Many consumers have the perception that servicing at a dealership is more expensive than at independent service providers. Whether this applies to your service department or not, independents acquire customers through consistently advertising competitive prices. Unfortunately, this seems to be working well for them as they’re capturing more and more of your business.

So the first question to ask yourself: is your pricing in line with your competitors? Or maybe you’re still in the mindset that technicians trained on a certain make are worth their weight in gold. I often wonder why dealers are so price-competitive to sell a car, yet so many are unwilling to be competitive with their service pricing.

From personal experience as a service customer, I know that overpricing is an issue. Let me share a recent example: I went to my local dealership to get my vehicle serviced. I’m purposely leaving out the make—but I will let you know: it’s not a mid-line vehicle. When I arrived, they informed me that my oil change and tire rotation would be $112. I was taken back, so I asked the new advisor why it was so expensive. 

Let me state his response exactly: “If you want someone who knows what they’re doing, then it’s going to cost more money.”

I went into the dealership to speak to the Service Manager. “Please tell me you have some coupons for this?” I asked.

The manager said he would look for a coupon. I know him well, so I quietly stated, “This is a big reason why you guys are losing business to independents.”

For reference, they had a special running during my last service visit. I had a coupon for $69 for a synthetic oil change with a tire rotation included—which was fair—but there is nothing fair about $112.

Everyone loses in this scenario. I paid too much, and they have probably lost a customer.

So if your dealership isn’t being price-competitive, I hope this article will at least help shed some light on a consumer’s perspective. Jiffy Lube and Tire Kingdom technicians may not be trained on a customer’s particular model. But let’s face it: they have to be doing something right. They’re popping up on every corner like Walgreen’s and multiplying like bunnies! :)

I realize that not all dealers are deserving of an unfair price perception. However, I think that all service departments would flourish if they would address this issue head-on.

Consider adding best practices for your service advisors. Take the time to reassure the customer that your dealership will find the best and most economical way to take care of their vehicle. Here’s an example: “Mr. Customer, we need to look at replacing your two front tires soon, but you should be good for another few months. So, I’ll tell you what: let’s set your next appointment for three months from now and in the meantime, I will start doing the legwork for you. I want to make sure you get a good tire for an affordable price.”

By doing this, you have reassured the customer that you are cost-conscious and have taken a large burden off of them–which resulted in setting their next appointment. Now your chances of losing that customer to an independent have dropped significantly. Bottom line: we have to start making our customers feel like we have their backs.

Remember, it is wiser to offer competitive prices with a better experience than to offer higher prices because of experience.

When I consult with dealers about service mailers, I often find that their approach contradicts what they’re looking to achieve.

On one hand, dealers know how incredibly competitive the market is, so they send out service coupons to ensure customers don’t defect due to a competitor’s offer. But on the other hand, they don’t want to send service offers too often. The biggest concern I hear is: “I don’t want to train my good, loyal customers to delay service until they get a discount.”

This never makes any sense to me. Why wouldn’t you want to train your customers to anticipate an offer? Don’t you want them to open every communication you send and believe that you will give them the best price and reward them for being an AWESOME, outstanding customer? Isn’t that the whole idea: sell your customers on your service facilities, build loyalty and prevent them from defecting in the first place?

In my last blog, I talked about how to create more impact with your sales mailers by making sales events truly special. Well, the same concept applies to your service mailers: train your staff to make a big deal about any service coupons and offers. In turn, this will train your customers to open all your mailers and use the coupons you have spent good money to send (that IS what you want them to do, right?).

I’ve never walked into a dealership’s service department and been asked if I had a coupon. And that is six vehicles later: after a Camry, a Volkswagen, four BMWs and an Acura.

However, whenever I walk into a large chain store, they always ask me if I have a coupon. Some even go as far as printing out coupons for me to use on my next visit! I will be the first to tell you that I go back to the same store to use that coupon. I will also be the first to admit that I spend way more than I should every time I go back. So if that is considered training your customers to wait for an offer, then I say let the training begin.

