To ensure a steady flow of fixed-ops dollars, your dealership’s marketing and advertising strategies have to grow and adapt to consumer trends. Here to discuss how dealers can integrate fixed-ops into their digital strategy is Andy Macleay, Director of digital marketing for Dealer.com. Andy discusses how, from a digital marketing standpoint, a dealership’s service and parts department can be one of their most important profit centers, with about 50 percent of a dealership’s profitability coming from these service departments, and up to 10 percent of all service customers being well-qualified sales leads.
With increasing amounts of sophistication within digital marketing, relating to both technology and car dealers themselves, a very large portion of that sophistication has been focused on merchandising inventory. So Andy says that it’s no mystery that there is a very large opportunity, not only from a profitability side but also from a selling standpoint, within the dealership’s service departments. Andy states that from their Cox automotive service study in 2018, they discovered that 74 percent of people that purchase a vehicle and then have that car serviced within a 12 month window, are more likely to buy from that dealership again; showing just how important it is to pay attention to your service departments, because they can be just as important to selling as a showroom.
To hear more from Andy check out the full interview above.
VIDEO TRANSCRIPT:
Jim Fitzpatrick:
Hi, everyone. Thanks for joining us on today’s show. To ensure a steady flow of fixed-ops dollars, your dealerships marketing, and advertising strategies have to grow and adapt to consumer trends. Here to discuss how dealers can integrate fixed-ops into their digital strategy is Andy MacLeay, director of digital marketing for Dealer.com. Welcome back to the show, Andy.
Andy MacLeay:
Hey, thanks so much, Jim. It’s always great to be on CBT News.
Jim Fitzpatrick:
Let’s kind of jump in here. What’s one area that dealers can focus on to increase revenue, as the new car retail market plateaus a little bit?
Andy MacLeay:
Yeah, yeah. We’ve noticed as well, sales have sort of plateaued. And one of the areas that we see as a big opportunity for dealerships really has to do with the fixed-ops side of the house. Right? And I think that, as digital marketers, we’ve really increased our sophistication, as car dealers, as technology companies throughout the years. But a pretty big portion of that has been focused on merchandise and inventory. And so, for us, what we see, it’s no mystery, right, that the service shop and the part shop, those are all extremely important profit centers for dealership. Up to 50% of their profitability comes from those back of the house operations.
Andy MacLeay:
And so for us, we see this as a really big opportunity. And it’s not only a big opportunity from a profitability side, sort of protecting the business itself, but it’s also a great opportunity to sell cars, right? So, we know that 74% of people that purchase a vehicle and then have that car serviced at the dealership within a 12 month window, they are more likely to buy from that dealership again. And that is directly from our Cox Automotive service study from 2018.
Andy MacLeay:
So, these are important things to pay attention to. You know, it’s always fun to sell cars and that’s kind of why we’re in the business too, but the service part of the house needs just as much attention, from a digital marketing standpoint.
Jim Fitzpatrick:
That’s right. And there’s not a person out there that receives an RO on a car to have it serviced over 500 or a thousand bucks that doesn’t right away think, maybe it’s time to trade. Right?
Andy MacLeay:
That’s exactly it. Any great general manager sort of worth their salt will know that you can sell a lot of cars out of the service lane. And anecdotally from one of our partners, we had heard just recently that up to 10% of all service customers that come in are actually well-qualified sales leads. So, merchandising the vehicles is fantastic, but also pulling in that local service business, that’s going to be really important for the dealership’s financial health as well.
Jim Fitzpatrick:
Sure. Do dealers do a good enough job marketing and advertising their fixed operations?
Andy MacLeay:
Yeah, it’s a good question. As I mentioned previously, I think that a lot of the digital marketing glory usually goes to moving metal. But the truth of matter is it’s kind of a mixed bag, right? Like I think that this is a very good opportunity for dealers who want to get ahead, right, to merchandise not only their vehicles but also their capabilities inside of the service shop. And one of the great places to do that is to just start with your webpage, right? This is usually an area, if you go on to many dealership websites, that sort of receives the least amount of love in terms of design, and updating specials, allowing for people to know the investments that they’ve made in the facility. So, that’s a really great start.
Andy MacLeay:
And then, after that, you can drive traffic to that page. And you do that through digital advertising. So, for us at Cox Automotive, and more specifically, Dealer.com, we offer a service where we actually will go in and we will modify your service pages, build content for them, get them ranking higher on Google and on Bing. And then, we can also apply very specialized fixed operations advertising campaigns.
