New Study: Even Loyal Customers Leave After a Bad Experience

This article was originally posted to DrivingSales.com 

What’s the easiest way to turn your dealership into an engine of profit?

Keep more customers coming back for service, more often.

Okay, maybe it’s not all that “easy,” but it is possible.

In fact, nearly 2,000 dealership service department customers have spoken, and what they had to say on the topic might surprise you. It’s all detailed in our 2020 Dealership Service Retention Report, and it’s loaded with valuable, actionable guidance to help make customer loyalty and retention not only a possibility, but your new reality.

Let’s take a look at some of the findings.

Why Would Customers Go Elsewhere For Service?

We’ll start with the big one. In what was perhaps the report’s most eye-opening revelation, we found that a single bad experience at the dealership puts it at risk for losing any customer, regardless of their loyalty.

Those with no allegiance jumping ship, totally understandable. But when nearly half (49%) of those who self-identified as “extremely loyal” customers said that they’re likely to consider leaving if they have just one bad experience at the dealership, we did a double-take.

No do-overs…even from our most staunch supporters. Seems a bit harsh, but perhaps it’s just the wake-up call we need right now.

On a lighter note, we can take solace in the fact that a quarter (24%) of the extremely loyal group said “nothing” would make them consider going elsewhere.

Here’s the high-level view of what might cause customers to go somewhere else for service:

And now the full view, breaking the responses down by customer loyalty:

Leaving for a lower price was the most popular choice among everyone (excluding the “extremely loyal”) with 46% of the 2,000 participants saying price is a big factor. When you break the numbers down by age, and 56% of consumers under 34 told us they would consider leaving their dealer service department for the lowest bidder.

Our main takeaway here is this:

For dealerships that effectively delight customers and prove value, the findings indicate that the vast majority of respondents would keep coming back — if the customer experience remains consistent and superior.

The fact that over half (53%) of all those surveyed said just one bad experience could send them packing is indeed a daunting prognosis, but certainly not incurable. Now’s the time to make sure you’re doing everything possible to create a memorable experience that retains and increases service traffic by implementing proven tactics and best practices.

But Enough About Dealership Defection…

What are the factors that influence and encourage customers to come back to your dealership for service?

Some of the responses here might provide you with much-needed validation. Others might illuminate areas for improvement.

Customer Service is Big, Quality of Work is Bigger

When asked to rank several items by how important they are when determining where to go for vehicle service, “quality of work” was the clear winner. Second most important was “price,” with “quality of customer service” nipping at its heels.

This is mostly good news for dealerships, many of which already pride themselves on the quality of their work and their service. However, it does highlight what service managers already know, low-cost competitors always pose a threat.

Overcoming the Price Factor

Sometimes, dollars and cents just make sense.

It’s a bottom line world, after all.

That said, there are ways dealership service departments can differentiate themselves and stand out from their competition, regardless of price points.

Focus on quality and make it known that the price your customers pay is well worth what they receive. You are the foremost experts and caregivers on their specific makes and models, no one else.

By emphasizing the competency of your technicians, ensuring your staff is delivering a delightful experience, and adding a valuable package of unique vehicle owner benefits that customers won’t find with cheaper competitors, many dealerships have no issue overcoming the price factor.

We found this is especially true for more senior customer segments, who don’t care as much about price as they do the quality of work and service.

What Services Do Customers Want From a Dealership?

The significance of the 2020 Dealership Service Retention Report can’t be overstated. It’s the only one of its kind—conducting research exclusively from those already getting their vehicles serviced at a dealership.

That makes this next point even more impactful.

44 percent of respondents prefer to get all their vehicle service needs performed at a dealership.

As for the remaining 56 percent, it’s the type of work needed that factors heavily into their decision for where to take their vehicle. The top five services that those consumers prefer to get from a dealership are:

1. Manufacturer-recommended maintenance (77%)
2. Electrical issues (63%)
3. Unknown issues/check engine light warnings (63%)
4. Oil changes (63%)
5. Transmission work (57%)

The three services they’re least likely to prefer to have done at a dealership are:

1. Battery replacement (18%)
2. Body work (21%)
3. Tire rotation or repair (33%)

Since people are less likely to return with issues related to batteries, tires, and brakes, it underscores the importance for service advisors to identify those issues while the customer is already at the dealership. Not only can this prevent the customer from going elsewhere for those services, but it also gives dealerships an opportunity to avert future issues for their customers before they even occur.

We Now Return to Your Engine of Profit

Ultimately, consumers who both purchase and service their vehicles at a certain dealership are also likely to buy their next vehicles at that same dealership, thus bringing in a new sale and more profits from services.

With nearly half the consumers in our study already planning to purchase their next vehicle at the dealership where they service their current one (and 45% undecided), every future service visit is another opportunity for your dealership to wow your customers and earn their repeat business.

Now that you know what keeps them coming back for more, and perhaps most importantly, the things that drive them away, you’re poised to become the only one your customers depend on for maintenance, tires, and repairs.

To dive even deeper into the unique perspectives of your target customers and discover the secrets to dealership service department retention, get your full copy of the 2020 Dealership Service Retention Report here.