Breaking Down the Sales-Service Divide in Automotive Retail

As economic uncertainty pushes consumers to keep their vehicles longer, dealerships are searching for more efficient ways to drive sales and retention. In this episode, Sharon Kitzman, CEO of Affinitiv, explains why the service lane remains one of the most overlooked opportunities in automotive retail and how dealers can turn service customers into vehicle buyers through data-driven engagement.

Kitzman discusses how service history, vehicle equity, and ownership data can help dealers identify the right moment to initiate sales conversations. She also explores the operational barriers that often prevent dealerships from fully leveraging their existing customer base.

Key discussion points:

• Why service lane customers represent a high-value source of sales opportunities
• How data and equity mining tools help identify ideal trade-in timing
• The persistent divide between sales and service departments and how to overcome it
• The role of pay plans, technology integration, and dealership processes in driving collaboration
• Why retention marketing often delivers stronger ROI than customer acquisition campaigns
• The importance of accurate attribution reporting when evaluating marketing performance

Kitzman argues that dealerships that prioritize service-lane engagement and customer retention will be better positioned to navigate affordability challenges and strengthen long-term loyalty.

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

For more content, visit CBTNews.com and follow us on your favorite podcast platform.

Transcript

Why Demand Feels Softer

Announcer 0:06

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:11

In today's market, the stores winning are finding smarter ways to reconnect sales, service, and customer engagement. Joining us now is Sharon Kitzman, CEO of Affinitive, to discuss how dealers can create more demand, drive showroom traffic, and unlock opportunities from the customers they already have. Thank you so much, Sharon, for joining us on the show once again.

SPEAKER_03 0:32

Thank you.

Jim Fitzpatrick 0:33

Let's kind of jump right in here. Dealers are facing softer consumer demand and increasing economic uncertainty, as we were talking about just before we got recording today. What are you seeing in the market right now?

SPEAKER_03 0:45

Yeah, there's there's a lot going on, isn't there?

Jim Fitzpatrick 0:47

Yeah.

SPEAKER_03 0:48

Um, you know, when we spoke at NADA, we were talking about more of the Gen Z market and and like you just said, we were talking right before we came on air about some of them as well. Um, but I think what we're seeing now from early February is it's not just about Gen Z affordability, it's it's really broadened to general affordability. That's right. And and we're starting to see that impact the retailers

The Service Drive As Opportunity

SPEAKER_03 1:12

for sure. And and one place that they can look for consumer and consumer demand is to their service drive. That's right. To drive service to sales conversion and and hopefully into their showroom.

Jim Fitzpatrick 1:24

That's right, that's right. What are dealerships uh putting uh renewed focus on in the service lane as a sales opportunity?

SPEAKER_03 1:31

Yeah, so certainly the service consumer and the information that a dealership knows about that consumer is really valuable.

SPEAKER_04 1:41

Right.

SPEAKER_03 1:42

Not only how well or not so well they've potentially taken care of their vehicle, but the potential equity that they have in that vehicle and where they can transition that consumer back over into the showroom. And there's some great tools, of course, Afinitive has many of them, um, that they can leverage to really help with that conversion. And knowing when to pick up that consumer and move them at the right time is really critical because that vehicle um is maybe more expensive than it has been in the past, and knowing that right time to convert is more important than ever.

Service Lane Appraiser And Timing

Jim Fitzpatrick 2:22

That's right, that's right. So let's talk about some of those uh tools. How does service lane appraiser help dealers convert service traffic into showroom traffic?

SPEAKER_03 2:30

It's it's a really great product because it knows exactly when to connect to the consumer. Okay, picking up on um the exact right time to connect using text and um the uh algorithms in the system to know exactly when to reach out to that consumer, um, leveraging the pickup on the consumer, interacting with that text, picking up information that the consumer is interacting with and uh driving that information back into the system so that it's engaging, right? Yeah and knowing that when that consumer engages with the system, more than likely they're gonna end up back into um the process. It's kind of like saying, Oh, you want something from me and you have value in my vehicle? That's interesting. Yeah, okay, I'll take a look at a new vehicle. And knowing that, then 39% of the time they end up trading in that vehicle. And what happens when you trade in that vehicle? That's right. You buy a new vehicle. That's right. Um, and so that's that's great in today's market. Um, when maybe more showroom traffic is exactly what a dealer needs.

