New vehicle sales are slowing, front-end margins are shrinking and economic experts predict a recession within three years. For auto dealers, these trends require a focus on fixed operations growth as a source for future revenue. Yet obstacles stand in the way, including improved product quality, increased length between service intervals and more competition from independent repair facilities.
In this presentation, Scot Eisenfelder shares proven strategies for growing fixed operations revenue using a two-pronged approach. First, increase service yield from current customers. Most auto dealerships capture just 20-25% of revenue potential from their current units-in-operation and capture less than 50% of work needed on vehicles in their service lanes. The second approach to increase fixed ops revenue is to increase market share. In this session, you'll learn how service conquesting is more cost-efficient than sales conquesting at $40 to $80 per customer acquisition compared to $1,200 per sales acquisition.
Primary Learning Objectives:
- Learn how to operate a razor and razor-blade business model, which will be necessary for an environment where front-end margins continue to decline.
- Shift from using service absorption and service effectiveness as KPIs, to using revenue per units-in-operation ($/UIO), which more accurately measures service profitability.
- Find, attract and retain new service customers to grow market share; particularly second owners in the growing four- to six-year-old vehicle market.