It’s a simple process to implement at your dealership: have your advisors ask each and every customer if they have a coupon for their service. Just mentioning a coupon will train your regular customers to open your mailers in search of offers, rather than tossing them blindly into the trash. This will increase your service mailer open rates AND your marketing ROI. In addition, you’ll show your loyal customers that you truly appreciate their business.

So what happens if a good, loyal customer doesn’t have a coupon? They’ll probably say, “Can I get a discount anyway? I’m here all the time.” This is another good opportunity to go above and beyond for your customer and make them feel special. Give them a $5 or $10 discount on the spot, or perhaps $25 off if they have an additional service done on that day. Be creative and encourage them to watch their mail for future offers.

Frequency is another key to keeping your service customers engaged. In my opinion, a new offer should go out every 60 to 90 days at the very least, and it shouldn’t expire for another 60 to 90 days.

In the end, you’ll find that rewarding loyal customers is much better for business than constantly chasing down the ones in danger of defecting. Don’t get me wrong: marketing to both is equally important. If you’re not in front of any customer at the right time, they can defect in a matter of seconds—that’s why it’s so important to reward loyalty. Training your loyal customers to watch for discounts gives them a reason to open your mailers. And sending service coupons gives them the incentive to keep coming back.

Have you ever wondered about businesses that give discounts to regular, loyal customers—those who already expect to (and do) pay full price? After all, there’s a reason these customers are loyal: they obviously understand the value of superior service—so they should be paying full price, right?

From a dealer perspective, sending a discount to a loyal customer doesn’t make sense: most dealers would say they already give too much money away trying to recapture lost customers and attract new ones.

I hear this from Fixed Operation Directors and Service Managers all the time: “I am not giving discounts to the customers who are already willing to pay full-price!”

Like I said, it sounds reasonable…until YOU are the long-term, always-full-price-paying customer.

Let’s say you frequent a certain restaurant four to five times each month and spend quite a bit of money at every visit. Then one day you call the maître d’ and ask for that special table by the waterfall for your anniversary. He replies, “I’m sorry; I realize you’re an excellent customer, but we save that table for new or infrequent customers … we want to make them feel special.”

Ouch, right? But think about it: that’s exactly what you are telling your good clients when you give discounts to sporadic customers or to those that have never spent a dime in your dealership.

Our industry is one of the few that does not reward its good customers. Plus, in addition to not rewarding them, we continually remind them that they should be spending MORE money on their vehicle to maintain its safety or longevity.

I was discussing this subject with a longtime client a couple of years ago while planning his mail strategy and budget. He wanted to target lost customers but had no interest in offering discounts to current ones. The conversation then moved on to several direct mail promotions he wanted to do over the next few months. Once we agreed on quantities, he said, “Since I’m one of your regular clients and I do quite a bit of business with you, I should get a pretty good deal on my mail campaigns, correct?”

“But…you’re already a loyal and well-paying customer,” I replied. “Why on earth would I give you a discount?” The room went silent…but he got my point. And of course, I did give him a good price—after all, he was a loyal customer. He started paying attention to his steady, profitable, “good” customers, and hasn’t looked back; neither have I.

Automotive service is not an impulse buy: most people don’t even think about it until they need it. By sending out multiple offers to your loyal clients, you increase your chances of getting them the right coupon at the right time. Basically, you’re preparing them for when they have an unexpected problem: you want them to automatically turn to your dealership for the solution rather than a Tire Kingdom, Jiffy Lube, etc.—because these are the places that promote and encourage defection from your dealership to begin with!

These companies have the same Op codes that your dealership has. Once they capture your customers, they immediately start marketing to those customers with discounts…the discounts you were saving for YOUR defected customers.

The best—maybe the only—way you can stop or slow that defection is to keep your regular clients out of other stores, because your competitors are soliciting those customers whether you are or not. They’re more than willing to entice your customers with a discount coupon … but at that point, the upsell opportunity is theirs, not yours.

It’s an all-too-familiar scenario: John Smith pulls in just to get his battery checked. While he’s there, he sees a promotion about an oil change for $34.99. He thinks—as he is intended to— “My oil’s about due for a change anyway, so might as well get it done while I’m here.” And that’s the first step away from your service drive.

