Win Customers for Life

Research highlights how to get customers to return after the sale. - IMAGE: Getty

Research highlights how to get customers to return after the sale.

IMAGE: Getty

NADA statistics underscore the importance of service departments to automotive dealership success. New vehicle dealerships reported over $111 billion parts and service income in 2020, according to NADA statistics. And when buyers have their vehicles regularly serviced at the dealership, they are 76% more likely to buy their next vehicle there.

The survey learned customers based their service decisions on three factors: convenience, price  and trust.

But the NADA figures, while impressive, don’t tell the entire story, reports Kim Saylor, director of Product Marketing for CDK Global. The figure represents only 30% of automotive maintenance.

CDK set out to learn why in a survey of 400 vehicle service shoppers. The survey required respondents to own their vehicle and be the one deciding where to have the vehicle serviced. They included luxury and non-luxury vehicle owners and there was a 50-50 split of vehicles  covered by warranty and those past their warranty.

“Our objectives were to find out what factors consumers consider when they’re deciding where  to take their vehicles for service and to assess the opportunity for dealerships to win back customers who get their vehicles serviced elsewhere,” Saylor says.

She adds the responses were telling. They discovered 74% of participants would use a dealership service department in the future. The survey also uncovered customers’ reasons for going elsewhere and what they needed to return to the dealership.

“Customers who were under warranty were more likely to bring in their car to the dealership  than those who were out of warranty. But 68% of customers out of warranty said they were willing to bring their car back to the dealership,” she says.

Why They Choose Third Parties

The survey learned customers based their service decisions on three factors: convenience, price  and trust.

Ninety-seven percent reported trustworthy service was important to them in their service experience; 77% ranked good and consistent prices as essential, and 64% reported convenience mattered too.

Those customers who chose dealerships for service cited technician knowledge of their vehicle,trustworthiness, and their relationship as the reasons why.

“Dealerships, they said, know their car inside and out, because they only service that brand of vehicle,” Saylor says. “These also reported dealerships had better training and only used certified OEM parts. They said they found dealership personnel trustworthy, reliable and professional. And, as they got their vehicle serviced there over the life of their vehicle, they became a customer for life.”

How to Win Them Back

The potential for service center growth stems from winning back those buyers going to third  parties for service, according to Saylor.

She suggests promoting dealership knowledge, having a single pricing guide for the entire  service process and adding in conveniences such as vehicle pick up and drop off or remote  service options.

“Knowing vehicle knowledge matters, dealerships can capitalize on what they know, and create a positive impression,” she says. She recommends posting articles expressing that knowledge on the website and social media. These articles should focus on what it means to have a factory- trained technician, factory-certified parts, and vehicle health diagnostic services, for example.

“On their website, they can highlight the benefit of their relationship with the OEM,” she says. “Share that a dealership has access to connected vehicle data, recall data, and OEM rewards data that a third-party shop may not have.”

Trust also factors into service decisions. Here, dealers must provide greater levels of transparency on service prices, she says. Consumers often believe dealership service and repairs are more expensive.

“But customers are not only focused on the lowest price. While that is important, it’s not the most important thing,” she says. “Consistent pricing was the most important. If they’re scheduling an appointment, they want to see the pricing online and have that price be consistent with the price they receive when they bring in the car and consistent with the final price when they pick up the car.”

Technician videos also can build trust. The CDK study found 55% of customers who bought a car from a dealership don’t trust dealers because of frequent upselling of unrequired services and not keeping them informed during the service process. Some dealers, she says, now do video inspections when vehicles come in for service. They start their inspection with the license plate and record everything working well and everything needing repair, then send the footage to the customer.

“The customer sees their car and what’s needed, and sees the technician tell them what needs to be done,” she says. “The dealers we have using this tool have seen an increase in CSI of 10-20% and a growth in customer pay labor of 15% to 30%.”

Finally, customers want convenience, which dealers can provide by offering premium services such as vehicle pick up and drop off. “Some consumers said they would choose a dealership over an independent one if the dealer would pick up the vehicle for service and drop it off when done,” she says. “Remote service where you send a technician to their house and perform the service at their house also is attractive to consumers. But dealers must carefully consider the feasibility of providing these services.”

Short of those services, dealerships can extend service hours to make it easier to pick up and drop off a vehicle, she says.

Include Incentives

Providing incentives also can draw customers back to the dealership for service, she adds. Provide a workflowfor service from online appointments to greeting customers, to full inspections and tracking service appointments. It also integrates with service pricing. They know when an adviser recommends a repair and when customers declined it, and they also know why. This information helps dealerships target customers with incentives, she says.

“If a customer declined service because of a lack of time, you could market to them differently    than if they declined it because they thought the service was too expensive,” she says. “To that second person, you might offer a coupon. OEMs also are doing rewards program where they build up points to use toward service.”

All these steps combine to meet a single goal—bringing customers back to dealerships for service. “Providing great service creates a customer for life,” she says.

Originally posted on F&I and Showroom

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