For most dealerships, parts and service will be one of the key profit centers of the dealership business. But, the success of your dealership’s parts and service departments should be measured by customer satisfaction as well as profitability.
Your dealership’s reputation is most likely impacted more by your customers’ view of your parts and service departments than just your dealerships’ sales office. Whether you’re an RV dealer, a marine dealer or you’re running a dealership with a variety of products, your dealership’s service department is likely to interact with customers far more frequently than sales. Service is also likely to reach customers when they have an urgent need (i.e., an RV repair, service for their boat, etc.).
While repeat business and new customer referrals can certainly come from an exceptional sales experience, a bad customer experience with your dealership’s service department could take away that advantage. The lifespan of an RV or boat is much longer than the sales process, making the time frame for getting new referrals much longer on the service side of your dealership.
Operating a profitable parts and service department while maintaining high customer satisfaction is a big challenge for any dealership. As dealers manage parts and service, some of the key elements to keep in balance are inventory, scheduling and warranty claims. For example:
• Dealerships need enough inventory to service customers quickly, without locking up too much cash in stocked parts.
• Dealers need to manage a tight service schedule while maintaining the flexibility to handle unexpected demands quickly.
• Dealers need to manage warranty work and claims so it doesn’t box out more profitable work and become a financial drain.
Your dealership’s long-term success depends on constantly managing profitability and customer satisfaction. The most successful dealerships leverage dealership management software, like IDS Astra, to keep these in balance, and the IDS professional services team is available to IDS dealerships to help make the most of their dealership software and leverage the successful techniques used by dealerships across the country.