I‘m not ignoring the importance of upselling, but you can’t upsell the customer who isn’t there. And when it comes to bringing in customers, laying the groundwork with monthly offers not only works but it works well!

This is where direct mail comes in. It’s ideal for getting different offers to customers on a regular basis. Send a mailer that offers a free brake inspection … or a free battery inspection with $10 off if a replacement is needed … a free tire rotation with an oil change or an alignment check—you get the idea. These are the little incentives that add up to long-term value for your clients—and your dealership.  

So why spend money marketing to your good customers? Because if you don’t, your competitor certainly will.

Have you ever wondered about businesses that give discounts to regular, loyal customers—those who already expect to (and do) pay full price? After all, there’s a reason these customers are loyal: they obviously understand the value of superior service—so they should be paying full price, right?

From a dealer perspective, sending a discount to a loyal customer doesn’t make sense: most dealers would say they already give too much money away trying to recapture lost customers and attract new ones.

I hear this from Fixed Operation Directors and Service Managers all the time: “I am not giving discounts to the customers who are already willing to pay full-price!”

Like I said, it sounds reasonable…until YOU are the long-term, always-full-price-paying customer.

Let’s say you frequent a certain restaurant four to five times each month and spend quite a bit of money at every visit. Then one day you call the maître d’ and ask for that special table by the waterfall for your anniversary. He replies, “I’m sorry; I realize you’re an excellent customer, but we save that table for new or infrequent customers … we want to make them feel special.”

Ouch, right? But think about it: that’s exactly what you are telling your good clients when you give discounts to sporadic customers or to those that have never spent a dime in your dealership.

Our industry is one of the few that does not reward its good customers. Plus, in addition to not rewarding them, we continually remind them that they should be spending MORE money on their vehicle to maintain its safety or longevity.

I was discussing this subject with a longtime client a couple of years ago while planning his mail strategy and budget. He wanted to target lost customers but had no interest in offering discounts to current ones. The conversation then moved on to several direct mail promotions he wanted to do over the next few months. Once we agreed on quantities, he said, “Since I’m one of your regular clients and I do quite a bit of business with you, I should get a pretty good deal on my mail campaigns, correct?”

“But…you’re already a loyal and well-paying customer,” I replied. “Why on earth would I give you a discount?” The room went silent…but he got my point. And of course, I did give him a good price—after all, he was a loyal customer. He started paying attention to his steady, profitable, “good” customers, and hasn’t looked back; neither have I.

Automotive service is not an impulse buy: most people don’t even think about it until they need it. By sending out multiple offers to your loyal clients, you increase your chances of getting them the right coupon at the right time. Basically, you’re preparing them for when they have an unexpected problem: you want them to automatically turn to your dealership for the solution rather than a Tire Kingdom, Jiffy Lube, etc.—because these are the places that promote and encourage defection from your dealership to begin with!

These companies have the same Op codes that your dealership has. Once they capture your customers, they immediately start marketing to those customers with discounts…the discounts you were saving for YOUR defected customers.

The best—maybe the only—way you can stop or slow that defection is to keep your regular clients out of other stores, because your competitors are soliciting those customers whether you are or not. They’re more than willing to entice your customers with a discount coupon … but at that point, the upsell opportunity is theirs, not yours.

It’s an all-too-familiar scenario: John Smith pulls in just to get his battery checked. While he’s there, he sees a promotion about an oil change for $34.99. He thinks—as he is intended to— “My oil’s about due for a change anyway, so might as well get it done while I’m here.” And that’s the first step away from your service drive.

I‘m not ignoring the importance of upselling, but you can’t upsell the customer who isn’t there. And when it comes to bringing in customers, laying the groundwork with monthly offers not only works but it works well!

This is where direct mail comes in. It’s ideal for getting different offers to customers on a regular basis. Send a mailer that offers a free brake inspection … or a free battery inspection with $10 off if a replacement is needed … a free tire rotation with an oil change or an alignment check—you get the idea. These are the little incentives that add up to long-term value for your clients—and your dealership.  

So why spend money marketing to your good customers? Because if you don’t, your competitor certainly will.