It has often times been said by dealers that “everything begins when you sell a car.” However, is this term still true into 2018? Is it worth dealers cutting deals and losing cash on an initial sale, with the hope and expectation that the dealer might pick up a service customer?
Some say that merchants could have it in reverse. Dealers are investing 80 percent of their energy and strategy into the piece of the business that returns 20 percent of their revenue: sales.
When actually, fixed operations speak to approximately 15 percent of automotive dealer income. However, focusing on the maintenance of vehicles is scarcely on the radar of numerous automotive dealerships.
Most dealerships focus on sales because that is the means by which they achieve the highest return in the shortest amount of time. It’s the lucrative but more fun side of the business. It’s where sales-people learned a crucial skill: how to negotiate with the processing plant as well as haggle with the consumer.
One of the best tactics to ensure consistent revenue, is to provide the customer with incredible service. This keeps the dealership clients satisfied, and thus they continue to take their next car back to the service department in which they are satisfied, regardless of whether they bought their car from that particular dealership or not.
Auto resale services such as CarMax won’t repair the cars that they sell. Neither will a dealership like Nissan that became tied up with Nissan’s high-volume sales technique, and doesn’t have the accompanying service capacity.
Throughout the coming three years, many predict that the dealership’s prosperity will depend less on the number of new vehicles they offer, and more on the number of client pay repair orders they satisfy- as well as how well they deal with and leverage their inventory.