Jim Fitzpatrick 3:45

That's right, that's right. And it's not at $1,000 a copy when you're doing something like that. It's really bringing down the cost of that acquisition or that or of that of that uh prospect, right? I mean, you're you're not paying a fortune for that lead sitting right there in your service drive.

SPEAKER_03 4:00

That's correct.

Jim Fitzpatrick 4:00

Yeah, that's correct. That's huge. So um uh what are dealers missing when they fail to connect with service customers for sales opportunities?

Breaking The Sales Service Divide

SPEAKER_03 4:10

Well they're missing a lot. I mean, first of all, they're sitting right there.

SPEAKER_04 4:16

Right.

SPEAKER_03 4:16

Right? Um, and so I think oftentimes there's a disconnect between sales and service departments in a dealer. Um unfortunately, sometimes a dealer or management, let's just call it management, sure in the dealership creates that divide. Sometimes it's pay plans, sometimes it's a physical wall in the store that creates it. And so um if you engage two different vendors, maybe one for your service tools, one for your sales tools, you continue to create that divide.

SPEAKER_04 4:54

Right.

SPEAKER_03 4:55

Looking for a partner who has tools in both service and sales that can work with you on processes from service to sales, sales back to service, and including that loyalty loop along the way who understands the integration between those two sets of tools is really important.

SPEAKER_04 5:14

Yeah.

SPEAKER_03 5:14

Because it's more than just the the tools, it's the processes, it is the pay plans, and it is the tools, and it's the data that's going back into those systems to continue that process between all of that.

Jim Fitzpatrick 5:30

That's right, that's right. And and it's funny that you talk about the tools that uh might be uh problematic for those two departments to come together. But uh but that argument and that fight's been going on for years, right? Decades. It's decades.

SPEAKER_03 5:44

Exactly. Maybe a century.

Jim Fitzpatrick 5:46

And you're right, I think you nailed it. You said it could be pay plan, it could be a number of things. You know, the service department thinks that the sales department, they're making all kinds of money on the sales of these vehicles and they're not working as hard as the service department does. And then, of course, the sales department will tell you well, there's no service department needed if we're not selling these vehicles. And that's been that's been the case. So so it puts that much more of a value or a need to have a tool where it brings them both together. There's no question. That's right. Especially in 2026.

SPEAKER_03 6:17

That's right. Yeah. That's right.

Jim Fitzpatrick 6:18

Yeah.

SPEAKER_03 6:19

And so ongoing um market retention processes are also really important. Um, and again, um, our essentials product handles um the ongoing retention of a consumer from the point of sale through first service, ongoing retention in the service drive, and then again, knowing exactly when to connect them at the right point in time for their equity back from that ongoing service retention and touch point back into the conversion back to sales um at the right point in time for that equity. And understanding that at that point that they came into the service drive, that repair order that was just written might have had thousands of dollars on it.

SPEAKER_04 7:10

That's right, right?

SPEAKER_03 7:11

And that might impact that particular service advisor's pay plan. Sure, that's right, and making sure that that is not a friction point. Yeah, right, because that conversion from service to sales has a potential gross profit of an incremental three thousand dollars. Yeah, and and you know, we know that because our our facts prove that all day long on our quote tool, which is our equity mining tool, on average selling thirty percent more vehicles for the the dealership, and again, an an average gross profit profit of an incremental three thousand dollars. Yeah, so is it worth it for the dealer to get that incremental gross profit on 30% more of their vehicles and to put a pay plan in place that's right to answer? It covers off that advisor from you know, walking away from that repair order? Yes.

Jim Fitzpatrick 8:08

Yes, no case. The answer is yes. That's right, that's right. And but that that's a for some reason, that's a tough hill to climb for a lot of dealers to make that leap. But it when you lay it out the way that you just did, it's a no-brainer. You know what I mean? Yeah, yeah. Yeah, it's it's it's nuts that we look at that and go, well, why would we pay the service advisor on that if they're not doing the work, they're trading the vehicle in or what have you. But to your point, it is a friction point that they're gonna go, well, wait, well, wait a minute, I'm not so apt then to dish this customer up to trade their car in.

