For years, the service lane has been relegated to the back of the dealership. The sales department was often regarded as the glamorous department, characterized by quick deals, high commissions, and flashy, low-mileage vehicles.

But given the economic climate of tariffs on new cars, supply chain disruptions over the years, low inventory of used cars, and renewed attention on the service lane, is this the service lane’s moment to shine?

Dealer groups putting service in the sun

Big dealer groups are shifting the sunlight to the service lane. Lithia & Driveway CEO Bryan DeBoer said in their Feb. 12 earnings call that they have issued a challenge to their after-sales leaders to reach higher. It’s not a tech shortage issue; it’s a mindset issue among the organization’s advisers. DeBoer essentially said anyone not on board with the shift to a stronger parts and service department is not a member of the team and won’t be around for long.

Economic headwinds in the sales department

As I have written about in the past, with the impact of tariffs expected to be felt later this year, according to Fed Chair Jerome Powell, and the lingering low inventory of used vehicles due to shutdowns and supply chain issues during the COVID pandemic, margins and profits in the sales department are likely to be squeezed.

This means there are increased opportunities in the service lane to generate revenue and make up the difference. This is not only beneficial to the service lane but the dealership as a whole. Customer retention through the service lane will also become more vital. If a customer takes their vehicle to the dealership from which they purchased it for service, there is a 72% likelihood that they will buy their next vehicle from that store. Retention that repeat business is key in the service lane to overcome the challenges from tightening economic factors.

Having the right tools

So, what can your dealership do to put your service lane in the sunshine? First, training your advisers is crucial. Are they keeping open and honest lines of communication with your customers? They should instill trust in your customers so that they come back not only for a service visit but also as part of the 72% who come back to purchase a vehicle.

Most importantly, do you have the right tools to keep your customers, techs, and advisers all happy? If you are still using paper in the service lane, you might be causing frustration and a lack of clear communication with your customers. Certain older generations may prefer paper, but younger ones, in their prime buying years with decades of vehicle purchasing ahead of them, such as millennials and Gen Z, like texting and mobile-friendly updates that they can view on their phones.

Make sure you have a strong software program in your service lane that provides timely updates, open communications that they can view on their phones (phone calls are dead, by the way) and gives them a clear and transparent view of the work completed and the work their vehicle may need to keep it safe and running.

Keeping your service lane efficient will also speed up the repair time and keep your customers happy. Having the right software that can be easily passed from one technician to another keeps the process moving quickly, efficiently, and most importantly, with the right data to avoid costly mistakes.

The sunlight is certainly shifting to the service lane. With big dealer groups doubling down on the importance of revenue from parts and service, and economic headwinds putting a strain on the sales department, now is the time to ensure you have the right tools in your service lane to facilitate smooth, efficient, and transparent communications with your customers. Doing so will make sure you are basking in the sun rather than staying in the shade.

 

Euwart Anderson is GM of Vehlo’s Dealership Division