Second Phase of Cox Automotive Survey Gives Dealerships Insight into Consumer Preferences and the Need for a Revitalized Service Experience
REDWOOD CITY, Calif. (January 9, 2019) – With consumer expectations quickly rising, dealers are working to get ahead of the curve and build experiences that meet the needs of vehicle owners. Releasing the second phase of its 2018 Service Industry Study, Cox Automotive surveyed approximately 3,550 consumers and 404 franchise dealership employees to gain greater insight into consumer trends and perceptions around the service experience, and help dealerships identify new opportunities to increase retention and enhance profitability.
According to the study, while dealers may be leading their competitors in share of service visits, an estimated 70 percent of consumers who purchased or leased from a dealer did not return for service in the past year. This equates to roughly $266 billion in annual lost revenue across all franchise dealers.1
The good news is more than half of consumers reported they would be willing to travel farther and pay more for an enhanced service experience, helping overcome the top two barriers to dealership service retention. This means dealerships that want to grow share in customer-pay service need to be adopting new offerings and technologies, such as online bill pay, minimal-click scheduling via mobile devices and ride-share or valet service.
“With consumer satisfaction and loyalty dropping across all service providers since 2015, now is the time for dealerships to take a closer look at the experience they are providing their customers and upgrade to adapt to changing expectations. This will be particularly critical to retain millennials, who are the fastest-growing generation of car buyers today, but also the most dissatisfied with the current experience,” said Jim Roche, vice president of marketing and managed services at Xtime, a Cox Automotive brand that drives owner loyalty through its one Service Experience Platform. Roche is also author of “Fast Lane: How to Accelerate Service Loyalty and Unlock its Profit-Making Potential” and the upcoming book “Fast Break: Creating A Customer-Centric Operating Philosophy for Automotive Service.”
“Dealerships have a prime opportunity to increase customer satisfaction, and as a result, loyalty and retention,” Roche said. “Dealerships, though, need to develop a better understanding of consumer needs and expectations for the service experience. The insights from this study will help dealerships identify where the customer experience is currently falling short and what can be done to repair it.”
Ultimately, consumers are motivated by a service experience that is convenient and stress-free, revealing the following five opportunities for dealers to meet the demands of today’s consumer and help differentiate their business from third-party service providers.
“So many people in our industry will find a reason to look at the customer and say, ‘My job isn’t to see it your way but to get you to see it my way.’ But we need to look at everything through the eyes of the customer,” said Steve Nicholson, director of operations at Temecula (CA) Hyundai. “Other dealers want to try to make as much money as they can from every customer, but in parts and service we have the opposite philosophy of that. Rather than take a lot from a few, we want to gain a little from a lot. We want to see the customer more than once.”
1 Estimate based on revenue calculations from 2017 NADA Dealer Profile Data and the 2018 Cox Automotive Service Industry Study.
About Cox Automotive
Cox Automotive Inc. makes buying, selling, owning and using cars easier for everyone. The global company’s 34,000-plus team members and family of brands, including Autotrader®, Clutch Technologies, Dealer.com®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital®, VinSolutions®, vAuto® and Xtime®, are passionate about helping millions of car shoppers, 40,000 auto dealer clients across five continents and many others throughout the automotive industry thrive for generations to come. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with revenues exceeding $20 billion. www.coxautoinc.com