SPEAKER_03 8:37

That's right. But engage us and we'll come help you with it. I know you don't always always think of us as coming and helping you with pay plans. But it's a reality. It is a reality, no question about it.

Jim Fitzpatrick 8:50

That's it. It is a reality.

SPEAKER_03 8:51

And like

Retention And First Party Data

SPEAKER_03 8:52

I said, sometimes it's a physical wall, sometimes it's a metaphorical wall.

Jim Fitzpatrick 8:56

That's right. That's right.

SPEAKER_03 8:57

Um, but oftentimes it's just a wall.

Jim Fitzpatrick 8:59

That's right. And in this case, it could be a pay plan. So um so talk to us. How important is customer retention and uh database marketing in today's environment? We've heard so much about the importance of first-party data, and dealers are sitting on just a plethora of data for their customers. So talk to us about that.

SPEAKER_03 9:18

It's critical. I mean, you know, you can spend tens of thousands, twenties, thirties, thousands dollars upwards, depending on the size and and metropolitan versus uh ruralness of your dealership in today's environment on advertising. Yeah.

SPEAKER_04 9:38

Oh, yeah, for sure.

SPEAKER_03 9:39

And then you can mine what you've already spent in advertising to get a consumer to walk into your showroom or your service drive. Right. And and now they're in your database.

SPEAKER_04 9:50

That's right. Right. That's right.

SPEAKER_03 9:51

So keeping them engaged at your dealership, keeping that database clean and keeping them um on that cycle from a retention perspective, coming back into the service drive and or converting them it back into the showroom is is critical. And it's easy to do.

SPEAKER_04 10:09

That's right. That's right.

SPEAKER_03 10:10

Um, and therefore, then it's a lot less costly than that advertising campaign to get Conquest consumers back in.

Jim Fitzpatrick 10:19

No doubt. Yeah. The days of spray and pray hopefully are behind us, but I'm not so sure that they are, right?

SPEAKER_03 10:27

Well, I mean, you always want to spend some money on filling the top of the funnel with new. Yeah.

SPEAKER_02 10:32

Of course. You do. Yeah.

SPEAKER_03 10:34

Um, but spray, no. No. Um, and you know, I think there's a lot of digital advertising that leads to more targeted digital marketing um campaign strategies that are out there. Um we have um a great solution there as well through our uh digital marketing and our activator solution. Um I think there's a lot of great solutions out there, but ours is very um what I like to call clean attribution focused. Um getting a very uh getting our activator solution to get whether it's a geo or whether it's a very targeted um uh clean list of of clients or consumers that you want to go after that really gets you a better percentage of attribution to rely on consistently so that you can target your budget effectively is a great way to look at a digital campaign strategy. It just depends on your franchise, on your market, on where you want to put your budget

Smarter Targeting And Clean Attribution

SPEAKER_03 11:54

dollars.

SPEAKER_04 11:54

Yeah.

SPEAKER_03 11:55

I think there are a lot of companies in a lot of ways that will claim attribution against a sale these days.

Jim Fitzpatrick 12:04

Oh, yeah, for sure.

SPEAKER_03 12:05

Um company, it can be your website company, it can be your advertising company. You have to decide what is best for yourself going forward.

Jim Fitzpatrick 12:16

But because digital advertising has become very expensive for sure, and and harder to measure. There, there's no question about it. How are dealers using smarter audience targeting to drive real showroom results?

SPEAKER_03 12:29

Well, how? Um I think they're doing it. Some are doing it in a very smart way, others I don't think are are really paying much attention to it.

Jim Fitzpatrick 12:40

Yeah, could be.

SPEAKER_03 12:41

Um, but I think you should.

SPEAKER_04 12:43

Yeah.

SPEAKER_03 12:43

And I think you should rely on whoever you are paying to do that and leverage the account executive that they are giving you and ask them a whole lot of questions. Yes, yes, and rely on rely heavily on the answers that they are providing you and and look at the reports.

Jim Fitzpatrick 13:01

Yeah, yeah. I totally agree. We we have a tendency in the business to just say, look, I'm selling cars, we're servicing cars. You all handle that. And sometimes we find out that they're not handling that, right? Or at least they're not handling it properly.

SPEAKER_03 13:14

That's right.

