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Vehicle Service Key to Dealership Survival in Downturn, Says Urban Science


DETROIT, December. 15, 2008: According to retail consulting firm Urban Science, automotive dealerships should take advantage of every vehicle service opportunity to help assure their survival during the continuing economic downturn. Service and parts departments have long been profit generators for dealerships. With the recent decline of new car sales and leasing, however, they are now becoming an imperative tool to securing their futures.

"Dealerships are closing in record numbers, and automakers are doing what they can to ensure dealers get the support they need to not only survive but thrive in the current business climate," said Randy Berlin, global practice director at Urban Science. "They can do this by ensuring dealers have the right information to take advantage of market conditions."

Better targeting potential customers with service offers is one way to improve revenue, said Berlin. Customer and vehicle data provided by automakers can help determine the best way to reach potential service customers. Knowing where a dealer's customers are going for service -- and whether they are going to another same-brand dealer -- can help dealerships understand where service efforts and marketing may be lacking. Insight into customer perceptions can also be found by looking at a dealer's relative ranking, based on key dynamics, in a given market.

"With consumers now holding onto their vehicles an average of four months longer than last year, the average age of vehicles has hit 71 months-a big opportunity for increasing customer-pay service work," said Berlin. "The conditions are right for dealers to increase revenue from service to cover fixed expenses."

Tools are available for automakers to provide dealers with a database of customer contact information that includes vehicle information and last service visit. Dealerships can then use this to create customized and relevant marketing efforts that can increase profitability. Urban Science's web-based software program, ServiceSmarts(TM), helps dealers:

Analyze and benchmark performance against national, regional or market standards

Identify customer-pay service opportunities

Market more effectively to the right prospects using tailored customer mailing lists