Good times for automobile manufacturers might be a mixed blessing for their dealers. Car companies saw, and are still seeing, blistering sales. But that also means tight supply, and supply is like blood pressure. It’s nice if it’s a little low, but deadly if it’s too low. Industry average is about 62 days. Last fall, some of the hot-selling crossovers were at 24 days and the average for crossovers wasn’t too much higher than that.
Well, dealers still have to drive engagement, not to mention revenue. Service is where that happens, and that equation hasn’t changed: good times or bad, the margin is made in service. And when owners come in for regularly scheduled maintenance and various repairs and upgrades, dealers reap the benefits of a virtuous circle: service makes money and drives loyalty, and loyalty drives repeat sales and more service. But, what drives that service business is a great experience.
Jim Roche, SVP of marketing and managed services at dealership services firm Xtime, points out that owner loyalty is at about 50%; one out of two people don’t buy from you again. What is the role of service retention in that. “All studies show that if you are not servicing at dealership on regular basis, service retention is cut in half, and that lack informs loyalty,” he says.
And the experience an owner has with the dealership over time is far more important than it has ever been because of customer expectations defined by engagement with other brands. “We did surveys of dealership managers and principals around what is more important to today’s consumer, the repair and or the experience. And overwhelmingly it was at the experience, which is a sea change from how they might have viewed it 10 or 20 years ago.”
Parent company Cox Media did a consumer auto buying study last year that found that over 50% of people would pay pay more if you provide them a preferred experience. “What the consumer wants is, if you scrape away the other stuff, is value, convenience and trust,” says Roche. He adds that trust, for example, is about consistency of message. “I don’t want to be told on the website that an oil change is $30, on the phone that it’s $50, and when I mail it in, $25. Trust has to flow across the entire transaction.”
He offers an example outside the realm of cars: Domino’s pizza’s sales and delivery platform that combines real-time information with the ordering process. “If you click on your emailed coupon you are taken to a website presenting you with ways to configure your pizza — a million variations. You pay, and now you are told when it’s in the oven, when it’s in the delivery vehicle, and how many minutes until you get it; all this for a $10 pizza. It’s a really engaging experience that is consistent in look, feel and presentation.”
Contrast that with how more than a few dealerships probably still operate: you get something in the mail, then go to the dealership where you are greeted with a person with a clipboard asking you who you are, and why you’re there. “Contrast that with getting a digital link allowing you to schedule an appointment, showing up to someone greeting you with an iPad, who knows why you’re there,” he says. “The contrast between those two is night and day, and that goes back to quality of ownership that drives service retention and ultimately drives repurchase,” says Roche.