The Dealership Service Conundrum – Challenges and Solutions for Marketing Fixed Operations

The Dealership Service Conundrum – Challenges and Solutions for Marketing Fixed Operations
Posted October 2, 2019 by Kat Züber

As automotive retailers, we know what it takes to advertise and deliver an exceptional customer service experience within our sales operations.  For years, an increasingly competitive automotive landscape, stimulating retail experience expectations and margin compressions have caused us to rapidly innovate our showrooms. What attention have we given our dealership service operations during this same period? As dealers prepare for yet another shift in focus to fixed operations, are we considering the most basic aspects to create an effective division for customer loyalty? More importantly, do we understand the customer’s standards enough to properly deliver on our service initiatives? After all, a $19.95 oil change special is common, but can we deliver this entry-level service within the 45-minute timeframe a customer expects, and do so with remarkable experience? Perhaps the answer is no. So, instead what else can we deliver on?

Fixed operations have always contributed significantly to total revenue for stores, however, according to the recent Cox Automotive Inc.’s 2018 Service Industry Study[1], service is contributing more to the gross profit than in prior years. It is not uncommon for dealership service departments to help relieve declining sales revenues. Perhaps your store is currently measuring utilization, effective labor rate and billable hours as indications of a healthy service department.  What is your store doing for the service customer’s experience?

As we experience gross profit challenges in vehicle sales, it’s more important than ever for us to understand how the changing landscape is affecting shopping behaviors. Especially with the introduction of the gig economy, we’ve seen an acceleration of requirements placed by shoppers on our stores. Car owners expect flexibility, speed and the overall customer experience in every transaction and these requirements may be leaving our service departments behind.

Consumer Expectations in Dealership Service Departments

People are seemingly busy. When has that not been true? Even so, people today are also less attentive. According to a study published by Microsoft Corp.[2], in 2014, the near-obsessive use of technology has shortened our attention spans from 12 minutes down to five. Most recently, new studies indicate this shortened attention span continues to exponentially decrease. In a new study[3], conducted by a team of European scientists from Technische Universität Berlin, Max Planck Institute for Human Development, University College Cork, and the Technical University of Denmark, indicate our collective attention span is still narrowing even more significantly. We are preoccupied and highly inattentive consumers; a generation of very busy goldfish.

As a result, consumer expectations have been met and shaped by the prospect of speedy and customer-centric services. From Amazon delivery services to Door Dash; consumers expect short and easy transactions with even the most complicated requests, including automotive services. In come the Jiffy Lubes or quick service retailers of the world. These automotive service retailers are designed from the ground level to answer this increasing time and service requirement placed by consumers. Responding to these demands, quick service retailers have introduced instant service forms with easy quote processes and streamlined call centers to aid in the customer’s overall experience. They have apps for readily available notifications and solid remarketing efforts to help re-engage consumers. If you call your local a Jiffy Lube today for a quote, in seconds you’ll know exactly what to expect when you drive into the bay. They’ll even send you an additional coupon to your preferred method of contact for your visit. A massive step forward for automotive owners and a noticeable setback for automotive dealers nationwide. It’s never been easier for shoppers to quickly make decisions, set appointments and complete transactions online or over the phone.

Conversely, it’s never been more challenging for dealerships to meet these expectations. Call the dealership service department at most dealerships and expect to wait on the line. Once you arrive, you’ll probably need to wait again for someone to check you in and hopefully, you were seen before you drove in. Worst case is when the store has not proactively prepared for your visit. Now, you’ll need to wait for the store to locate the parts department and the corresponding technicians. In fact, according to the same Cox Automotive Inc.’s 2018 Service Industry Study, 2 of the 5 top frustrations are related to the time consumers spend waiting.

30% of customers were frustrated that the service took longer than expected, 20% were annoyed that the service technicians tried to push additional services, and 13% were disheartened when they were stuck waiting in line even though they had an appointment. Your experience at a retail automotive store should never mimic that of a California DMV visit.

Customer-Centric Service

This is probably the most important and least incentivized aspect. We have always been a transactional rather than a relational industry. If your sales operations have not changed to meet the growing experiential commerce demand, you may want to start there. If your store continuously meets customers’ expectations from within the sales side of the business, then these will come to you as no surprise when visiting the service department. Dealerships often have more capability to handle complex vehicles with factory-trained technicians, diagnostic equipment and state-of-the-art facilities. Imagine these factory-trained technicians are like doctors at a hospital; highly trained in their area of expertise but possibly inexperienced in customer relations. Patients bring fear, anxiety, and self-pity into the exam room just as they may into the service department. Just as it has always been the doctor’s responsibility to calm their fears and provide hope, a service technician should also be trained in the art of interpersonal professionalism to help settle any potential qualms.

Take a tour of your service department. Mystery shop your competitors and become aware of the service you are delivering your customers.

 

 

  1. The Cox Automotive 2018 Service Industry Study – https://xtime.com/wp-content/uploads/CoxAutoSIS.pdf
  2. Science: You Now Have a Shorter Attention Span Than a Goldfish – Kevin McSpadden – https://time.com/3858309/attention-spans-goldfish/
  3. Abundance Of Information Narrows Our Collective Attention Span – Dtu https://www.dtu.dk/english/news/nyhed?id=246BBED3-8683-4012-A294-20DB7F0015F4