Fixed Ops Journal - February 2020 - F12

FIXED OPS JOURNAL

"As the parts and service director of a Nissan service department, I can't go on TV and radio.
But the manufacturers could. And that is one of the things I think they really miss out on. If you look
at the marketing dollars spent in selling a new vehicle versus promoting service, automakers are
really addicted to this month's sales. But service is where we are keeping customers."
TOM KANE, service director, Universal Nissan in Orlando

RETENTION
continued from Page 11

Co.'s customer service division vice president,
told Fixed Ops Journal.
The main reason potential service customers
drive past the dealership where they purchased their vehicles, fixed ops experts say, is
because they believe dealers charge too much.
"Of the top five reasons customers stay away
from dealerships for service, four of them
have to do with price," says Jim Roche, vice
president at Cox Automotive.
But Roche says a closer look at the data
shows many dealers are competitive on price
with independents but that consumers have
not gotten that message.
Toney says all automakers need to work to
combat the perception that dealership repairs
are more costly than independent shops.
"We as [automakers] have to do better and offer menu pricing that gets into the total cost of
the repair and helps fight back against this image that we are too pricey, too inconvenient and
not transparent," Toney says. "If you want to be
competitive as a dealer, you've got to make
yourself competitive in the marketplace."

Targeted marketing
The challenge for service directors is to reconnect with drivers of older cars with specific marketing materials that show dealers are
competitive. There is no template that guarantees success.
Universal Nissan in Orlando tracks the age
and mileage of vehicles brought in for service.
Once a vehicle has been on the road for five
years and reaches 100,000 miles, it becomes
part of the store's Legends program. Legends
customers automatically get a 10 percent discount on parts and labor. Tom Kane, Universal's service director, makes sure his customers know about those discounts through digital marketing.
The program has shown year-over-year
growth since it debuted in 2017, but Universal, like many other dealerships, spends most
of its advertising on sales, not service. Kane
believes automakers could help service directors win back business from independent
shops if they allocated more advertising dol-

PAGE 12

FEBRUARY 2020

"It's about the value, not the total cost,"
says Ford Motor Co.'s Frederiek Toney.
lars to service.
"As the parts and service director of a Nissan
service department, I can't go on TV and radio," Kane says. "But the manufacturers could.
And that is one of the things I think they really
miss out on. If you look at the marketing dollars spent in selling a new vehicle versus promoting service, automakers are really addicted to this month's sales. But service is where
we are keeping customers."
Automakers have specific information on
units in operation for each market that could
be leveraged for service department marketing. But it is not clear if this is routinely done.

Hitting the right notes
Fixed Ops Journal asked service experts
what advertising messages would most appeal to those drivers of post-recession vehicles who have drifted away from dealerships
for their maintenance and repairs.
Although conveying pricing vs. the inde-

pendents is a key component, service directors should also focus on the other value-added spiffs the store offers that most independent shops can't match. Convenience and familiarity are two examples, says Roche.
"Dealers should remind the consumer that
vehicles are complex," he says. "When you
buy a product that is complex, you inherently
associate [service] expertise with whomever
you bought it from. You go to Best Buy, talk to
them about a TV, they know something about
TVs. 'We have the know-how. You bought the
product from us.' Leverage that."
Says Ford's Toney: "People need to understand that we have trained techs with the
proper certification. It's about the value, not
the total cost. We need to get the message out
about the ingredients in the value proposition," he says.
Some of that added value, he says, doesn't
show up on the repair bill but includes use of a
loaner vehicle or shuttle service, a customer
lounge with Wi-Fi and factory-backed parts.
Ads should also convey that the dealer has
the right parts in stock, extended service department hours and menu pricing.
Service directors winning back customers
who bought vehicles in the post-recession
years hold many of the keys to success in the
front end of the store, too.
A recent Cox study showed that service is directly tied to new-car sales. Customers who use
the dealer's service department are twice as likely to shop that dealer for a new car as customers
who get their vehicles serviced elsewhere.
Says Roche: "Dealers more and more are becoming aware that if you are not doing the service, you are much less likely to sell them their
next car." 
At Universal
Nissan, older,
high-mileage
vehicles become
part of its
Legends
program, with
discounted parts
and labor.

Fixed Ops Journal - February 2020

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