3
Dealer revenues (hypothesis)
500 new vehicles sold by a dealer in a year
represent 15 000 000 $ revenues for one year
70% revenues from the sales department (10 500 000 $)
30% revenues from the service department (4 500 000 $)
represent 15 000 000 $ revenues for one year
70% revenues from the sales department (10 500 000 $)
30% revenues from the service department (4 500 000 $)
For a current service
retention at a low 25% (industry average)
Since anticipated 2009 revenues will surely decrease, a dealer will need to compose with it’s customer base and increase the service retention.
Since anticipated 2009 revenues will surely decrease, a dealer will need to compose with it’s customer base and increase the service retention.
« It is more profitable to put in place retention
initiatives for current customers rather than deploy enormous efforts to find new ones ».
Let
us suppose that we increase retention to 35% ( +10%),
then the total
service revenues would be 4 950 000 $,
an increase in service revenues of 450 000 $
and by consequence, total yearly dealer revenues would be 15 450 000 $
an increase in service revenues of 450 000 $
and by consequence, total yearly dealer revenues would be 15 450 000 $
500 new vehicles sold in a year in four years
= 2 000 vehicles in
the DB
(four year old vehicles are very profitable for a service department, ex: timing belt )
Fees for ServiNet CRM :
50¢ per vehicle per month = 12 000 $ per year
Net additional year revenues of 438 000 $