Here at Fixed Ops Digital are honored to have been acknowledged by the people at Fixed Ops Journal this past week! The June issue of Fixed Ops Journal has recognized us for our achievement in boosting service RO’s for the Feldman Automotive Group. The Feldman Automotive group owns 10 dealerships in the Detroit area and we were able to boost their service sales by 32% and increase their website traffic by 60% in just the first 3 months. And here’s how!
How many times can we say fixed operations before it gets repetitive? The reason for the huge success is, in fact, the increase in fixed ops. Originally the Feldman group devoted 95% of their website content to sales, but their Fixed Operations Manager, Matt Grimes admits the increase in fixed ops content has been very beneficial. “It is important to have a balanced website between sales and service.” Our COO Kevin Kulma definitely agrees, stating that, “the best way to drive customers to your service department is by adding more fixed ops content that will not bypass Google’s search algorithms.”
50 percent of dealership revenue comes from fixed operations, yet on average, only about 10 percent of dealerships website content is specific to fixed ops. If Dealerships added to their service marketing it would do great things for their revenue and website traffic. This is a huge hole in the market that we at Fixed Ops Digital are excited to fill!
Digital By Design
From Service-Related Web Pages to Soft-Sell Videos, Dealers Embrace New Ideas
Last fall, Feldman Automotive Group in suburban Detroit substantially increased the service-related content on seven of its 10 dealerships’ websites. They now offer more than 20 pages, up from just one or two previously.
The Web pages address items such as oil changes, tire rotations, wheel alignments, and brake inspections.
After the upgrade, customer-pay revenue at the seven dealerships jumped 32 percent in the first three months of 2019 compared with the year-ago period. (Feldman did not provide dollar figures.) Viewer traffic for fixed ops on the dealerships’ websites has risen 60 percent since last fall, says Matt Grimes, Feldman’s fixed operations manager.
“Without a strong online presence, customers can’t find your services,” Grimes told Fixed Ops Journal. “On most dealership websites, 95 percent of the content is sales-oriented. We’re trying to restore a little balance.”
Adding service-related pages to dealership websites, accessible to Internet search engines, is among the ways that fixed ops managers are using digital technology to build the business as new-vehicle sales and profits stall. From new text-messaging services to videos posted on YouTube, service, and parts departments are focusing more on engaging customers in their preferred digital spaces.
“In the years ahead, the market will favor dealerships that adapt to digital marketing technologies,” predicts Denise Chudy, general manager of LivePerson, a messaging platform provider. “Dealerships that lean in will win the business, and those that don’t will be left behind.”
Content is king
The Feldman group worked with Fixed Ops Digital, a Denver-based marketing group that creates customized, service-related content for dealership websites. The firm has about 200 dealership clients, says co-founder Kevin Kulma. He would not discuss what the company charges dealerships.
“About 50 percent of dealership revenue comes from fixed operations, yet on average, only about 10 percent of dealerships’ website content is specific to fixed ops,” Kulma says. “Most OEMs don’t mandate any service-related content, so dealerships more often than not put up a bare minimum of pages and then let it be.”
But if dealerships don’t create pages to sell new tires, brake pads, and wheel alignments, Kulma says, Google’s search algorithms bypass them in favor of aftermarket retailers whose websites include the content that consumers seek.
“If dealerships invested just a fraction of their overall marketing budget toward building content,” he says, “they’d capture a lot of search traffic that otherwise goes to those large independents,” Kulma says.
Erica Danford, vice president of managed services at Dealer.com, a digital marketing arm of Cox Automotive, concurs.
“The more pages devoted to fixed ops, the better,” she says. “The better the information is portrayed on the website, the more likely dealerships are to convert shoppers to customers and develop brand loyalty to the dealership. This concept is pretty new to fixed ops service managers. We need to bring that part of the dealership up to speed.”
Dealer.com’s managed services team creates fixed ops website content for more than 4,000 dealerships. For $599 a month, a dealership gets eight new pages of fixed ops content monthly, Danford says.
Dealerships’ websites must be transparent about service pricing, Kulma says. Many consumers don’t go to dealerships for maintenance and repairs because they fear they’ll get gouged, he warns.
“Would you buy something from Amazon if the price wasn’t shown?” he says. “Almost every dealership has a menu pricing board hung in their service drive. It only makes sense to do it on websites, too. And you need to emphasize that dealerships offer OEM-certified parts and technicians, which independents can’t match.”
Because a Google search’s algorithm treats prices as highly relevant data, adding price information boosts a dealership’s search rankings, he adds.
Text me, please
Dealerships’ digital service marketing also should include text messaging with customers, says David Foutz, vice president of sales for Xtime, Dealertrack and Kelley Blue Book, brands owned by Cox Automotive.
A customer service survey conducted by J.D. Power in 2017 found that 67 percent of respondents said they would return to a dealership for service if they got text updates about the vehicle’s repair status. That figure dropped to 55 percent when the service department communicated by phone, Foutz says.
“Only 3 percent of consumers who get their car serviced receive text updates,” he notes. “Imagine the financial impact of a 12 percent increase in customer retention, just by using texts instead of phone calls.”
