ATLANTA — With industry new-vehicle sales under pressure, Mercedes-Benz USA wants to help its dealers market service more effectively and capture more Mercedes repair business.
Improving service retention — and giving dealers new tools to build the fixed operations business — were top goals for Christian Treiber when he became Mercedes-Benz USA's vice president of customer services at the beginning of 2016. Key initiatives are underway.
"The main topic for us is always dealer profitability," Treiber said. "We need to create more awareness on the fixed ops side. The car parc is growing. Now how do we keep up with the pace and how do we keep the customers in the dealership?"
More effective marketing is one answer. Two changes launched this year seek to help dealerships reach more potential service customers.
In February, Mercedes introduced a customer relationship management tool called Engage. The software, from AutoPoint, is customized to Mercedes' specifications. It gives dealership employees a clear overview of a customer's history and should make fixed ops marketing easier, Treiber said.
It can be used to set up direct marketing activities, service reminders, open-house invitations to customers and more, he said. Dealerships can gauge what's successful by analyzing data on how many customers received emails, opened emails, clicked links and came back to the dealership.
To date, 335 of the brand's 380 dealerships are using Engage. Participants have monthly retention rates a full percentage point higher than dealerships without it, Treiber said.
"We are very happy with the progress," he said, "and we are not done." He envisions a benchmark customer relationship management system that can help the service department fill downtime on short notice. For instance, it could come up with a direct marketing blast on a Tuesday that can generate appointments to fill a higher-than-normal number of openings the rest of the week.
In June, Mercedes said it would lift a restriction on Tier 3 cooperative advertising money. Instead of limiting that spending to new-vehicle sales, dealers were told they could use the money to promote any area of the business. Many dealers praised the change and pledged to shift some spending to service marketing. Dealers and Mercedes expect the move to boost service retention.
Mercedes also has launched a service effectiveness score for dealerships. It measures how many registered Mercedes vehicles inside a store's area of influence are serviced at the dealership. A monthly report began going out to dealerships this spring.
"We need to give them more data, more transparency they can really act on," Treiber said.
For instance, if a store manager sees that a lot of registered Mercedes vehicles in a certain ZIP code aren't being serviced at a Mercedes dealership, that implies an opportunity to run a targeted marketing campaign to attract those owners.
Although Treiber says every Mercedes vehicle should be serviced at a Mercedes dealership, there is no mandated service effectiveness threshold. Throughout the U.S., about 75 percent of registered Mercedes vehicles up to eight years old are serviced at Mercedes dealerships, he said.
The program is a work in progress. One goal is to develop a bonus or integrate the score into the vehicle margin system so that dealerships have a financial incentive tied to the score or improvements in the score, he said. That could happen as early as 2018 and should be in place for 2019, he said.
"We're still working with the dealer network to say: 'How do we do it best?'" Treiber said. "Because it needs to be fair, but it also needs to be challenging."