It should be no surprise that success in the fixed ops department is essential for dealerships. According to the 2020 NADA Data Financial Profile, dealers rely on their service departments for 30% of their net profits. But for customers of new cars, dealerships are seldom their first choice for service options.
It is estimated that more than 70% of new car purchasers take their service needs to a third-party mechanic, an enormous divide between dealership goals and customer behavior. What actions can dealers take to close that gap? A 2020 study conducted by the CDK Global Research and Insights team uncovered the reasons customers take their services elsewhere — shoppers want convenience, the right price, and trust. To win back and keep service customers, dealers must improve their business by appealing to consumer needs.
The Compelling Need for Convenience
Customers are busy, so they choose their service based on how easily it fits into their schedules. Research from CDK Global suggests that dealers rank below both independent and chain service providers when it comes to providing a convenient location and a streamlined way to schedule an appointment.
While moving to a more convenient location may not be an option for some dealers, there are other solutions — 60% of shoppers would love vehicle pickup and delivery to be available.
To make appointment scheduling more convenient, dealers should evaluate their current processes and apply available technology — 55% of shoppers would love remote servicing to be available. Extending appointment availability and offering the ability to schedule, track service, and pay remotely are key solutions that will help dealers stand out against competitors.
It’s All About the Price … or is it?
The second factor is price — or at least the customer perception that they will get a better price elsewhere. According to some estimates, 58% of service shoppers feel they would be overcharged at a dealership.
Consumers aren’t just hunting for a bargain — they have a fear of being taken advantage of. Rather than focusing on offering the best price, dealers should prioritize having consistent prices if they want to win and retain customers.
Trust is the Overriding Priority
Convenience and price go hand-in-hand with the third factor, which carries the greatest emotional weight of all — trust. Dealers must improve their communication with customers — 55% of shoppers say they don’t trust dealers and share their own beliefs that dealers frequently upsell unrequired services and don’t keep shoppers informed or updated during the service process.
Customer behavior can change, and so can dealerships. Lean into transparency so shoppers feel more secure when it comes to convenience, price, and overall trust. Offer consistent pricing guides, showcase individual level of expertise, and consider utilizing digital tools like technician video that allow customers to be with their vehicle each step of the way.
Keeping customers is just as important as winning them back from other providers. Dealers should leverage customer perceptions and find the features customers want most.
Dealerships can play to their strengths by emphasizing dealer knowledge through certifications and vehicle specializations. They should also promote their factory-certified parts — 35% of shoppers visit dealerships for them.
When asked what features matter most to service shoppers, responses showed an importance on enhancing communications to build trust through the following:
- Real-time service updates
- Price estimate at booking
- Market price information
Adhering to consumer needs can make a dealership far more profitable as customers begin to return and stay. While many new car purchasers take their service needs elsewhere, know that the door to that business isn’t closed but wide open for dealerships.
Kim Saylor is CDK Global’s product marketing manager.