Why Your Service Department Is Costing You Car Deals

It is said that while the sales department sells a customer the first car, the service department sells them the next two. Unfortunately, the inverse of this is true as well, and the service department can just as easily lose sales. It's not that they do this intentionally; in fact, they have probably maintained the same standards for years - which is exactly the problem.

The market has changed. Consumers have changed with it, yet most dealerships are managing their service customers exactly the way they were ten or more years ago.

Management of those very valuable customers might include sending them a letter or postcard stating, "according to our records, it's time for your next service" or worse, simply putting an oil change reminder on their windshield.

Not exactly the textbook definition of Customer Relationship Management.

Sure, this was fine years ago, but not today. For most of our customers, money is tight and that means those out of warranty will be shopping around when they need work done on their car. Some are looking for the best price, some are looking for the best value and some are looking for the best experience. In all cases, new research indicates that dealer service departments are coming up short.

53% of consumers feel that a locally owned independent repair center will provide a better value than either a new car service department (24%) or a nationally owned light repair center chain (23%). While that might not be surprising, this is: Most consumers (46%) felt that the locally owned repair center would provide the highest quality of repair - if price were equal. And the real zinger is that the new car service department was perceived to be the most likely to overcharge them.



Ok, so those poor guys in the service department have a consumer perception problem, too bad for them right? Why should those in the sales department care?

Two words: social media.

Ratings and reviews of vehicle service providers are taking off, and their impact is huge. 86% of consumers read online business reviews before making purchase decisions, and 90% say they trust these reviews (Kudzu.com survey of 600 users, December 2008).

Three out of four (74%) of consumers report that they choose companies and brands based on what others say online about their customer service experience (Society for New Communications Research, May 2008).

The reason this matters to the sales department is because dealership and brand loyalty is on the decline. Consumers are cross shopping more than ever and when doing so, they increasingly turn to social media and dealership ratings and reviews when deciding which dealership to give their business to. Poor service department reviews impact both service business and sales department business.

Progressive dealerships realize that they can use service department ratings and reviews as a competitive advantage, especially now when most dealerships aren't thinking about reviews. Those that are tend to be focused on building sales reviews, not service.

Think about how powerful it is to point sales prospects to independent review sites and show them how your dealership stacks up to the guy down the street. He may be offering the same model for $500 below your price, but his bad customer reviews compared to your good ones can swing the sale to you.

So how do we respond to this? Start by helping the service manager or dealer principal realize the problem. Share some of the data above with him. If yours is like most dealer websites, point out the ratio of information on your website that is sales related verses service related. Now compare the ratio of dealership profits from the service department verses the sales department. Kind of unbalanced isn't it?

Help them to understand that today's service marketing is about the 3 Rs:

Relevancy, Reputation and Results.

Relevancy pertains to the type of communication the dealership sends to its customers. Crude time-based "service reminders" don't cut it anymore. Communication has to be highly informative and highly specific to that customer's exact set of service needs and should include additional information relevant to the consumer, their vehicle and their interests. It should be part of a larger holistic approach to service customer retention that combines both relevant communication and content made available to your customer.

To learn more about the 3 Rs of service marketing, as well as how to grow your service customer base, read our new white paper, Service Marketing: New Solutions for New Challenges. Study highlights will be delivered in an upcoming webinar. All webinar participants will receive the free white paper before it is made available to the general public. For more information please visit: https://www1.gotomeeting.com/register/740829824



Or visit http://www.driverside.com/sales/demo/dealer/ to learn more about DriverSide and our service customer retention programs.