Jim Fitzpatrick 13:14

Yeah, yeah, yeah. That's right. Yeah.

SPEAKER_03 13:16

Um, I spoke to a dealer recently who said he had five or six different companies that claimed they they all sold the same vehicle for him in the same month.

SPEAKER_02 13:27

I I could see that.

SPEAKER_03 13:28

Absolutely, I can see the same thing.

SPEAKER_02 13:30

Yep, yep, no question.

SPEAKER_03 13:32

And you know, who who do you trust to do that?

Jim Fitzpatrick 13:35

That's right. And then when you think about, all right, well then if that's the case, who can I do, which ones can I do away with? You can't even trust the fact that you're doing away with the right one, you know, because they're all saying they're all taking that, they're all taking that that credit.

SPEAKER_03 13:50

That's right.

Jim Fitzpatrick 13:51

Yeah.

SPEAKER_03 13:51

That's right.

Jim Fitzpatrick 13:52

So now you're saying, okay, well, how well where am I as a dealer to say, where can I make this much more efficient by you know doing away with the duplicates, right?

SPEAKER_03 14:00

Yeah. And and there's some things you just can't get rid of, obviously.

Jim Fitzpatrick 14:04

That's right. That's right, that's right. Um, what should dealers prioritize from your perspective over the course of the next six to twelve months to maintain momentum?

Next 6 To 12 Months Priorities

SPEAKER_03 14:13

Well, I think um they have to prioritize their service drive. There's no question. Um when times are good, dealers forget about their service drive, right?

SPEAKER_02 14:25

Every time. All they focus on is very variable ops. How many cars can we sell?

SPEAKER_03 14:29

Um, and so focus there. Um, it is still um the part where you're gonna generate the most loyalty of your consumer base, the most profit. And it is still, in my belief, the part where you can drive the most uh conversion of service to sales um for your dealership in this economy where it is tougher more now than ever.

SPEAKER_04 14:54

That's right.

SPEAKER_03 14:55

Um and I and I also think you should uh or they should focus on um that service retention marketing because keeping them loyal in today's environment where a consumer's eye might be to go somewhere maybe a little less expensive or a perception of less expensive um to handle their ongoing maintenance might be um in their minds a good thing to turn to. Um that ongoing service retention marketing is gonna be critical to making sure that their consumers stay with them right now.

Jim Fitzpatrick 15:28

That's right. And if you're not doing it with your customers, staying in touch and focusing on retention, you can be sure your competition is, right? They want your customer, maybe in some cases, more than you realize you want them. That's right. You can't take anything for granted today. Right? Yeah, you can't say, oh, we sold them the car, we sold their family the cars. When they need service, they're gonna come back to us. No, they're not necessarily gonna do that.

SPEAKER_03 15:51

No.

Jim Fitzpatrick 15:51

Right?

SPEAKER_03 15:52

No, now more than ever, I think that loyalty is likely to erode.

Jim Fitzpatrick 15:56

Yeah, yeah. Especially as affordability, the uh issue of affordability becomes even more prevalent in conversations and and and the way people think about uh servicing their car. If they think that dealer is gonna be more expensive today, they start to shop, don't they?

SPEAKER_03 16:14

They do.

Jim Fitzpatrick 16:14

Yeah, there's no question about it. Yeah, no question.

Free Overview And Closing

Jim Fitzpatrick 16:17

Sharon Kitzman, CEO of Affinitive, a company that you all want to take a look at for sure. These are the kinds of solutions that we want to be bringing you here at CBT News. This is a really good one. So uh we're gonna leave all the information on the screen here so you can get a hold of them and uh and have one of their team members come in and give you kind of uh an overview of where you stand now and what affinitive can bring to the table for you. I'm sure you'll do that for no cost, right? That's correct. There you go. There you go. So so dealers, as I said, uh it's all about service now. Uh it was dur during the Great Recession. We went back to service and said, well, we're not selling as many cars. Then we saw it again through COVID. Uh uh to your point, every little downturn, we go right to the service director and say, We need you more than ever, right? And uh and and right now, we need you more than ever back there. So, Sharon, thank you so much for joining us on the show. Very much appreciated. Yeah, this is great. Great to see you. You too.

Announcer 17:12

Thanks for watching Inside Automotive with Jim Fitzpatrick.