Stop Focusing (So Much) on Digital Retailing! Here’s How to Solve Your Dealership’s Pandemic Woes

All | June 9, 2021

Author: Joe Richards, Head of Product Marketing

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The wild ride for the automotive industry continues as vehicle production slows down and dealer inventory continues to shrink. The demand had already been rising, pushing new vehicle prices to their highest average sale price in months, finally exceeding $40,000 in April and used vehicle prices rising to a staggering 10%—the largest one-month increase since the series began in 1953.

The timing couldn’t be worse. Shoppers with savings and stimulus checks are ready to buy and returning to the lot.  Dealers need to ensure they have a plan to continuously source inventory, as outlined in my previous blog, but beyond the front-end, we’re seeing regular maintenance continue to recover as more drivers are returning to the road. To get through this volatile period, dealers must refocus their marketing efforts on Fixed Ops to boost revenue with a goal of a high or full 100% absorption rate.

Market your Service Department similarly (or better!) than inventory sales


Today’s unique challenges need to be met with fresh ideas. Typically, dealerships allocate most of their budget to push vehicle inventory. But with low inventory and recent projections estimating that this chip shortage will last through 2022, possibly into 2023, it’s time to change course. With fewer opportunities to sell comes more opportunities for service, as those who don’t want to purchase at a higher price wait out this period with their current vehicles.

Start with consistently communicating your dealership’s unique selling proposition (USP). Consumers need to understand why they should work with you and not the competing dealership, independent repair facility, or tire center down the street.  Research offerings from the competition and make sure to differentiate yours—not just cost and coupons.  Refocus messaging and start promoting your unique offerings, such as pickup or delivery options, flexible payment options, easy recall repairs, and more.

Affinitiv clients have successfully leveraged unique and targeted communications that have been proven to drive service lane business, customer satisfaction, and retention.  One of the most effective solutions is Affinitiv’s dynamic, digital communication, which creates a monthly, consumer-centric experience. By engaging the consumer with targeted 1:1 messaging, including service history, current incentives, and even equity positions, this solution has been proven to add an average of $7,000 in additional dealership revenue. OEMs, dealer groups, and dealers alike have seen success leveraging this solution to help grow their business. 

Execute an exceptional customer experience so memorable, it creates rave reviews


It’s no secret: word of mouth is its own form of currency in today’s world, creating or dissuading new and retained business. NADA research shows that with a 70% customer retention level, dealers can expect a 90% or better fixed absorption rate.  Dealers must work to retain the customers they have and work to win back lost customers. Ensure you provide a service lane experience that’s so good, consumers are moved to tell their friends, family, and colleagues about it. As Walmart Founder, Sam Walton, once said, “There is only one boss: the customer.” 

Another way to delight and retain today’s critical consumer is to create a frictionless experience.  Communication is key, and with today’s technology, most communications can be sent digitally to keep all parties informed and happy. Take advantage of services that streamline the overall workflow, like online service scheduling, service reception, communications throughout maintenance, and more.

Once the service visit is complete, encourage consumers to post about their outstanding experience on social platforms and start to cash in on this social currency.

Increase fixed operations revenue


When it comes to inspections, make them worth your while. MPI, Affinitiv’s Multi-Point Inspection tool, provides users with comprehensive inspection reporting including at-a-glance stats for each advisor and technician, monitoring all current MPI statuses at any given time, and filters options by workflow events. Aiding a frictionless, digital experience, MPI offers real-time RO status updates via the app, SMS, and/or email to generate fast approvals for your team and provide a world-class customer experience.

While some may think recalls create a disadvantage, dealers can actually earn more trust with their customers by alerting them to updates that will lengthen the life of their vehicle or create a better ownership experience. Use a service like Open Recalls to stay armed with the latest recall data, so your service advisors can increase ROs and create higher customer satisfaction.

Lastly, by prioritizing efficiency, dealers can operationalize opportunities for revenue. Ensure totally optimized service bays by establishing new KPIs to understand productivity and uncover what needs to improve.  If this method isn’t already in place, connect appropriately skilled technicians with work that matches their skillset. This will totally transform service department operations and ensure customers receive the best experiences, creating more opportunities for return business.

While we can’t totally predict the future, all signs point to a bumpy road ahead. To weather the storm, it is critical for dealers to focus on the areas that will drive revenue now, and do so before the competition does. With the supply levels dropping and a volatile market nearly here, Fixed Operations has the power to keep revenue flowing by driving consumer loyalty and repeat business.


Ready to take action? Affinitiv’s data-powered solutions can help grow your business right now. Contact us today to learn how!

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