Think about this: what if you were responsible for the ROI from two teams you ran?
One of them is front and center. You give them your love and support, they operate out of a beautiful store, and they return a certain level of revenue for you.
The second group lives on the back burner. You don’t give them a lot of your time or love, and they operate in the back of your beautiful store, hidden from view. Despite this, they return more revenue than the first team.
Which team would be #1 in your eyes?
As I work with dealerships across the US and internationally, this scenario is common across almost every single one of them with very few exceptions. Service and Parts departments are the top revenue driver for most dealerships, but it is given the least marketing resources to grow.
I asked a few of my clients for some real numbers to back up my hypothesis.
My findings were:
- On average, service and part generates 55-60% of a dealership’s overall revenue.
- On average, dealers give as little as 5% to, at most, 15% of their marketing budget to the Service and Parts departments.
To many, this could be seen as a great return on their investment. Market a little and make a lot of money–why change anything at all?
Instead of looking for the answer to that question by examining your Fixed Ops budget, examine the flip side of it. Does spending 85-95% of your marketing budget on a department that gets only 50% of your revenue seem like a sound business practice?
My point is that with some adjustment to marketing, service and parts could generate even more revenue. I think the crux of the issue is that dealers do not know how to expand their marketing efforts outside of offline marketing in the form of mailers with specials to increase this revenue generator.
Their “digital” marketing efforts may be limited to a newsletter with a service coupon or an email blast, but there is no consistent marketing through the digital world for parts or service.
What should a dealer do to in terms of marketing service online?
First, they need to review their current digital marketing efforts and decide where they could expand their efforts.
- Have they taken advantage of the new GMB listings for Service and Parts?
- Do they have optimized landing pages for each of the 8-10 basic services they handle?
- Do they have specific Social Media campaigns or remarketing efforts to highlight service?
- Do they have a “Why Service With Us” video on their service page or confirmation page?
- Do they have a great “Thank You” page for customers who book service that offers other options for them to view while they are still on the site?
- Do they work closely with their SEO and SEM provider to drive relevant traffic to these pages in order to convert leads?
Lastly, they need to enroll the leadership of the service department into proper digital marketing educational programs so they can unlock their entrepreneurial efforts to grow their business.
If dealerships continue to do what they have always done in terms of marketing service, they will never keep their customers from going to the independents. Take a look at the digital marketing for a major third-party service shop such as Meineke. Intuitive websites with a clear initiative and well thought out user experience gives them a clear upper hand to a dealership that has thrown together a few templated service pages. There is no reason dealers shouldn’t be making every effort to compete with those third-party shops.
If a dealer for a moment focuses their marketing on this revenue generator, or if service was a priority, what could they accomplish?
The PCG Digital team, myself, and my brother Brian’s quest is to help educate dealers about this opportunity and to help them to unify their message across all marketing channels and to improve the digital marketing knowledge of service managers.
2020 finally must be the year that dealerships understand that under-funding the marketing for service is taking revenue from the bottom line. It is time for Digital Education to be shared amongst the Fixed Operations department, not just hoarded for other leaders and employees of the dealership.
If I can be of service or if you need recommendations on training for your Fixed Operations team, please reach out to me.
Please join Brian, myself, and the PCG Digital team this March for a one day Fixed Operation Marketing Boot Camp. Click here for more information.