The average light-duty vehicle driving the roads is older than it’s ever been: 11.6 years old. While that might not be great news for sales, it’s certainly good news for service. And what’s good for fixed operations is good for your bottom line. According to NADA, the net income from fixed operations has exceeded profits from new- or used-vehicle departments for the past two years. However, this major profit center is facing some major competition. It’s estimated that 67 percent of customers leave dealerships after warranty expiration. Why are so many customers defecting, and how can you win them back?
We’ve broken customer concerns down into three major categories. Address these, and you can prevent attrition and bring back post-warranty customers.
One of the biggest challenges all service centers face, whether dealer affiliated, chain or independent, is a lack of consumer confidence. According to an AAA study, two-thirds of US drivers distrust auto repair shops. Drivers were concerned that work would not be done correctly and that service providers would recommend unnecessary services. Dealers are particularly well-equipped to alleviate these two concerns. With a service bay of factory-trained technicians and genuine OEM parts, customers can be assured that repairs will be done efficiently and effectively. In addition, dealers provide detailed explanations of recommended work, including why it’s needed and a timeline of urgency. Highlighting your commitment to earning customers’ trust will help them build confidence in your services—and keep them coming back.
It should come as no surprise that customers have money on the brain. The older age of cars on the road shows that drivers are being more frugal. Nearly three in four shoppers said they were wary of repair shops overcharging. Dealers can face a disadvantage in pricing, because highly trained technicians and manufacturer parts add to overhead costs. However, while it’s important to be as price competitive as possible, providing value can make up significantly for cost differences. Better service the first time means customers won’t have to pay for a return visit due to poor work. Dealers can also offer amenities that most independents can’t. If a customer can work from your business center, or get a loaner vehicle, the price difference more than pays for itself. Which brings us to our third customer concern …
It seems most people don’t have enough hours in their day. Getting a car serviced can be a particularly stressful affair, since a vehicle is essential for most working adults. Convenience is king, and you can offer more than most service chains and independents. Shuttles, loaners and vehicle pick-up services help customers stay on schedule. Many dealers are also investing in offering leisure activities like putting greens, massages and manicures, helping customers catch up on relaxation time while they wait. Offering convenient scheduling options—or not requiring an appointment at all—are additional ways you can make your customers’ lives easier.
Show Them You Care
Your digital presence is key to showing customers you understand their concerns. It’s also key to growing your customer base. Nearly half of millennials and gen-x have yet to find a repair shop they trust, compared to only a quarter of baby boomers, and their preferred search method starts online. CDK has done in-depth research on the digital presence of independent service providers, national service chains and dealerships. Our presentation at the Driving Sales President’s Club Fixed Operations Workshop in April will reveal the results of this study. We’ll offer more detailed solutions to winning service customers online and in-store. By focusing on the three “C’s,” you can attract and retain more customers—and build a thriving, profitable service department.