Dealership Service Processes May be Beneficial for the Dealership, But Not Customers
Ken Hite, Vice President at ClearMechanic
There is a lot of information available via white papers, OEMs, industry experts, and anyone else willing to voice an opinion as to why customers defect from franchise dealers.
Customers continue to defect from franchise dealers at an alarming rate, and unfortunately service retention continues to suffer and has for decades.
Have you ever considered why some dealership processes aren’t very effective with your customers? Consider the following;
1) Why do only 10-20% of your customers utilize your online scheduling tools?
2) Why do only 10-20% of your multi-point inspection processes result in an actual sale?
3) Why do your declined service mailers yield such a low return?
These are just a few dealership processes that dealers spend a lot of money on for very limited returns. Why?
Online Scheduling Tools
Let’s consider your online scheduling tool. Consumers don’t like to spend the time necessary to fill out various fields seen online today. Most information required per online scheduling is beneficial for the dealership; however, there is a lot of information required and/or requested that consumers simply don’t want to provide. If this process is not quick and easy, then returns will continue to be very small.
Multi-point inspections, although necessary and beneficial for the consumer, continue to have limited success. Why?
Franchise dealer service departments have a difficult time verbally conveying to customers why a particular component and/or service was denoted “red,” indicating it needs immediate attention. Simply marking an item “red” and attempting to verbally convey why the item needs immediate attention is a difficult task, even for the best service consultants in the business. This is why the MPI process continues to yield limited returns. This process is greatly enhanced through visual confirmation to complement the inspection list and service consultant phone call. Results will increase by 20-40 percentage points when visual confirmation is utilized with your customers.
Declined Service Marketing
Declined service communications have historically had very poor returns. Franchise dealers get excited if they see a 2% return. Why do we accept 2% as a standard within the industry?
When a declined service communication or lost customer mailer is sent out with only context that offers a 10-20% discount, what have we accomplished? This is the same context and format the consumers have seen for decades, i.e., very poor returns. Send out a “lost customer” mailer to “Facebook Generation” customers whose cars are off-warranty and who haven’t been to a franchise dealer in years and their response will be the following: “If I return to the franchise dealer, I’m going to get a big inspection list that tells me all these things that are wrong with my car, and it’s going to cost me a lot of money.” End result: the franchise dealer never sees this customer.
Wouldn’t your declined service marketing be far more effective if you included actual photos from the customer’s recent visit, providing hard evidence and illustrative diagrams which help to understand the service need? The franchise dealer could also get away from excessive discounting, which at the end of the day is killing effective labor rates.
For more information on ClearMechanic’s “visual declined service marketing” program, please view this overview presentation.
Dealer processes can be both beneficial for the dealership and more importantly for customers. It is one thing to implement processes that make the dealership more efficient and productive; however, if those processes aren’t benefiting customers, then your processes are failing. If your processes don’t cater to your customer, then your competitor will deliver processes that do.