Maximize Your Efficiency, Increase Service Customer Loyalty and Drive Revenue
Jul 14, 2022 Jade Terreberry & Mike Boyd
We all know that there is a big difference in acquiring a new customer vs. retaining an existing customer. But once you have that ideal customer, a lifetime value customer either in or headed to your service drive, most dealers wonder what are best practices to keep that customer coming back?
That is the big question in today’s times, especially with shifted customer expectations and behaviors. And when you put some of the best practices outlined below that are working in today’s times to use, you’ll gain the three things we hear time and time again that all dealerships and service departments place as a priority: efficiency, loyalty and revenue.
But in order to maximize efficiency, increase loyalty (both externally with clients and internally with your team) and drive revenue, it’s important to look at some of the problems dealerships and service departments are currently facing and dive into some solutions to help drive your business forward.
Problem #1: Location
One of the top five problems Cox Automotive’s 2021 Service Industry study showed is that dealerships get push back on location – in fact it was the #1 reason why customers who buy a car don’t return to that dealership for service.
Now, we know right now because of chip and inventory shortages, car buyers are willing to travel a little further out than previous years. But, for the majority of purchasers who’ve bought from you, your dealership is typically close enough that the customer could make the decision to service their car with you, if you can offer time savings and conveniences so that they don’t look at location as a hurdle.
Solution #1: Vehicle pickup and delivery
What is an easy and popular solution that we’re seeing more and more of at dealerships and service departments? They’re offering pickup and delivery! This is a wide-open lane currently, as fewer than 60% of dealers currently offer pickup and delivery.
However, 89% of customers said they are more likely to choose one dealership over another based on having pickup and delivery available*! That’s a big number – revealing it’s not so much the location – but the conveniences the service department offers them.
It gets even more interesting when you look at this statistic uncovered by a recent Cox Automotive study… 87% of those that have access to and used a pickup and delivery service when offered by the service department , said they were highly satisfied with the service they received*. This shows an increased satisfaction rating compared to customers who bring their cars to your dealership to have them serviced.
It’s also important to share that 51% of those that took advantage of a service like pickup and delivery, also had more services completed than they would have if they’d taken in their vehicle themselves.? Talk about efficiency, increased customer loyalty as well as additional revenue opportunities!
So, if you offer service pickup and delivery – wonderful! Think about ways to enhance it even further. But for those of you that only minimally offer, or don’t yet offer vehicle pickup and delivery, the numbers speak for themselves. It’s time to take a closer look at how you can start offering it at your dealership and service department.
Problem #2: Pricing
Another problem almost every dealership faces, not just in today’s changed times, but really for quite a while, are general perceptions or beliefs related to pricing – specifically when servicing their car at the dealership.
Some of those perceptions and beliefs are:
They will be overcharged.
The charge for parts and labor at the dealership isn’t or won’t be reasonable.
They are being charged a premium to service their car at a dealership.
And although many of you are probably not surprised by these beliefs we uncovered in our study, there is a way to blast past those outdated misconceptions and beliefs.
Solution #2: Increased service pricing transparency
One of the advantages to today’s mostly online world is increased transparency. And that increased transparency is leading the customer to see that they don’t always have to pay more for service from a dealership.
The Kelley Blue Book Fair Repair Range TM is an example of how at Cox Automotive we’ve taken our vision and commitment of transforming transparency in the auto industry. We took 200 million repair orders and provided transparency in service pricing for each make, model, and market-specific location.
When potential service customers see the side by side with tools like the Kelley Blue Book Fair Repair Range TM, and see your transparent pricing for services, it becomes very clear the difference is typically not as much as they thought.
Being transparent in your pricing is not only helping change old, often untrue beliefs, but it’s giving customers the ability to make choices based on real information, not just best guesses.
Additionally, it’s helping increase service customer loyalty, trust, and ultimately fixed ops revenue, and it highlights the advantages of having your service performed with highly trained technicians and factory parts.
Problem #3: Shifted customer preferences
Now let’s look at something that probably all of us are feeling, both from the customer and most likely feeling ourselves as well. Customers in our recent Cox Automotive Buyer Study* have shifted preferences in how they want to communicate and book services… especially after the last 2 years!
Customers have different preferences, and dealerships, especially service departments, have some shifting to do in how they communicate with customers both before, during and after the service. Gone are the days of preferring face-to-face, phone calls and email as the only ways of communicating and booking services.
Solution #3: Increased digital interactions
So, what do customers prefer? Digital interactions!
Based on the most recent Cox Automotive Car Buyer Journey their expectations and preferences have shifted, and we’re seeing the digital interactions replacing personal touchpoints around service visits—phone calls, face-to-face, and emails are all declining —– while text message, apps, and dealership website communication are all increasing.
The following digital interactions give you the ability to not only quickly and conveniently connect with your customer, but give you the increased visibility to stay top of mind.
Text messages: A quick and easy way to keep your customer aware before, during and after they have service completed – especially when it comes to need to know information and reminders.
Apps: Allows customers to easily book and see what upcoming maintenance schedules are due, or what warranty recalls they have. Whether you just have a basic app, or a super sophisticated one, it allows the customer to communicate and stay in touch with you, and you with them.
Website: It’s important to take another look at your dealership’s website and make sure your service offerings and promotions are accurate and what your dealership and service department do to stand out is front and center. They can also handle several things such as bookings to reminders, which will increase the chances your client will keep coming back to you.
The road ahead
From looking at just how important service is to a dealership, especially since it contributes to about 50% of a dealership’s overall profit*, to examining the top trends and problems dealership service departments face, it all points to one thing.
Customers’ preferences and priorities have shifted over the last few years, and instead of viewing these as strictly problems or challenges, with the top tips we shared, we truly believe you now have solutions that provide an opportunity for further innovation and business for your dealership and service department’s road ahead.