By Larry Berg, Senior Vice President, Valassis Solutions
Published Friday, Aug 26, 2016
These days auto dealership service departments aren’t always the first place vehicle owners think of for an oil change or tire rotation. With a plethora of local options including quick lubes, repair shops and tire stores to choose from, consumers often forego the dealership for their servicing needs. This competition and ease of access to multiple service choices pose a challenge for dealerships to grow their service business, and often force them into protect and defend mode in order to hold their own in the service category.
To determine what strategies dealerships might use to overcome these obstacles to win and grow market share, we’ll review a few facts first.
Dealership Services – Some Quick Facts1
Over three out of five transactions made in the automotive aftermarket were for Do It For Me (DIFM) services and these top services account for 50 percent of transactions:
Oil changes are the most common type of dealership service (24 percent share of all service transactions).
Dealer share is skewed to newer vehicles:
Repair shops dominate in most major repair-oriented services including brake and tire repair or replacement.
Oil Change Challenge: Although oil changes are the most common type of dealership services, sales are threatened by quick lube businesses.
Solution: Defend your current oil change business and retain customers by leveraging hyper-local, omni-channel advertising that highlights the reasons consumers select dealerships for oil change services-- provide warranties, maintain vehicle service histories, cleanliness of facilities and incentives such as coupons/special offers.
Vehicle Age Challenge: More than half of dealer service share is skewed to newer vehicles with service at dealerships tending to decline as autos age.
Solution: Identify and reach car owners of older vehicles with messages and offers designed to meet their needs and budgets. For example, target those age 16-24 with moderate to low incomes who own aging vehicles1 and live within a 5-mile radius of your dealership. These consumers are more likely to research auto service options online so be sure to include digital advertising in your marketing plan. Extend your investment into in the future by targeting millennials as well.
Category Roadblocks Challenge: The brake service category is typically dominated by repair shops who also lead in most major repair-oriented services.
Solution: Win additional customers by competitively blunting around local repair shops with personalized print that includes category-specific messaging focused on brake service, engine repair, tire rotation/replacement/repair and other leading service areas in which increased market share is desired. Complement this strategy with dynamic mobile digital advertising to take advantage of location-based targeting.
Dealership Services Success: A Real-life Example
Recently, a well-known automotive dealership group presented the challenge of the need to mitigate declining service orders and revenue. With a minimal per-dealership investment, the client needed to see fast, tangible results for participating dealers.
To meet client objectives, an omni-channel approach combining print and digital was recommended. Customized print was targeted to individual households with digital display and dynamic mobile ads overlaid to reach those in and around dealership locations.
With a 14-day print deployment period and a 30-day digital deployment, the results were outstanding. Participating dealers saw:
By utilizing data insights, hyper-targeted inserts, personalized messaging and digital engagement, we are successfully driving sales for our auto service clients. Auto dealerships and their service departments can reap the benefits of utilizing intelligent media delivery to reach and engage their audiences at home, work and on the go.
Merging real-time behavioral data, demographics, past purchases, web/app behaviors, device location and online and offline data, can help auto dealers locate, reach and activate their target consumers.
For a recent example how this worked for a major dealership service department click here.
1 The NPD Group/Car Care Track- as of June 2015