Turn your Oil Change Service into a Strategic Customer Retention Tool

Article written by Bill Springer. Perhaps the most commonly performed procedure in the new car dealership service department is the oil change.  Getting customers to return several times a year for this preventive maintenance service is perhaps the most telling indicator of how the customer views the dealership’s service department.  In today’s environment of fierce competition, rising costs, and declining warranty income, having the right strategy in place to attract and retain oil change customers is more important than ever before.  Convenience, a clean and welcoming facility and good service are the minimum standards that virtually all customers expect.  Beyond those basics, the reasons that customers choose to return to the dealership or go elsewhere for oil changes may be less apparent.  Being aware of these reasons is crucial to crafting the appropriate strategy to attract and retain oil change customers. The Cost of Customer Defection Studies have shown that the average new car dealership in the U.S. loses more than half of their new car customer’s maintenance business by the end of the first year of ownership, and by the end of the warranty period the vast majority of the customers maintenance dollars are being spent with someone else.  For an average size dealership, this translates to well over $1 million per year being spent by customers who purchased their vehicle at the dealership, but are spending their service dollars at quick lubes, tire stores, national chains, and independent shops. Recent studies have shown that customers, even those who indicate that they are “Very Satisfied” with their dealership service experience, often go to non-dealers for oil changes not...

Tire Replacement – Customer Retention and Revenue

“90% of dealership service customers that buy tires elsewhere never return to the dealership for service.”  Americans are keeping their cars longer than ever before, often for 10+ years. Tires typically must be replaced after six years (or more often, depending on road hazards and other driving conditions). In fact, tire replacement represents a $38 billion revenue stream, which is expected to grow even larger. Additionally, according to J.D. Power, vehicle owners are likely to purchase the same tire brand that was originally installed on their new vehicle.  This presents new vehicle dealerships the opportunity to significantly increase services department revenues through tire-related business. According to Scott Mueller, CEO of Dealer Tire (a distributor of tires to new vehicle dealerships) “Vehicles that were sold in the last five years are going to need tires in the next 2-3 years, which means that there is a real upside that has not been reached.” Dealership retail tire marketing share is currently 8.5%, up from only 1% in 2000. While this is significant, there is a lot of room for growth, which should make it the focus of dealerships’ sales efforts. The challenge is that consumers typically do not think of their dealerships when they need unplanned repairs, such as tire maintenance or replacement. In fact, 77% of routine service maintenance is performed outside of new car dealerships. New car dealerships must compete with these aftermarket competitors, who aggressively promote convenience and low price. New dealerships have an advantage because of their established relationship with customers, and because their technicians tend to be better trained and knowledgeable about the vehicles they sell....

6 Ways to Fill Service Bays Using an Online Strategy

The average dealership typically dedicates less than 5% of their website to the service department.  Yet only 10% of car buyers say they don’t look for service department reviews prior to purchasing a vehicle. Additionally, a major concern for dealerships is not necessarily inventory turn or overhead costs, it is the perception of the service department.  Fostering the idea that national service chains are a better option for services than a dealership. Adding to the disconnect is the fact that as the auto ages, the relationship between the dealership and the vehicle owner fades. Before you lose all hope, here are 6 ways you can make your service department stand out and fill those service bays with a strong online strategy.  Because your dealership is about more than just sales. 1.    Update & Optimize Online Branding Make sure your online listings are all up-to-date.  Verify your Google +, Yelp and all Social Sites have accurate information, not just about the dealership, but also the service department.  Verify hours are correct and provide contact information for the service department professionals. 2.    Evaluate/Modify Website Work with your web designer to develop a stronger service representation on the site.  Make sure the information is useful to potential customers and user-friendly. Provide special offers, coupons, and discounts.  Publish online reviews from service customers. 3.    Encourage Online Reviews Ask your customers to leave a review when service is completed.  Provide them with links to your website or other online review site and simply ask them to leave a review so that others can verify your service departments reputation and reliability. 4.    Establish a Social...

The Benefits of Texting; Communicate with Customers the Way They Want

  It’s time to rethink how you communicate with your customers.  95% of adults own a cellphone of some sort and 77% of those phones are smartphones.  Texting makes sense.  It is popular, it is fast and it is convenient for your customers and for your service department. Text messaging is the most used data service in the world Americans text twice as much as they call. 81% of Americans text regularly. 97% of American adults text weekly. Texting is 10 times quicker than phone calls. 33% of American adults prefer text to all other forms of communication. However, few dealerships use texting.  J.D. Power Customer Service Index Study found that only 3% of more than 70,000 vehicle owners and lessees received text updates regarding service work. The study also found that text messages are a more effective way of communicating and keeping in touch with customers.  While 55% of customers who received a phone call from their service provider would definitely return for service, a whopping 67% would definitely return if they received a text message. Why aren’t you texting? Many dealerships are reporting that texting provides big benefits in terms of customer satisfaction, as well as in their efficiency. The J.D. Power study also found that customers want to communicate with their service advisers by text. In fact, 27% of customers with mass market brand vehicles and 42% of customers with premium brand vehicles would prefer texting.  And it’s now surprise that 41% of younger customers would prefer to text. “It’s not surprising to see the preference for receiving updates through text messages continue to rise, but...

Dealerships – It’s Not Just About New Car Sales

Because improved technology and assembly line advancements have made automobiles both more efficient and more reliable with fewer warranty issues, car dealerships must find ways to add value to their customers, and increase revenue. Selling Happens at All Levels of a Dealership Increasing perceived value to customers, will not only increase repeat sales opportunities, but also add revenue through the Service Department. To accomplish this, dealerships must consider service and maintenance opportunities for current customers.  This is something that can be accomplished at all levels.  For example, salesmen should talk to new car customers about the value of regular maintenance to keep the car in top operating condition. The finance department might stress the value-added services offered. Both entities should stress that the level of knowledge and expertise of the dealership’s service department for their specific brand is more complete than other servicing operations that handle vehicle makes and models on a more global level. When customers do return for maintenance or repairs, it is service advisors who become the “face” of the dealership.  Spending a little time educating customers on the specific needs of their vehicle, and offering advice that will not only keep their car or truck in top condition, but could save money, time, and aggravation down the line. When small problems are addressed, larger issues that might result in a breakdown on the road can be minimized. Problems Can Be a Chance to Add Value When a customer returns with a problem, it is important to not only address and solve the specific problem, but also to do a comprehensive review of the vehicle, including...