A Mutually Beneficial Relationship
According to the Federal Highway Administration, Americans are putting more miles on their cars than ever before. And with an average vehicle age of 11.6 in 2016, according to the United States Department of Transportation, these vehicles are experiencing a lot of wear and tear. These factors, together with the fact that more new cars have been sold in the past three years than any other three consecutive years in history, means that dealerships need help servicing all of them. According to Jon Palazzo, vice president and general manager of the mechanical and fleet division at OEConnection (OEC), there are more than 240 vehicles for every service bay in the United States. With multiple visits per year—dealerships do not have the capacity to handle that magnitude of service work.
Not only are there more vehicles than ever, but these vehicles have significantly more advanced technology. Because of this, independent repair shops are looking to OEMs and dealerships to provide the most up-to-date information.
“Dealerships need shops and shops need dealerships,” Palazzo says.
The importance of this mutually beneficial relationship may seem obvious, but Palazzo says only about 20 percent of dealerships have the type of relationship they should with their shop customers today.
“The aftermarket has come in and made all of these relationships with shops,” Bonnie Coleman, product manager of the mechanical and fleet division at OEC, says. “They’ve found a way to serve their customers’ needs. Dealers need to start embracing that relationship as well.”
“If you don’t know who is buying from you and, more importantly, what their potential buying power is, then there’s a good chance you don’t have the relationship with that shop that you need,” Palazzo says.
Many dealerships may think they are doing everything they can to have the best relationship possible with repair facilities, but there are things that can be done to help foster a more successful relationship.
Palazzo says in his experience, many dealerships feel shops will call them and they don’t need to do any type of reaching out. The reality, Palazzo says, is shops will only call a dealership if they need something. This means that every day, dealerships are missing out on opportunities for building shop relationships.
Competing with the Aftermarket
“The perception from shops is dealerships are slow to respond and are too expensive,” Palazzo says. “What the aftermarket does well is they know what a shop cares about, prices accordingly and then services them well.”
In order to compete, dealerships need to find a way to combat these perceptions.
For example, Palazzo says that most shops would rather not use the phone to contact dealers. Most of the time, they’re put on hold by dealers, which wastes production time. Instead, dealers should look for a more efficient way to communicate with their shops. OEC RepairLink℠ offers 24/7 online part ordering, a feature that shops seem to really appreciate.
According to data collected, Coleman and Palazzo say the majority of orders made on RepairLink℠ come after dealership business hours.
Making every day operations easier for a shop will make ordering from a dealership more appealing over the aftermarket.
When it comes to competitive pricing, Palazzo says dealerships need to price parts according to what shops need. For example, if there’s a shop that a dealership is hoping to work with who specializes in brake jobs, the dealership should target that shop by offering competitive pricing for brakes.
Once this relationship has been established, Coleman says it’s up to the dealership to maintain it by delivering the best possible customer service. An online marketplace like RepairLink℠ is an effective way to do this. RepairLink℠ makes it easy to respond to orders in a consistent, timely fashion and provides shops the best parts information available from the OEMs.
The Marketplace Advantage
OEC methodology to provide broader and deeper relationships between dealerships and repair facilities is by taking a marketplace approach. OEC built a platform—RepairLink℠—that drives value for both a dealer and a shop. This easy-to-use solution was developed to better market OE parts, increase ordering efficiencies, and improve service levels between shops and dealers.
“The thing we like to say is OEC does in the virtual world what dealers and shops can’t get in the physical world,” Palazzo says.
Instead of having to call up a Ford dealer or go to a site for Toyota parts or another website for GM parts, shops can go to one website to order from 22 different brands.
Over 20,000 shops are actively using RepairLink℠, so it’s a cost-effective way to reach many different shops on a continuous basis. To make it even easier for shops, RepairLink℠ is integrated with some of the largest shop management systems, says Coleman.
“The value for the dealer is it’s putting them where shops actually are,” Coleman says.
RepairLink℠ not only connects dealerships with repair facilities, it also makes parts ordering easier to manage. For example, it’s “Best Price Forward” program allows dealerships to easily take advantage of, and keep track of OEM rebate programs and automatically offer shops the best possible price on OE parts. The rebate price is automatically calculated for the shop, insuring the shop is getting the best price available. Dealerships get reimbursed for the discounted amount from the OE after the transaction takes place. This means dealerships won’t miss out on any money-back offers from the OEMs while also providing shops the best possible price for those OE parts.