Three key elements to help your car dealership adopt a service-centric model

On today’s exclusive CBT News Power Lunch, we’re pleased to welcome Darrel Ferguson, Director of Performance Management at Xtime, a Cox Automotive brand.

Ferguson begins the conversation by discussing why many car dealerships saw a decline in fixed-ops revenue in 2020 and the beginning of 2021. Due to the pandemic, there was a delay in vehicle service. Cox Automotive data reveals that consumers’ concerns about COVID are notably lower. Throughout the pandemic up to now, only 12% of consumers said that they will continue to delay service. Ferguson says this is an opportunity for car dealers to boost their service business because of this pent-up demand.

In order to meet the demand for service from vehicle owners moving forward, dealers need to give their fixed-ops departments a boost. Three key elements, that Ferguson suggests focusing on include increasing convenience, improving transparency, and building trust.

In order to adopt a service-centric model, dealerships should also emphasize digitizing the experience, says Ferguson. Between text communication and digital quotes, it’s about bringing the customer into the experience. 

To increase convenience further, Ferguson says service pickup and delivery have had success. He adds that incorporating these services takes a significant amount of effort on the dealer’s part and is also a big financial commitment. Studies have shown that 89% of consumers find home pickup and delivery very appealing. 51% of customers who use home pickup and delivery are spending more money to take care of their vehicle. It’s about keeping consumers informed and creating a seamless experience. Over 50% of customers would pay $20 for a convenience fee and, 35% to 40% of customers would pay a $40 convenience fee.

Some practices that car dealerships can readily adopt to create a more transparent experience are texting updates, sending videos, and engaging on social platforms. If dealers include a video and photo with a vehicle listing, they have almost a 100% increase in closing.

To find out more, watch the complete interview with Ferguson above.

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