When a customer buys a new car from a dealership it’s almost a given that service also just gained a new customer. Most of the time, if the customer is local, they will start bringing their vehicle into the selling dealership for regular maintenance and service. Some manufacturers even include a period of free service. This can further incent a customer to patronize the dealership and offers the dealer more opportunity to develop a relationship with the customer and avoid defection to independents.
In the customer ownership lifecycle, these are the honeymoon days, if you will. But what happens when the honeymoon is over (namely once the vehicle is out of warranty or the free service is no longer free)? Statistically, this is the most crucial time for dealers as far as customer retention because this is when most customer defection occurs.
One day you have a regular service customer that’s been visiting your dealership for a couple years and then… poof… they disappear. What happened, and how can you prevent this?
The customer starts making decisions on their very first visit as to the likelihood of continuing to service their vehicle at your dealership after their free service period expires or upon warranty expiration. Everything from how efficient the process is, to how welcome and helped they feel, begins to craft their feelings.
But it’s not only the environment and efficiency that matter. Build value in service at YOUR dealership (vs. independent). And that starts by earning the customer’s trust. Frequently, dealership service is more expensive than independents – labor rates are higher and parts are more expensive. Consumers are already trained to think this way. Why? Because dealerships have trained them to and the constant barrage of marketing from independents announcing low priced services has made them believe that.
While dealers certainly try and position themselves as low (or, at the very least, competitive) pricing in sales, how often do you see a dealer marketing the same thing for service? Not often. This is a hill that many have to climb in order to overcome consumer perception about value.
People shop at Nordstrom even though they know it will be more expensive. Why? Because they know that the shopping experience will be good and they trust the quality of the merchandise. This perception is exactly what many dealerships need to instill in the minds of their customers from the very beginning. But how?
Service advisors are, in reality, salespeople. If a service advisor never upsold a customer, they probably wouldn’t be in that position long. That being said, service recommendations are only valuable to a customer and the dealership if they are accurate and timely. Instead of trying to sell the customer everything, focus on what is time-sensitive. Understand that preventative maintenance and timely services should be the priority.
Don’t try to sell the customer a service prematurely, such as a timing belt at 50,000 miles, when it’s really not scheduled until 90,000 miles. Presenting the customer with something that doesn’t need to be done yet is doing them a disservice. It’s also a major red flag, especially if they obtain a second opinion and are told that they really don’t need what you recommended at that specific time.
Build a trust-based relationship with your customers and be honest in your recommendations. If everything a service advisor offers is timely and needed, those recommendations will be appreciated and will help to build trust and customer loyalty.
Use the various technologies available to educate consumers on the service recommendations you’re advising by showing them what’s wrong, why that service is important and how it benefits their vehicle. Pictures and video tools can powerfully help illustrate this to the customer, whether third-party informational videos, or actual video walkthroughs of their specific vehicle (i.e. this is what a healthy air filter looks like and this is what YOURS looks like).
Through accountability and consistency, your dealership can easily become the consumer’s go-to for service. But it has to be earned and cultivated from day one, not the day after their warranty expires.
Be the dealership where the customer’s needs come first. You should find that your customers appreciate it and they will come to trust you and be quicker to accept your recommendations.
Customer loyalty and retention in service are critical components of a healthy service department. Start focusing on what’s best for the customer and you won’t have to worry about them sticking around – they’ll stick around because they want to.
Author: Tim Clay
Tim Clay, Chief Revenue Officer, Confident Financial Solutions. Tim Clay is Chief Revenue Officer with Confident Financial Solutions, a consumer finance company that offers an auto repair financing program for service centers and their customers. Clay has more than twenty years of experience in the automotive retail space and is a graduate of NADA Dealer Candidate Academy. Previously, he was COO and Co-Founder of ClickMotive, an automotive technology company. He has instrumented one successful automotive startup exit and one successful medical company exit.