Is Loyalty Dead in the Service Industry?

A loyal customer is a valuable asset to your dealership. But in an age where customers have more options and information at their fingertips, especially when it comes to their vehicles, the question must be asked—is loyalty dead in the service industry?

Customer Loyalty and Satisfaction Are Decreasing

The reality is that customer satisfaction is decreasing across all service providers and with it, customer loyalty. Vehicle owners are less sensitive to where their service takes place. However, because this decrease isn’t specific to dealerships, there’s no time like the present to invest in the satisfaction of your customers and go above and beyond to provide them with an amazing experience.

That brings with it a large challenge. It’s one thing to acknowledge the opportunity that comes with this decrease. But how do you convert those customers who are disloyal to all service providers into loyal customers for your dealership? It begins with service.

Service is Essential to Retention

Customer retention is the goal. But what impact does it make on the overall success of the dealership? That’s where the service department comes in.

According to Cox Automotive, 74% of the customers who came to the dealership for service in the last 12 months returned to purchase their next vehicle there, while only 35% of those who did not return for service came back for another vehicle purchase.

That means more than two times as many customers returned to purchase a car when they had built a loyalty to the dealership through their service department!

The Link Between Satisfaction and Retention

But how do you encourage disloyal customers to choose your dealership for service? In order to create satisfied (and loyal) customers, you need to understand their needs. What do your customers want from you and your service department? What will make them want to return to YOU again and again?

This probably won’t be consistent across all dealerships or demographics. But it’s essential to take the time to understand the universal benefits that your vehicle owners want—and then adjust the benefits to their desires.

If your dealership is located in a suburb with many young families, maybe they want a place where their kids can play while they wait for their vehicle? Or if you’re in a business district, offer vehicle pickup and drop-off to make it easy for busy professionals to get their car serviced at your dealership.

Customer satisfaction matters across all dealerships, but it won’t always look the same at each. Do the research to learn what will create satisfied customers which, in turn, will encourage them to return.

Boosting Customer Retention and Loyalty

If satisfaction is the backbone to customer service retention—and service retention is critical for customer loyalty, how do you accomplish it?

Ease of maintenance

Vehicle owners want maintenance to be a smooth and easy process, with the information they need at their fingertips. That’s why a strong online presence is important to target younger generations. Provide great maintenance and then back it by consistent communication with your customers. This makes service feel more natural and less like a hassle. You can also do this by investing in benefits that allow for more convenient service like longer weekend hours or drop-off services.

Price transparency

Price research, according to Cox Automotive, is the top online activity across all generations and demographics when looking for a service provider. In fact, 55% of vehicle owners say they would choose one dealership over another if it provided online estimates of costs.

That doesn’t mean price is always the main concern when it comes to customer retention. Value remains at or near the top of the list of what’s important when someone considers where to take their vehicle for maintenance.

This lesson is important for dealerships to learn: customers want price transparency but offering the lowest price isn’t always the best solution. It’s the transparency that builds a deeper trust between the customer and the dealership.

Customer retention programs and prepaid maintenance

What benefits do you offer to your customers that keep them returning for service? Programs that focus on customer retention can be an asset to help your dealership invest in long-term customer relationships by providing the resources and services that customers need, when they need them. Some dealerships are thinking along those lines by including prepaid maintenance services with the initial car purchase and using loyalty-driving services like DriveSure.

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Service loyalty isn’t dead. It just takes a different form as we look to the future. As a dealership, be willing to shift your mindset as customers care most about their experience, value, and convenience. Dealerships need to take advantage of this decreased loyalty across all service providers and offer an in-person and online experience unlike any other.

The result? Customers coming back for service and for their next vehicle.