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(Daytona Beach, Fla. - February 17, 2009) - Once a reliable source of revenue and profits, service centers at dealerships are now facing some of the same challenges that have affected other parts of the business for more than a year. Service centers have experienced significant drops in traffic in recent months along with increased volatility from month to month. DMEautomotive closely monitors changes in service levels and has noticed almost a 7% decline in traffic in the last six months compared to the same period last year. This is by far is the most dramatic decline for service centers this year and a possible indicator of more trying times to come.
While the reasons for the decline may be obvious, reduced consumer spending and fewer miles driven, the solution is less evident. The tendency for many dealers is to cut costs across the board, which often means eliminating programs that work. This is a dangerous proposition for many businesses. Haphazard cost cutting leads to a downward spiral of performance, where less marketing leads to less service revenue, encouraging more budget cuts and the cycle continues.
Our studies of top performing service centers show that they embrace uncertainty and even plan for it. In fact, according to a recent survey we conducted, almost half of the marketing budget for service centers is now unplanned. As the economy continues to impact critical sources of revenue, dealers need to shift more money to unplanned marketing to address unexpected slow periods and keep their staff busy. As you consider your budget for next year, be sure to plan for an on-demand marketing tool, such as DMEautomotive’s new offering called MarketNOW!, which will give you the edge you need to survive these difficult times and position your service business for growth over the next year.
Submitted by Doug Van Sach
Director, Customer Strategy and Analytics
Doug.Vansach@dmeautomotive.com
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