An Xtime platform called Spectrum, used by more than 7,200 North American dealerships, applies digital technology to service lane efficiency. A Spectrum module called Invite can help develop digital marketing campaigns aimed at filling service bays during cyclical business lulls, Foutz says.
“Maybe you offer 20 percent off any kind of service on Thursday afternoons, targeted to people who came in once but haven’t returned for 12 months,” he says. “That way, you’re not stealing away full-price work on Saturday mornings when you’re already too busy to serve walk-in customers.”
Another module, Engage, helps service advisers manage the check-in process via a tablet computer, allowing customers to review repair histories and other data with advisers. The software also allows advisers to text service updates and photos to customers and obtain prompt service approvals, Foutz says.
Quick approvals are also a goal of LivePerson Automotive’s service texting platform. On average, fixed ops departments that use the platform get customer approvals within four minutes, and phone calls between the service department and customers drop by 30 percent, Chudy says.
The monthly fee for the text service ranges from $495 to $995 a month, depending on the size of the dealership. LivePerson’s Chudy declined to say how many dealerships subscribe to the platform.
Texting also helps dealerships increase consumer satisfaction scores and boost customer retention, Chudy says.
“When you communicate with and make it convenient for customers, they’re more likely to stay with you three or four years down the road when their [factory warranties] expire because you’ve built relationships,” she says.
LivePerson’s texting platform enables customers to get their vehicle appraised during a service visit. The feature generates 10 to 60 additional appraisal requests at a typical dealership each month, she says.
D.J. McMahon, service director at Mercedes-Benz of Tuscaloosa in Alabama, says he initially was skeptical about using texting to communicate with customers.
“I didn’t think it would make that much of a difference, but it definitely has,” he says. “It’s been amazing to see. I honestly don’t know where we’d be without it.”
The service department has used a texting program developed by myKaarma for four years at a cost of around $2,000 a month, McMahon says. Customer approval of additional service work recommended by the dealership is about 25 to 30 percent higher than before it adopted the texting technology. McMahon cites the ability to text customers photos of, say, worn brake pads or tires.
“That gives customers confidence about making a decision, and we get approvals faster, too,” he says. “Before, when we’d call people to get approval for recommended service, they’d often say, ‘Well, I’ll think about it.’ That usually means they’re going to call someone else to see if they can get a better price. Texting changes the whole dynamic.”
McMahon notes that his service department posted record sales and gross profits in seven months last year. “That wasn’t totally from texting, but it certainly had a big influence,” he says.
The digital marketing push at Cable Dahmer Automotive Group, which operates six new-vehicle stores in metropolitan Kansas City, Mo., includes posting dozens of online service videos, says Jeff Vaughn, the group’s chief marketing officer.
“A lot of dealerships try to be everywhere [in service marketing efforts] and they do a poor job,” Vaughn says. “We narrowed our focus to a larger website presence and using YouTube and Facebook.”
Cable Dahmer’s YouTube channel features more than 30 service-related videos that are more educational than sales-oriented. Topics range from the benefits of wheel alignments and cabin filter replacements to how to check tires for tread wear.
“The videos are effective, and there’s no cost,” Vaughn says. “They do more than just advertise a cheap oil change. It all goes back to building relationships with consumers.”
Vaughn recommends selecting a service technician with a “goofy” personality who enjoys being on camera to star in a service department’s videos. At Cable Dahmer, the star is Marc Miller, shop foreman at Cable Dahmer Buick-GMC of Kansas City.
“At first he was the only one brave enough to help us create this content,” Vaughn says of Miller, who exudes a good-humored, high-energy vibe in the videos. “Now other techs and advisers do it, too, thanks to his example.
“Someone like that puts a better face on a dealership than a general manager in a fancy suit, wearing a fancy watch.”
Mail Marriage: Dealer Group Melds Digital, Print Service Pitches
Cable Dahmer Automotive Group has shifted heavily into digital marketing, including for fixed operations, over the past four years.
But it hasn’t abandoned old-school marketing tools such as direct mail.
To the contrary, the six-dealership group in Kansas City, MO. spent about $500,000 last year to buy a print shop, enabling it to produce direct-mail pieces in house, says chief marketing officer Jeff Vaughn.
“We’ve married our traditional direct-mail campaigns with digital strategies,” Vaughn says. As a result, he notes, mail pieces aimed at retaining service customers that used to get a 1 percent response now show response rates of 8 to 15 percent. He adds: “Plus, we’re saving about $50,000 a month in printing costs.”
About half of the group’s marketing efforts are aimed at service customers who declined dealership-recommended maintenance and repair work.
Within 24 hours of refusal, the dealership emails the customer a message with a link to a video reminding them of the importance of the declined service – replacing a dirty cabin air filter, for example. The dealership follows up with a direct-mail piece including a coupon for the recommended service, Vaughn says.
If there’s no response to that approach within two weeks, those customers get another email with a video link and another mailing with a discount offer.
The group’s dealerships use a decidedly low-tech system to decide which of its service discounts work best.
“We put cardboard boxes behind all our service advisors, and when a customer presents a coupon, the advisers toss them into their respective boxes,” he says. “Then we count to see which coupon got used the most.
“All those shiny [marketing] toys are fluff if they don’t drive additional traffic,” Vaughn adds. “You just need to own the basics and do the basics.”