Marty Quinn doesn’t mince words when it comes to the importance of fixed operations: “Our goal as an OE is to drive customers back to a dealership and we use the service department to do that. We know that somewhere between that 6–8 visit period, we’ve hit a tripwire where customers will go back and purchase a new vehicle,” he says.
As the customer service operations manager for Toyota Division’s Cincinnati region, Quinn oversees 121 dealers in four states and is intimately familiar with that quest for customer retention. There’s a catch, however: The OE’s goal is almost entirely dependent on the individual dealer.
“It’s really on the retail level; that’s where it has to happen so that the things on the OE side have the biggest impact,” he says. “You still need that dealer-to-customer relationship.”
And here’s where the problem comes in, says Peter Kahn, senior director of research and insights at CDK Global: Consumers spent $310 billion on vehicle repair sales in 2014, but only 29.5 percent of that was captured by OEMs and dealers, according to NADA Data. And when asked by Google how familiar the consumer was with a list of automotive service center brands, the vehicle’s dealership service center came in dead last at 13 percent.
In fact, 40 percent of dealer service customers defect to independent service providers (ISPs) within a year after warranties end, according to a recent CDK survey. Customers leave the dealership at alarming rates, Kahn says, and for many dealers, it’s a major concern. Eighty percent of dealers said they were “very concerned” about losing customers to ISPs and 50 percent of those were “extremely concerned.”
As more dealerships turn to fixed operations departments as profit centers for the entire business, they are realizing that traditional marketing approaches are outdated and don’t effectively reach customers. Concurrently, vehicle maintenance queries on Google have increased 38 percent year over year (with 70 million queries in 2014) with 70 percent of drivers turning to search when deciding where to service their vehicles.
It’s a reality that’s difficult to ignore, Kahn says; digital marketing is not the future of marketing. It’s here and fixed ops managers need to get on board. Despite the digital evolution, however, that doesn’t mean the rulebook gets thrown out the window. In fact, digital marketer and former dealer owner Ryan Alford of DOM360 says that many of the same rules still apply. Marketing still comes down to the four Ps, he says—price, place, promotion and product—just tweaked in a way to better connect to today’s customers. Gaining back your defected customers begins with a clear understanding of your brand, securing the low-hanging fruit and taking steps to modernize your fixed ops marketing.