(Published in August 2012 issue of Dealer Marketing Magazine. Fixed operations cover story. See full issue online here.)
The “Facebook Generation”: Impatient, Skeptical…and Lucrative
Brad Simmons, CEO of ClearMechanic
Ask dealership service managers about under-30 customers and you will see a mix of exasperation and indifference. After all, this is the demographic that knows more about the inner-workings of an iPhone than a car. They often respond to additional service recommendations with blank stares, equal parts confusion and cynicism. Finally, service managers don’t hear from younger customers as frequently as older clients because – as a recent TNS and Sitel study documented – the Facebook Generation strongly prefers online communication to actual speaking.
Two Uncomfortable Truths
But, here is an uncomfortable truth: the younger generation is increasingly essential to service department profitability. A DME Automotive white paper revealed that about half of loyal dealership service customers are over 50 years old. Over 20% of loyal dealership service customers are over 65 years old and may never purchase another vehicle. Relying on these older loyalists is not a sustainable strategy.
And here is one more uncomfortable truth: dealerships already spend a lot of money trying to lure younger customers. They’re just bad at it. Every time a dealer spends money on mobile websites, social media or mobile applications, they are effectively targeting the Facebook generation. As this Nielsen chart shows, smartphone owners are disproportionately young. Stunningly, most 18 to 24 year olds making less than $15,000 own smartphones!
Despite devoting significant resources toward online channels, dealers have not earned the service dollars of young car owners.
A Suggestion to Reach the Facebook Generation
We know from the data above that technology is not a luxury for Gen Y customers; it is a necessity. Younger customers strongly prefer to do things online, whether it is talking with friends, interacting with customer service reps or paying bills.
With that premise in mind, let’s make a candid comparison of the dealership service process to other retail experiences. Booking a hotel room or airline ticket is incredibly easy thanks to dozens of web aggregators, like Orbitz and Expedia. Making dinner reservations is not only convenient, but almost fun, with OpenTable. Even distrusted service industries, like insurance providers and cable companies, offer simple web interfaces for sign-up, billing and support.
Dealership service centers, on the other hand, lag behind in online scheduling and support options. Given how intimidating the car repair process is for the average consumer – to say nothing of younger customers, who tend to be more skeptical – it is surprising that dealerships have not jumped at the opportunity to provide online scheduling and support outlets.
Dealer Scheduling Tools Fail for the Facebook Generation
The majority of dealerships do not offer real-time, 24-hour scheduling tools, which already alienates young customers who expect to make appointments at any time of day. But, even dealerships who do offer advanced scheduling tools make the process overly complex. Here are just a few common complaints you will hear from younger consumers when interacting with the best dealer scheduling tools:
Complaint: “Dealer scheduling tools often require the creation of a new user account and password.”
No one likes creating yet another user name and password, especially for an infrequent car service experience.
Complaint: “Dealer scheduling tools ask for information that is not necessary for the car repair appointment.”
Is it essential that a dealer know your home address or home and mobile phone numbers? Consumers believe this is marketing bait.
Complaint: "Dealer scheduling tools take three to five minutes just to make a simple maintenance appointment!"
By asking for non-critical information, such as trim and mileage, and requiring new user accounts, dealer scheduling tools take as long as an old-fashioned phone call.
Isn’t it time as an industry that we stop the flow of younger customers out the door? Based on the above survey comments and industry data, the solution lies within reaching the customers where they now live – online and on their phone. Imagine the possibilities if service departments acted more like the OpenTable’s of the world.