It’s no secret that service customer retention in new car dealerships is dismal, actually pathetic. Hang around a new car service reception area and note the age of the vehicles. They are relatively young compared to the average national fleet of some 10.8 years, give or take a tenth.
Whatta ya got?
While conducting a service manager/advisor workshop for a dealer group, I pulled up their competition using www.repairpal.com. This handy site lists optional locations for getting specified work completed surrounding a zip code. In this particular instance, I was at a good-sized Toyota store in a metro area, so I looked up the commonly shopped job of front brakes for a couple-year-old Toyota Camry.
I asked the attendees to guess how many competitors might be listed in a ten-mile radius and the highest number was 60. I punched the info in and 147 shops (no dealers) popped up, complete with nifty mapped out locations and contact information. Most of the listings were independent shops (there are over 82,000 registered versus 17,000 plus new car dealers). Well this begged the question: “Why should a customer drive through heavy traffic, crappy roads and lousy weather (New England) to come to this particular Toyota store for brakes?” There are so many handy options next door to home and work you know and with pretty good prices too. So, I asked the group to list the reasons.
Factory parts – nope. Dealers peddle factory parts to other shops every day, and frankly many parts are exactly the same from jobbers, who buy from the same suppliers as the factory. Not long ago, one of my independent shop owner friends showed me a clutch/pressure plate assembly with “Toyota” stamped on it exactly as it is from a Toyota dealer – came from the local parts house.
Factory trained technicians – nada. Nothing special here – in fact, according to a study I read, the ASE (Automotive Service Excellence) certification is more recognized than factory training – probably because the ASE patch and displays are featured everywhere in the aftermarket. How many “factory trained” patches or signs have you seen?
Shuttle service – naaa. If you need a ride you can find one most places and most likely you won’t be in the shuttle with three other riders going the opposite direction.
Upgraded waiting room with free coffee & snacks – nope. I never had a person tell me they went to a dealership for free breakfast or the free coffee, except for the homeless guy one time. However, if you want to watch television and be forced to watch other dealers’ advertising, the dealership waiting room is perfect for you.
Friendly people – nope twice. So, you are nice and everyone else isn’t – not likely. Dealer competitors have to “earn” their customer’s business since they aren’t being bottle fed from big new and used sales departments; besides most independent shop owners actually enjoy their jobs.
Competitive prices – right Lefty. This is a real stretch since some big box stores (i.e. Midas) practically give items away just to incarcerate a customer. Everyone has “competitive” prices, and independents offer a lot more parts pricing options so every need can be met.
Saturday service – swell. Like no one else is open on Saturday and even Sunday.
Recall fulfillment – ha. Let me get this one. A customer will continually come to the dealer in case a “factory part” is defective and has to be replaced – so much for the factory parts quality theory.
Factory tools and equipment – hardly. So, the thinking here is that a dealer has the right stuff and everyone else doesn’t. Makes you wonder how the other half captured almost 80% of the service business – just luck and a good-sized hammer I guess.
You – bingo. One savvy attendee identified the real answer. Long-term customer retention is simply tied to a professional service provider, who acts as the car coach for the customer. Independent shops capture and maintain customers because they provide much more than the actual repair or maintenance activity. They shepherd an owner through the life of the vehicle by providing valuable leadership and guidance in every purchase. Ask your loyal customers why they are loyal and you will find most of them keep coming back because there is a “you” on the premises they can count on.
This certainly points out the importance of a professional and knowledgeable service writer to the dealership service operation. Putting some “nice kid” on the service drive might be ok during the warranty period, but over the long haul forgetaboutit. Gimme a reason to stay – there it is.
