising budget. Instead, 90% of their budget--and an average of $554,292 goes to prospecting customers for new car sales despite the best source of leads and revenue being consumers who currently drive a car sold to them by that dealership.

While vehicle sales fluctuate, all vehicles require consistent maintenance. This makes service departments a reliable source of revenue, and investing in direct maintenance marketing can produce significant results.

Driving Service Revenue with Direct Automotive Marketing

The average cost of an automotive lead is over $205. That’s over $205 just to market to an individual who might be interested in buying your car. However, maintenance is unavoidable. If you can reach customers who are in need of service, your dealership has a much better chance of capturing their recurring business as well.

With direct automotive marketing, instead of spending over $205 to target potential customers, your dealership can target and market to current customers who you know are in need of service to strengthen your relationship with your customers and their loyalty to your dealership. This is can be done with connected vehicle technology (CVT). What makes connected vehicle technology so valuable is the massive amount of data it collects. However, this data is often controlled by the OEM or when available, not leveraged effectively by car dealers.

By using an aftermarket connected car product, dealerships can access and strategically leverage vehicle data to drive service revenue.

Here’s how it works:

When a connected car product is installed in your customer’s vehicle, the system then runs diagnostic scans and can notify your service department of their vehicle maintenance needs including check engine lights and routine maintenance. In a common use-case, if your customer reaches a certain mileage threshold, your service center will be notified that they are in need of an oil change.

For example, an application like CarRx allows dealerships to:

• Boost fixed ops profits
• Maintain a direct relationship with customers and their vehicles
• Easily send automated and custom messages for service alerts and mileage maintenance needs
• Ensure customers are directed back to your dealership for service, unlike other factory apps.
• Be the easiest option, allowing customers to schedule service via the CarRx mobile app in half the clicks it takes on most websites
• Increase inventory through trade-ins with direct campaigns to existing customers
• Save time and money previously spent managing complex marketing campaigns
• Access a convenient dashboard to see customers needing maintenance, send marketing campaigns, track appointments, and more.
• Provide additional revenue at point of sale by passing value to the customer

Knowing when maintenance is needed, your dealership can send personalized messages or custom offers encouraging the customer to return to your service center for maintenance. These alerts can be sent by email and directly to the customer’s mobile device. When they receive the message, your customer can schedule maintenance at your dealership directly from their phone–making it convenient for your customer, creating consistent revenue for your service department, and providing an exceptional customer experience to earn future business.

Many dealerships that use solutions like CarRx gross an additional $1 million per year in non-cancelable gross profit, in addition to the Repair Order (RO) revenues. Using connected vehicle data through a marketing platform like this allows your dealership to save money on cumbersome advertising spends and maintain critical service retention with precision marketing messages that you know your customers receive exactly when it is relevant to them.

This targeted approach allows you to incentivize customers for the services you know they need rather than guessing (and hoping) some of the thousands of individuals you sent direct mailers to take the bait and return for service.

With connected car data and direct marketing tools your dealership can keep your valued customers coming back for their service needs without pouring money into advertising while establishing a relationship to earn future business.