Focusing on OE Parts and Service to Sell New Vehicles

Increasing Parts and Service Retention can lead to $5 billion per year in added parts sales and a 2% increase in vehicle sales.

Customers equate durability to vehicle quality.  So, an increased focus on fixed ops not only expands revenue, it also improves customer perception and repeat vehicle purchases. 

Unfortunately, automakers and dealers focus on short-term metrics that waste revenue and frustrate customers. 

Parts and Service Retention Sells Cars

Great Service Helps Sell New Vehicles

Increasing dealer fixed ops retention is the most effective way to sell more new vehicles.

Automakers invest billions of dollars in new advertising per year with the OE community spends on average $1000 per vehicle sale.  However, a focus on customer parts and service retention can help reduce this expenditure while increasing revenue.

Automakers spend considerably less on parts and service.  While dollars are spent on service retention, these efforts often lack substance, focus, and favorable outcomes.  Only 18% of customers currently take advantage of OE parts and service, despite these investments. With results like these, it’s amazing there are any investments at all in OE Parts and Service.

But parts and service investments are important and strategic.  In addition to increased revenues, improving service retention also increases customer interactions, leading to stronger relationships, and better informed, more satisfied customers. These outcomes enhance the vehicle ownership experience, leading to a more focused, less-costly new vehicle sales process. 

Using Parts and Service to sell New Vehicles

Automakers must focus on fixed ops if they want to sell more vehicles.  Studies show that the most effective way to sell a vehicle is by offering an exceptional customer ownership experience.  

Customer ownership, in this context, encompasses more than ride, comfort, and quality.  It also includes the experience people have when they get their vehicles serviced or repaired.

If your customers are not servicing their vehicles at your store or within your network, then someone else is influencing their ownership experience. Capturing subsequent sales from these customers is difficult, requiring a significant advertising and marketing push.  


Most Repairs Happen in the Aftermarket

Automakers rely heavily on the aftermarket to provide their customers an exceptional ownership experience.  With only an 18% customer retention rate, existing automaker service retention strategies are falling short.  The results: OE dealerships lose out on parts and service dollars and fail to influence the ownership experience.  After years of automakers focusing on customer retention, little has changed.  It’s time to think outside the box.

At 3NG Consulting, we have a long history of working for and with automakers.  We understand the issues and the limitations; our insights are based on real-world experiences that come from designing, implementing, and managing programs and solutions that address OE parts and service needs and serve to recapture service traffic.   

Automaker Consulting Insights

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