Many consumers have the perception that servicing at a dealership is more expensive than at independent service providers. Whether this applies to your service department or not, independents acquire customers through consistently advertising competitive prices. Unfortunately, this seems to be working well for them as they’re capturing more and more of your business.
So the first question to ask yourself: is your pricing in line with your competitors? Or maybe you’re still in the mindset that technicians trained on a certain make are worth their weight in gold. I often wonder why dealers are so price-competitive to sell a car, yet so many are unwilling to be competitive with their service pricing.
From personal experience as a service customer, I know that overpricing is an issue. Let me share a recent example: I went to my local dealership to get my vehicle serviced. I’m purposely leaving out the make—but I will let you know: it’s not a mid-line vehicle. When I arrived, they informed me that my oil change and tire rotation would be $112. I was taken back, so I asked the new advisor why it was so expensive.
Let me state his response exactly: “If you want someone who knows what they’re doing, then it’s going to cost more money.”
I went into the dealership to speak to the Service Manager. “Please tell me you have some coupons for this?” I asked.
The manager said he would look for a coupon. I know him well, so I quietly stated, “This is a big reason why you guys are losing business to independents.”
For reference, they had a special running during my last service visit. I had a coupon for $69 for a synthetic oil change with a tire rotation included—which was fair—but there is nothing fair about $112.
Everyone loses in this scenario. I paid too much, and they have probably lost a customer.
So if your dealership isn’t being price-competitive, I hope this article will at least help shed some light on a consumer’s perspective. Jiffy Lube and Tire Kingdom technicians may not be trained on a customer’s particular model. But let’s face it: they have to be doing something right. They’re popping up on every corner like Walgreen’s and multiplying like bunnies!
I realize that not all dealers are deserving of an unfair price perception. However, I think that all service departments would flourish if they would address this issue head-on.
Consider adding best practices for your service advisors. Take the time to reassure the customer that your dealership will find the best and most economical way to take care of their vehicle. Here’s an example: “Mr. Customer, we need to look at replacing your two front tires soon, but you should be good for another few months. So, I’ll tell you what: let’s set your next appointment for three months from now and in the meantime, I will start doing the legwork for you. I want to make sure you get a good tire for an affordable price.”
By doing this, you have reassured the customer that you are cost-conscious and have taken a large burden off of them–which resulted in setting their next appointment. Now your chances of losing that customer to an independent have dropped significantly. Bottom line: we have to start making our customers feel like we have their backs.
Remember, it is wiser to offer competitive prices with a better experience than to offer higher prices because of experience.
Author: Alexia Henson
Alexia Henson is AutoLoop’s National Director for Direct Mail. She heads up the mail division that supports AutoLoop’s software customers and is responsible for the implementation of sales strategies and training.
Alexia has 18-years of experience in promotional marketing in the automotive industry, along with 18 years of sales experience in B2B. She likes to share best practice tips with her clients and others in the auto industry.