Dealers find themselves struggling to keep customers in their maintenance bays, and stop them from going elsewhere, especially after free maintenance plans are up and the warranty is over. With longer oil change intervals, a higher quality of vehicles, and more competition than ever, dealers need a way to stop the bleeding of their customer base and retain the customers they started with in the sales department.
When looking at the problem of the eroding customer base in the service department, we need to start when oil changes and tire rotations are performed. This is the maintenance stage, and where many customers first defect. The majority go to one of two places: the dealer or the independent oil change and maintenance shops. With a dwindling customer base, we must ask a couple of questions. Why do so many customers prefer the independent maintenance shops, and what are the independent shops doing that we, as dealers, are not? Those questions can be answered when you look at them from a consumer perspective, and not as a dealer.
We believe we have all the reasons in the world for why a customer should come to a dealership to get their maintenance completed. We have factory-trained technicians, we use OEM parts, we know all of the applicable warranty items as well as any factory recalls that are outstanding, and so on. Yet, as a dealer base, we still lose a large percentage of our customer base to the independent maintenance and oil change shops. The logic is simple: Customers want quick, convenient, and inexpensive service from someone they trust. A key point is that even if the dealer and the independent are ultimately the same when we compare time to complete the job and final invoiced price, it’s the customer’s perception that trumps all.
This perception is that the independent quick and maintenance service companies have lower prices. This is one of the biggest factors that have led to customers defecting from the dealership. People look for a good deal even if they are upsold and the cost of the maintenance and type of work is ultimately the same as the dealer. The consumer is upsold only because they saw value in the offer to be upsold and accepted it. This gives them a feeling of value, and a sense of control and transparency in their vehicle maintenance.
The service advisors at our competition in question are very successful in presenting upsells or recommended services. Typically, it is a counter maintenance technician that advises the customer on additional vehicle needs, and they are trained how to upsell. They do this without hesitation and with consistency. Something many dealers lack in doing. Many service advisors at the dealership level tend to be shy when it comes to upselling to customers, especially if they are somewhat new in the automotive service industry. Considering the independent service advisor is not usually well experienced in the automotive service industry, they do a great job of upselling, and following process.
Secondly, studies show that besides price, the convenience and speed of the service is the next most important thing that comes up in decision making and is, in some cases, even more important than price. Having a “while you wait, no appointment necessary” oil change option iskey for people that live a busy lifestyle, in a world where we are almost always in a rush with someplace to go and something to do.
Good news is, there’s a fix for dealers, a way to retain customers – and albeit ever-evolving, it’s rather easy.
Time and time again we’ll find the dealer’s final price on an oil change package is the same as the final price the consumer will pay at an independent. So, the question becomes: “Why does the consumer see them as cheaper than the dealer?”
The reason is because they have a cheap or cheaper entry level price structure on their oil change packages. The independent’s pricing strategy relies on the fact that they know the majority of consumers will, and in some cases have to, upgrade the base oil change package. With such incredible upselling skills, and results, they can bank on this. With the independent’s upselling process adding control, transparency, and value for the customer, the customer trusts, and willingly upgrades.
From a dealership perspective, we do the opposite. We preload in everything the customer will need in our oil change package and make it a one-price-fits-all. A strategy that the consumer rejects. The oil change dealers offer undermines what today’s consumers are looking for, eroding the consumer’s perception of control, transparency, and ultimate value the dealer is offering.
So, how do we as dealers fix this? The answer is easier than you think. Copy them. The independent’s system works, and many customers see them as a better option. We need to realign how we do business to match the customer’s perception and wants. As you’ve heard many times, one’s perception is their reality. I need not say more.
As mentioned, customers demand quick and convenient maintenance service. With the independent having a line-up behind each bay door, it’s easy for the consumer to conceptualize their wait time. In the dealer world, normally there is a parking lot jammed full of cars, and no line-up format. Meaning a customer has to speak to an advisor, and just wait it out, before they become next in line for an oil change. Humans love visualization; that’s why the independent’s line-up model works so well. We also know that dealers have a history of making promise times, and not following through, or the time to completion is longer than the customer expects, even if their expectations are not realistic.
We also know that many dealers don’t have a way to complete maintenance work in a timely manner, or in the time it takes independent maintenance shops to do so. Having the customer leave the car for half a day, or wait a few hours, is a model that customers reject. This must be fixed, first and foremost, before we can entertain any of the pieces in mimicking an independent maintenance shop’s process to realign ourselves with customers’ expectations.
If your facility does not have an oil change pit or enough bays to accommodate the needed increase in vehicle turnover, create a team system – use two technicians in one bay. Have a detailed process about who is dealing with which part of the service and have a system similar to the “Upper Tech and Lower Tech” one that independents employ. Designate bays closest to your
customer waiting or check-in area, as leaving the vehicle in sight gives the customer added comfort.
Contrary to popular dealer beliefs, waiting until after the multi-point inspection and maintenance service is done to pitch the majority of the recommended services is the wrong way. Having the technician look at the vehicle first before starting the maintenance job, and presenting it to the customer right away, helps the customer understand that you are looking out for their best interests, and allows room for the work to be accomplished during the rest of the maintenance job. If you do the opposite, and present recommended services and your multi-point recommendations after the original maintenance work is complete, it’s far too late. The customer is ready to leave. Normally, they are not ready to invest more time into waiting for more service work to be completed.
Having a separate service advisor take care of the express customers makes the interaction more consistent and comparable to the independents. The “show and tell” method of selling is most effective when trying to relay your point on why additional services are required. We have the customer here; why not show them what we found? Walk them out to the vehicle or bring things like filters and fluid comparisons directly to them,
just like the “Upper Tech” would do if you were in an independent maintenance shop. For the customer, this process adds control, transparency, and trust, which they expect.
Through the process we can show the extra value that being an OEM dealer has to offer. Advise the customer that you have a journeyman technician supervising the lube techs, let them know that you were able to inspect the safety components of their vehicle, and explain the warranties that come with your work. Use your inspection form software to show them everything you checked even when everything passes.
We can see consumers have a process preference based on how they are handled during routine maintenance service. The consumer has a negative perception when it comes to the dealer, but this is easily fixed. To correct course and stop the hemorrhaging of our customer base, we just need to mimic what the customer favors. Implementation of the entire independent maintenance process is key to success and winning over customers.
David Hennessey is an experienced dealer Service Operations Director, and is NADA trained. David has spent his entire career in the service department, starting as a licensed journeyman technician. Rising through the ranks, David worked his way up to Service Operations Director, and now works with a large auto group. Known for his ability to turn around slumping service departments, David’s experience and insight has proved valuable for many within the industry.David Hennessey, Service Operations Director