For weeks, virtually everyone in the automotive industry has been talking about chip shortages and how they will impact different facets of the sector – from OEMs to dealerships and consumers. Today, we spend some time digging specifically into fixed-ops and how car dealerships should leverage this side of the house as a way to increase profits. Joining us on the show is Jade Terreberry, Director of Dealer Sales Analytics for Cox Automotive.
Terreberry starts off the conversation by stating that the time for fixed-ops to shine is now. Amid historic inventory crunches, Terreberry believes car dealers can create more revenue opportunities in fixed-ops and increase their market share. Car dealers need to focus on the most effective strategies, like connecting with customers online, in order to gain that service market share.
Terreberry goes on to explain that 33% of consumers intend to drive their vehicles and put more miles on them this year, than any year leading up to 2021. She also says that 41% of consumers have summer travel plans and intend to use their vehicle as a means of transportation to get there. For car dealerships, this means that the potential size of their total addressable market for fixed-ops, service repair, and recall business is getting ready to be bigger than it has ever been before.
Today, the majority of consumers spend a lot of time online comparing and researching companies they want to do business with. Terreberry says car dealerships can give their service departments an advantage by jumping in feet first and adopting the right online strategies to get in front of consumers. Having only 10% to 15% of your investment in fixed-ops is okay, but Terreberry adds that car dealers have to use their investments in the correct areas. Consumers aren’t going back to the way things were.
Right now, Terreberry says, either car dealerships have to get creative in their fixed-ops marketing strategy or risk losing valuable customers. She says that every tenth of a point of a market share you lose or gain right now, is revenue stability that will take you through the upcoming quarters of uncertain inventory levels on the variable ops side.
Terreberry ends the conversation by saying, car dealerships need to stay top of mind for consumers, but the lifetime value of consumers is what is most important.
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