A new year around the corner brings with it a renewed focus on self-improvement and growth. As 2018 has seen growing pressure on variable margins and sales volumes, many in the auto industry are asking: “How are we going to make 2019 better?”
There’s some good news. According to NADA’s annual Dealer Financial Profile research, gross profit from a dealer’s service department is up to 49%, compared to 45% since 2012. The opportunity is ripe for dealers to grow service market share to offset the decrease in vehicle sales returns.
As dealers focus on fixed operations as a principal source of profitability, a new Cox Automotive Service Industry Study goes on to maintain that the service experience is key to customer loyalty, as 74% of customers who serviced their vehicle with the dealership in the last 12 months will return to purchase their next vehicle from the same dealership — compared to only 35% of customers who did not visit for service.
With the ubiquity of smartphones, there will be major growth opportunities in the use of mobile technology as progressive dealerships look to optimize fixed operations to secure storewide profitability through increased service retention and customer acquisition.
To that end, the next big thing in 2019 is Personal, Local & Mobile.
Let’s take a closer look at how dealerships can leverage mobile technology to sell and service more cars, and future-proof their business.
- PERSONAL – Fitbit for Cars
Delivering a personalized experience takes more than just getting the name right. The next generation of personalization enhances the user experience by connecting a customer’s coveted smartphone with their vehicle diagnostics and service department. It’s like tracking your personal exercise with a Fitbit, but for your car.
Most cars and trucks are equipped with onboard diagnostics or an OBD II port that provides access to data from the engine control unit (ECU). Using advanced mobile self-diagnostic systems, drivers can instantly run a health check on their vehicle directly from their smartphone. From the consumer’s perspective, unexpected costs and car repair sticker shock will be things of the past as they can instantly determine their vehicle’s viability and be alerted any time there is a problem. As new-vehicle dealerships handle only about 30% of service work across the country, offering this level of deep connectivity with each automobile will have a tremendous edge over third-party repair shops.
OBD mobile diagnostics also allow drivers to get insight into their driving habits along with helpful suggestions on how to further improve performance and fuel economy. Drivers can see real-time personalized vehicle data from how hot the engine is, their battery voltage, trip history, and much more. This level of personalization empowers customers to proactively monitor their vehicles and stay better connected with the dealerships’ service team with a direct hotline via their preferred choice of communications, such as a phone call, chat, text or online service scheduler.
Dealerships that offer OBD mobile diagnostics increase dealership stickiness by an order of magnitude. The idea behind this sticky service is that customers will use it frequently and become tied to this value-added service throughout their vehicle ownership lifecycle. Parents, for instance, like OBD mobile diagnostics because, in addition to monitoring their vehicle’s safety, they can track their children’s driver performance and behavior patterns such as rapid acceleration, speeding, and aggressive braking.
Smart mobile personalization becomes an indispensable part of the driver’s life. Dealers who are able to successfully keep customers coming back to the service department will be the ones who achieve growth and profitability.
- LOCAL – Instantly Attract & Retain Customers for Life
The growth in GPS technology is giving rise to a trend in localization for the automotive industry. Geo-mobile marketing is one of the newest and most effective lead generation and service retention strategies today as it enables dealerships to effectively connect with customers and active buyers directly through their smartphones – at the moment when they are ready to buy a car or schedule a service.
Similar to geofencing, geo-mobile marketing allows dealerships to set up a virtual perimeter around their location as well as competitor lots. When customers and potential buyers pass through the perimeter, they trigger a timely and personalized message alert to their smartphone, enticing them to visit the dealership.
Geo-mobile marketing goes one step further by offering a ‘gamified’ experience that appeals to customers and prospects with an effective call-to-action into the dealership’s sales or service center. The action takes place on the consumer’s phone and is purpose-built to promote participation such as a digital “scratch and win,” a loyalty reward, a virtual tour, a digital coupon, or a pop-up sales event. Gamification differentiates the dealership experience by motivating the prospect and customer to take action in the form of visiting the dealership, redeeming an offer, purchasing a vehicle, and scheduling a service.
Geo-mobile marketing alerts the dealer’s sales and service staff when prospects are visiting a competitors’ lot and prompts them to initiate a timely and personalized follow up based on detailed analytics on the name of the buyer, the dealership they’re visiting, and time of day. Timing is of the essence. With this critical insight, dealerships can boost local awareness among prospects looking to purchase a vehicle and retain customers looking to schedule a service appointment.
- MOBILE – Transform Fixed Ops into a Profit Center
In today’s ultra-connected world where everyone has a smartphone, offering a mobile-responsive website is not enough to effectively engage and serve customers. The challenge for dealerships is that they lose that one-to-one connection once a prospect or customer leaves the website. With a flattening automotive retail market and a growing trend of 70% of the service business going to chain and independent service centers, this represents an enormous missed opportunity not only for additional service revenue but for building loyalty and long-term customers.
It’s all about staying connected and improving the lifetime value of a customer through an enhanced mobile experience. For customers, they prefer the convenience of scheduling a service and paying for repair orders from their smartphone; they appreciate the peace of mind that they get with one-touch call roadside assistance, and they are keen to visit the dealership and save money with digital coupons and loyalty reward programs. These mobile app capabilities help dealerships to improve service retention and transform their fixed operations into a significant profit center.
For potential buyers, a mobile customer engagement app not only reduces on-foot research that is traditionally required when purchasing a car but also provides shoppers with productive tools and relevant information at their fingertips. That includes comparing makes, models and pricing, watching videos, visiting review sites, engaging staff in live chat, and contacting dealerships to arrange test drives.
Keeping a potential buyer engaged at each stage of the purchase process is critical to winning the sale. Even more so as showrooming is becoming an increasing concern for dealerships – where car shoppers are trying out your cars while searching for the best price on their smartphone. To mitigate showrooming, dealerships can use on-lot beacons to digitally engage shoppers as they walk the showroom floor with on-site information of their preferred vehicles; they can publish mobile discounts and incentives in a compelling and unobtrusive manner; and they can intrigue shoppers with effective digital call-to-action tools such as a scratch-and-win mobile game where the prize can only be redeemed in-store. This immediate and personalized level of mobile engagement will improve a shopper’s experience and increase the likelihood of making a sale, particularly when the presence of a shopper at a dealership already increases purchase intent by a higher margin.
Similarly, digital follow-ups conducted during the decision-making process and throughout the customer’s vehicle ownership lifecycle help dealerships to increase customer acquisition and improve service retention. Dealerships can send post-sale mobile follow-ups to drive loyalty and engagement. Fixed operations managers can improve service retention by marketing directly to their existing customers with regular and automated mobile notifications regarding their service and maintenance schedule. Targeted mobile engagement empowers fixed operations to directly connect with customers in real-time, increase service appointments and nurture long-term relationships.
Leveraging mobile tools gives dealerships the opportunity to better connect with a new generation of vehicle buyers, differentiate their experience, and create customers for life. Dealerships that embrace a mobile strategy that engages customers at every stage of their buying journey and vehicle ownership lifecycle will increase customer acquisition, improve service retention, drive storewide profitability, and gain the ultimate competitive edge.
Author: Tony Della Busa
Tony della Busa is the president and CEO of Mobile Dealer, a leading provider of Mobile Customer VIP, OBD Mobile Diagnostics and Geo-Mobile Sales solutions for auto groups. With the power of mobility services, Mobile Einstein helps dealerships to increase customer acquisition, increase monthly service appointments, drive storewide profitability, and enhance the buyer & customer experience.