Andy MacLeay:
So, for us, one of the great things that we’ve seen is, for just about every one dollar in marketing funds that you spend for digital advertising, we’re seeing, on a conservative side, a five dollar return in our RO’s. So, that one to five ratio there, that pans out very quickly if you’re doing things right.
Jim Fitzpatrick:
Sure, sure. What are some of the best practices dealers can use when incorporating fixed operations into their digital strategy?
Andy MacLeay:
Yeah. So, one of the great things about this is, you really need to continually kind of update your content to that webpage. And so, one of the things that you can do is you can advertise things like, what are my tire specials? What are my seasonal changes? And in Atlanta right now, you guys are roasting down there, so I would imagine that AC service and repair on a vehicle would be a really good sort of seasonal special to run. And all of those things sort of culminates into what would be an overall larger experience from the service side.
Andy MacLeay:
And so, one of the great things that we know is, Google says almost 80% of all service related visits started in the digital environment. So, people are out there searching on Google, they’re looking for you as a dealership. And what you want to do is you want to appear there, right? You don’t want to get beat by maybe an independent shop or one of the large national service chains. It’s really the dealer’s ballgame to capture that. And the great part is they already have, generally, a staff in house that understands how to do digital marketing. It’s just a little bit of a different shift to do that for focus for fixed-ops.
Jim Fitzpatrick:
It’s usually the case where a dealer will go on to his phone or her phone and type in oil changes or tires, like you just mentioned. And their dealership won’t come up until maybe the fifth or sixth page on Google. Do you find that to be the case?
Andy MacLeay:
Yeah, I mean that can be the case. Right? And I think that there’s a number of reasons, I think, for that. Like we kind of talked about before, the merchandising of vehicles and the advertising of vehicles, that sort of occupies a very good portion of sort of the dealers thought process and digital marketing strategy. And there’s good reason for that. The OEM’s provide co-op marketing funds to move those vehicles.
Andy MacLeay:
But we’re seeing now the OEM’s are also coming to the table saying, hey, we understand now that fixed operations is great for brand awareness, and we understand that a tiny bit of investment goes a really long way for these service marketing campaigns. And that’s because, basically, it’s a green field opportunity for these dealers. Generally, local independent shops are not investing a ton of money either to advertise their capabilities or polish their digital web presence. And so, this is really sort of the next opportunity for dealers to grab the ball and really run with it. And I think that they can dominate that because right now we know that dealers leave about 70% of all of the available fixed-ops revenue in North America on the table to those either national chains or those independent local shops. So, huge opportunity for franchise car dealers.
Jim Fitzpatrick:
And you guys at Dealer.com, you handle all of that for the dealer, right? I mean, that’s such a big part of it is to have a vendor that you can say, hey, hook me up on fixed-ops and make sure that I do rank high on Google page one, and so on. Right?
Andy MacLeay:
Yep. Yeah, absolutely. Either through our managed services where we have a very specific fixed-ops product where we have experts in house who will build that content, make those web pages look just as good as the service department looks inside of the dealership. It will reflect the dealer’s personal branding, and it will also adhere to all of the OEM standards that people need to follow. So, we will do that end to end.
Andy MacLeay:
And then, we have the world’s best technology for digital advertising. This is specifically purpose-built digital marketing technology for the service lane and for moving cars.
Jim Fitzpatrick:
I agree. Dealers that are listening, fixed-ops directors that are listening, pay attention to what your digital footprint looks like, with regard to your fixed operations and your service centers. Some of you do a very good job, but I know that I think the vast majority leave a lot on the table in this specific area. You want to learn more? Give Andy MacLeay a call, and he is director of digital marketing at Dealer.com, one of the leaders, obviously, in all digital marketing and building sites.
Jim Fitzpatrick:
So Andy, I want to thank you so much for joining us here on CBT news. It is always a pleasure, and very insightful comments today to wake people up and say, hey, you got to pay attention to fixed-ops.
Andy MacLeay:
It’s worth the effort here. We’re really seeing some great results, and we’d love to help out any dealer that would like to polish up their service presence.
Jim Fitzpatrick:
That’s right. Okay. Andy, thanks so much. Love to have you back to talk more about this important topic.
Andy MacLeay:
Yep. That’s great, Jim. Thanks a lot.
Jim Fitzpatrick:
Okay. Thank you.
Andy MacLeay:
Always great to be on CBT.
CBT automotive network, the number one most watched network in retail automotive. This has been a JBF Business Media production.
