Today’s world of transparency and information availability is making it easier for consumers to identify vendors, products and services via a couple clicks of their mouse at home. They can walk into any retail store and with their smartphone, scan a UPC code and shop your prices while standing in your store. They have the ability to submit leads for quotes on new vehicles and price out used vehicles while on your lot, or sitting in your showroom. I’ve even heard of one case where a consumer was in one dealership showroom, while in active negotiation on their cell phone with a salesperson from another dealership, who was trying to talk them into leaving via tempting prices – all in real-time.
Amazon makes it super easy for a consumer to shop and compare prices for everything from macaroni & cheese to major appliances. Google itself has begun entering the automotive market allowing consumers to price shop without ever leaving search results. The data is there and it’s becoming increasingly available to consumers and easier to access all the time.
What does the future hold? I predict that, one-day, this trend of increasing transparency will extend to include automotive service. A consumer will have the ability to search the Internet or use an app on their smartphone to shop your service menu and pricing and compare it with all other dealerships and independent mechanics. Companies will start driving traffic to websites to capture and re-sell leads for service quotes. There may even be sites that make dealers competitively, and anonymously, bid on service business. The data exists. There are many vendors polling your DMS for not only sales, but also service data.
Amazon recently entered the auto parts business and eBay has been in that space for quite awhile. In the past, these auto parts were only offered via 3rd party merchants who were using Amazon as a means to sell their products. However, there are now parts available on Amazon that are sold direct. They’re selling every part imaginable, including tires & wheels!
Consumers want choice and companies will provide it. It’s not a matter of if, but a matter of when.
So, what are dealerships going to do to combat this?
Take steps now to go that extra mile for your customers; ensure a quality experience and make the service process convenient to the customer. It’s proven that people will pay more for a quality product if they see the value. Create enough value that your current and future customers will want to do business with you despite the price being higher than Jiffy Lube, or any of the other independent auto service chains. In fact, it’s a given that once this transformation occurs, these service chains will be throwing ridiculous pricing and deals out there, simply to get the customer to their store with the goal of upselling them.
Dealerships already do this in both the sales and service departments. Why would it be any different for any other competitor?
Following are some suggestions that may help your service department gain a competitive advantage:
- Start focusing more of the marketing budget on service retention. Fixed operations account for, on average, 43% of a store’s income. By actively marketing to existing service customers and reaching out to defectors to discover why they defected, dealers will be able to better respond to problems in real-time and adjust processes accordingly.
- Ensure that the quality of service is exemplary. Track and be aware of any correlations between service defectors and individual technicians. Have a performance manager that is actively monitoring the status of vehicles in service. Proactively investigate service vehicles that are stuck in any stage of the process and correct any issue that exists.
- Survey customers independently. Don’t just rely on CSI scores and reports from the OEM. A high percentage of customers never bother to fill those surveys out. Capture as much information as you can with an independent dealer survey. In addition, be ready to not only listen to their concerns and suggestions, but also be prepared to make changes to address them. Finding processes that need correction and making things better can be one of the most valuable results of customer feedback.
- Service advisors should be ready and available to greet every customer immediately and by name. If that’s not possible, think about hiring and training “greeters” to do it. Service advisors should be doing their check-ins and writing initial service RO’s at the vehicle, not in their offices. They should have instant access to a customer’s service records, previous maintenance completed, suggested maintenance that was declined and available service menus.
- Have an environment of “customer first,” and provide all of the niceties that a customer could possibly need. This means having a pleasant, comfortable waiting area with refreshments available. Install and have available an open Wi-Fi network for customers to use. Provide a shuttle service to customer’s homes, work or even local malls or other places in which they can kill time. Consider offering loaner cars free of charge to customers whose service will exceed a certain length of time.
- While in service, your advisors need to have the ability to communicate with the customer on their terms and in the most convenient way possible. They should be able to call, text, e-mail and even chat with a customer if requested. They should inform and communicate any service recommendations with the customer in layman’s terms. These services should be legitimate repairs and not just attempts to up-sell.
By adopting these practices on a consistent basis, a dealership can transform its service drive to one that offers the customer convenience and value above and beyond the ability of any independent or chain automotive repair business. Customers will recognize the effort, and will not only want to bring you their service business, but also be willing to pay more.
Taking pre-emptive action against the inevitable transparency that is on the horizon can give any dealership a jump start on gaining the customer’s loyalty. It can also increase retention and create brand evangelists. It will mean more of a focus on marketing the service department. However, these actions should provide an army of happy customer’s that will assist in that effort.