Maximizing customer loyalty starts the moment a car pulls into the service bay. On today’s episode of Service Drive, Peter Cooper, president and CEO of Lexus of Lehigh Valley, shares insights on how dealers can strengthen their service departments, retain customers, and maximize profitability.
Today’s automotive market is challenging yet full of opportunities. While new and used car sales remain crucial, the fixed operations department behind the showroom plays a pivotal role in profitability and long-term customer loyalty. Affordability continues to influence purchasing and service decisions, even among higher-end Lexus customers. Cooper emphasizes that value perception matters across all socioeconomic segments, particularly in used vehicles and service departments.
Customer experience in the service drive is a critical focus. Industry retention rates for warranty customers are often below 30%. Long wait times, misaligned appointment scheduling, and the transactional push to sell additional services often alienate customers. Cooper stresses that creating a seamless, convenient service experience builds trust and encourages repeat visits, which in turn drives long-term revenue.
"How do we take those 5,000 and 10,000-mile services and really show the customer how great we can be?"
Technician retention and recruitment are key challenges. There’s a growing gap between the aging workforce and the skill sets of newer technicians, who are increasingly focused on computer diagnostics rather than traditional engine work. To attract top talent, Lexus of Lehigh Valley invests in competitive pay, flexible scheduling, and modernized facilities, including upgraded locker rooms and climate-controlled workspaces. These improvements aim to make the dealership a desirable place for skilled technicians, even in a market where thousands of bays remain empty nationally.
While tire sales and other maintenance items may not yield the highest margins, the real opportunity is capturing customers with vehicles five to seven years old. These customers are often focused on repairs rather than routine maintenance, and dealerships that offer transparent, convenient, and fairly priced solutions can capture loyalty and revenue over multiple service visits.
He underscores that service absorption rates at Lexus can vary widely due to the rapid growth of variable operations. Even when the first two services are provided for free, many customers do not return. He views these services as opportunities to demonstrate exceptional care and quality, reinforcing the long-term value of the brand.
One car sale can generate 16 service-related transactions over a vehicle’s life. Investing in convenience, pickup and delivery services, and consistent quality builds customer trust and multiplies revenue far beyond the initial sale. Lexus of Lehigh Valley continues to focus on human capital, modernized facilities, and customer-centric service practices to maintain a competitive edge and maximize lifetime value.
