5 Reasons Your Dealership Isn't Capturing Service Work
The numbers are startling: Less than 1 in 3 service visits are conducted at a dealership. Dealerships have a 30 percent share of service visits (17 percent of which are at the dealership where purchased, and 13 percent are other dealerships) while ISPs have 25 percent and quick lubes have 14 percent. The reasons why dealers are not capturing more of the maintenance and repair market fall into five main categories, according to a Cox Automotive study:
1) Value perception
Dealerships win when it comes to two of the top attributes most sought after by maintenance and repair customers: quality and trust. However, dealerships lose when it comes to perceived value.
More than one-third of customers are unaware of their vehicle service schedule and/or recalls, and over half rely on maintenance/service/recall notifications from the dealership and/or the manufacturer. According to the study, customers prefer to receive reminders and recall information via email.
3) Customer experience
Today’s consumers have come to expect a seamless online-to-offline shopping and buying experience, yet most car owners do not enjoy the level of convenience and attention they receive when shopping for other goods and services. Over half of maintenance and repair services customers do not use the Internet for service-related activities. In fact, 69 percent are scheduled by phone, with the rest scheduled equally between in person and online. However, 45 percent of consumers who do not schedule online do not know that the option exists, although 76 percent of those who did schedule service online would be willing to do so again.
The study also revealed the importance of crafting a personalized offline experience for retail customers. Specifically, personally introducing a consumer to the service manager or representative increases that customer’s likelihood of returning to the dealership for maintenance and repair services. While only 41 percent of car buyers were introduced to the service department at the time of their vehicle purchase, over half of those customers said it came into play when deciding where to get their vehicle repaired. In fact, customers who were introduced to the service department at the time of purchase return for service 1.5 times more in the past 12 months.
4. Warranty/service contract expiration
Warranties and service contracts affect customer satisfaction and loyalty. Seventy-eight percent of those who paid a service visit to the dealership where they purchased their vehicle and were at least partially covered under warranty said they were “very satisfied, I always go to them for service” and 86 percent of those who paid a service visit to the dealership where they purchased and were at least partially covered under a service contract said they were “very satisfied, I always go to them for service.”
The distance from the customer’s home to the brick-and-mortar dealership is a major barrier to capturing a greater share of car owners’ service business. Roughly one-third of customers returned to the dealership for service if they lived more than 20 miles from the dealership. Convenient location is often the deciding factor when it comes to choosing a service provider: 70 percent of all service visits are less than 10 miles from the customer’s home, while 40 percent are done less than 5 miles from home.
The numbers included in this article are based on data collected in 2015 and published in the Maintenance & Repair Study from Cox Automotive.