Why Invest in Service and Repair? Why Now?

Jade Terreberry Portrait
Oct 29, 2021
An open letter to dealers from Jade Terreberry, Sr. Director of Business Development

Estimated reading time: 5 minutes

Dear Dealer, 

You hear me talk a lot about the importance of service and repair. From why this segment of your business can be a huge opportunity during the chip shortage inventory crunch to the trends affecting your fixed ops profits, I am often shouting from the rooftops that you need to lean into fixed operations.  

But you might be asking yourself, “Why service and repair — and why now?” Here’s my answer: 

As you know, it’s tough out there right now for dealerships. Global computer chip shortages and extreme supply chain constraints are wreaking havoc on several industries, including our own. In these volatile times, it’s imperative to retain a multi-pronged revenue approach for the stability of your business.  

Filling the Gap 

Fixed operations makes up over half of the profitability within your stores, and it’s probably only 10% of your marketing investment.1 But until recently, your ability to track and understand where and how you’re making quality connections in the fixed operation space has been almost impossible — so knowing where and how to invest was sort of a question mark. 

At Kelley Blue Book, we recognized this gap and identified these opportunities for dealers:  

  • Give dealers a captive service  audience in their own backyard.  
  • Give dealers a true measurement of quality audience exposure in the fixed ops space.  
  • Allow dealers to grow market share in today’s environment. This digital revolution in how consumers want to connect for their service and repair needs is happening so fast — and it will continue to advance quickly.  
  • Allow dealers to surface real-time, dynamic service specials to consumers who are in-market for service right now. 
  • Allow dealers to pull up in the most robust service, repair, recall, warranty and maintenance search experience for all types of services, without spending thousands of dollars on generic paid search, which only captures a portion of the market.   
  • Help dealers reach today’s customers, giving them a digital billboard to market their businesses. Now that traditional television, billboards, roadside ads and radio ads are less-than-ideal options from a cost-to-value perspective.  

We also said we want to offer all of that at an affordable price, with clear performance metrics and the highest quality low funnel audience in the service and repair space. So we launched the KBB.com Service & Repair Guide, which has seen more than 16 million visits this year so far and 36% repeat visitors.2  

Future-Proof Your Dealership with Fixed Ops 

This market share opportunity is up for grabs for the early adopters; I liken today’s service and repair opportunity to the early days of Instant Cash Offer (Trade-In Marketplace) and given the market conditions, perhaps even stronger and faster than the digital retailing revolution. Now is the time to future-proof your business, and fixed ops is how you do it.  

Now, I want you to shift your perspective for a moment and think about how you buy anything — a house, a car or even a bag of chips. You make your selection based on a comparative market analysis. Although you might not recognize it by name, that’s what you’re doing. You look at all of the available options, assessing what’s in your budget that meets your needs and criteria. The studio beach house is gorgeous, but is it realistic for your family of four? And when it comes to that bag of chips, the Cheetos look good but they only have the family size bag and you’re looking for individual snacks for the road trip, so you’re shifting what you buy to meet what works for your situation.   

I want you to think about your fixed operations marketing spend that same way — and think about what you’re currently doing and what you might change to get ahead now to set yourself up for future success with today’s customers. 

Think about those mailers that cost you a dollar a piece. Half of that dollar is spent on postage and many of the marketing pieces get tossed before they even make it to the household decision-maker.  

Think about the billboard that costs you anywhere from $800 to a few thousand dollars per month. You have no way to measure how many people drove by it, let alone how many people actually saw it.   

Think about paid search. I know plenty of dealers and OEMs that are spending $3,000-$6,000 per month to buy only a small portion of service-related keywords, and in many cases, those budgets are running out mid-month and are completely cost-prohibitive for full scale 24/7 search engine placement. 

Think about ValPak or service coupons you publish. It costs you $800-$1,600 per month to blanket households with a service special that’s outdated by the time they receive it, with no way to target the “ready-to-service” ones in a cost-effective way and no way to reach them again unless you pay for another round of publication. 

 Get Real Time Right Now 

If thinking about any of those tactics made you go, “Hmmmm,” then you’ve taken one step towards the right track. You have to start thinking about your service marketing spend differently today, or you’ll miss the boat on this market share opportunity. You need to set yourself up for today’s market and to reach today’s consumers. Stop wasting dollars on outdated tools and approaches that don’t have the power of Cox Automotive audience data behind them.  

You have a unique ground-level opportunity to connect with the most in-market consumers in your own backyard in the service space. You have the ability to see the exposure and the market data to understand how to win now and future-proof yourself in a way that you never have before.  

You can get those real-time specials in front of the right consumer at the right time, fill those service bays (even ones you may not even have open yet!) and, most importantly, reach a captive fixed ops audience with transparency and tools. By allowing consumers to connect in their preferred way, you’ll create loyal lifetime customers who are priceless to the long-term health and success of your dealership.   

Instead of “why now?” you need to ask yourself “why not now?” and get started today with the right tools and tactics to meet customer needs, gain market share early and set yourself up for long-term success in today’s unstable market and down the road.  

Get started today by visiting https://b2b.kbb.com/ 

Sincerely, 

Jade 

1NADA January 2021 Average Dealer Profile 

2KBB.com Data Analytics Jan. 2021-July