Introduction
Your dealership likely has segments of target customers for your service department. There are new vehicle buyers to consider, along with existing clientele and conquest customers all on your radar. However, you might be missing out on an important segment of drivers who deserve your attention, those with high-mileage vehicles.
There are common and often underutilized upsell opportunities for customer pay (CP) work for cars with over 60,000 miles, as keeping a high-mileage vehicle on the road requires much more attention to scheduled and preventative maintenance than models with fewer miles. In our experience on service drives across the country, many service departments aren’t set up in a way that has the most experienced service advisor taking care of these vehicles. This presents an opportunity for your service department and Fixed Ops profitability that your dealership should be taking advantage of.
Methodology
Dynatron’s database includes repair order (RO) information from dealerships across North America. To formulate this report, we were able to analyze ROs from vehicles over 60,000 miles to create two different bar graphs.
The first graph includes data from over 27 million ROs to show the increase in dollars per RO based on the age of a vehicle. The graph begins with new vehicles and ends with vehicles 10 years and older.
The second graph shows the percentage of One-Line ROs dealerships had in Q1 2024. The number of One-Line ROs directly represents potential missed opportunities for selling more on the service drive.
Results: Dollars Per RO and One-Line RO Counts for Each Dealer
Results: Dollars Per RO vs. Vehicle Age
Results: One-Line RO Counts
Do you know how many of your ROs have only one line? Here’s how your performance compares to the 27 million ROs we analyzed:
- 50% or more of your ROs with one line is poor performance.
- 50-38% of your ROs with one line is average performance.
- 38% or less of your ROs with one line is excellent performance.
If more than 38% of your ROs are one line, there is a huge revenue opportunity to be taken advantage of!
Analysis
- The average RO cost for vehicles 10 years and older is 96% higher than vehicles 1 year old or less.
- After a vehicle’s age reaches 9 years old, the average RO cost increases by 20.8% in year 10.
Key Takeaways
We know as vehicle age increases, the cost of ownership also increases, as highlighted by the first graph. With that correlation in mind, we can look at the second graph to see how One-Line ROs on high-mileage vehicles in particular can leave significant revenue on the table.
The goal is to have the least amount of One-Line ROs as possible. When this is properly addressed in your service department, the hours per RO increase when your advisors sell more. This directly impacts dollar value with parts and labor, automatically improving several performance metrics just by reducing One-Line ROs.
Does your DMS generate a One-Line RO report? If not, Dynatron Software can help! Our reporting technology has the ability to provide reports like the example below showing One-Line ROs specifically for high mileage vehicles.
Discussion
Over time as the aftermarket gained popularity, the automotive industry introduced (and even mandated in some cases) installing express lube operations within the service department. This resulted in having separate express and main shops, also splitting up talented service advisors and technicians. Customers coming in for basic “express” services such as an oil change are being seen by newer and less experienced technicians, whereas the more seasoned techs are performing diagnoses and repairs in another service drive.
The problem with the divide of express operations is that less experienced technicians are writing up high-mileage vehicles without recommending additional preventative or diagnostic services. The seasoned technicians in the “main” service department are primarily doing recalls and warranty work. The purpose of competitively priced lube, oil and filter, and express services is to get people in the door, but many dealerships aren’t properly capitalizing on the opportunity to upsell them. This is especially true with high-mileage vehicles.
The solution is about maximizing the knowledge and talent you have in your service drive. Once a manager recognizes the missed opportunities, the entire department can get on the same page regarding the significance of the different mileage bands. From there, a process can be developed and implemented to route cars in various mileage bands to certain technician talents. When considering high-mileage vehicles, you want not only a technician knowledgeable enough to perform maintenance and repairs but also someone with great selling skills.
Conclusion
High mileage vehicles present a hidden revenue opportunity because those are the ones that need the most attention, but those vehicles come through express lanes manned by the least experienced techs, resulting in One-Line ROs. You don’t realize these are the most valuable customers, and you’re presenting them with your least skilled salesmen resulting in low dollars per RO.
Mileage awareness is the concept of a service department manager determining which service advisors and technicians should be handling certain vehicles based on their mileage, instead of customers determining who writes up their vehicle based on the door they drive through. When considering high-mileage vehicles, you want not only a technician knowledgeable enough to perform maintenance and repairs but also someone with great selling skills. After all, service IS sales!
Dynatron Software has customizable reporting insights paired with service advisor training from our coaches that can help a dealership of any size take advantage of the high-mileage vehicles that come through their service drive.
Dynatron knows fixed ops profitability, do you? Get in the know with Dynatron at https://go.dynatronsoftware.com/cata.
Leigh Silver is the chief executive officer of Dynatron Software. He brings nearly 20 years of experience in automotive technology and is seen as a thought leader in the automotive industry.
