What can a service department offer that actually drives customers to return?

When I discuss this question with dealerships, the conversation often turns to the additional things they provide outside of their standard repair and maintenance services. Some believe that things like coffee and free Wi-Fi in the waiting area are encouraging customers to come back. Others are much more focused on things like loyalty programs.

But in both situations, I find that most dealerships lump these offerings into the same category: amenities. Dealerships would be much better served by thinking about these added perks as falling into one of two categories:

Amenities vs. Incentives

Though they may appear similar at surface level, there are some important differences between an amenity and an incentive. If you look at Oxford’s definitions, they start to become clear:

    Amenity: a desirable or useful feature or facility of a building or place.

   Incentive: a thing that motivates or encourages one to do something.

The way I like to think about it is that an amenity is something that makes a customer more comfortable while their vehicle is being serviced, while an incentive is something that actually pushes a customer to come back.

This is why it’s crucial for service departments to think of their perks in these two categories. By doing so, they can easily see if they’re falling short when it comes to providing the things that will actually grow their business. 

Now don’t get me wrong, amenities are still necessary. But in today’s world, most true amenities are just table stakes. They’re expected by customers and they’re a major component of offering a good customer experience. But they’re unlikely to be the driving reason customers return.

Our 2020 Dealership Service Retention Report showed us just that. We asked dealership service customers which perks were most valuable to them and nearly all the top answers would fall into the incentive category.

Note: We called them ‘amenities’ in the survey question to avoid confusion because that’s how dealerships commonly refer to them.

How to Differentiate Between Amenities and Incentives

Now that the differences between amenities and incentives are clear, the first step is taking stock of what your dealership offers today to see where you may be lacking.

It’s not always black and white, but asking the following questions about each perk will help determine which category it fits in:

1. Is it designed to offer comfort to the customer while their vehicle is being serviced?
     Yes: Almost always an amenity
     No: Likely an incentive

2. Does it give the customer a form of banked currency (something they can use in the future)?
    Yes: Almost always an incentive
    No: Likely an amenity

3. Do new customers expect it?
     Yes: Likely an amenity
     No: Likely an incentive

4. Can you think of instances where a customer came in for service primarily because of this   
    perk?
     Yes: Likely an incentive
     No: Likely an amenity

5. Was it relatively inexpensive and easy to implement?
     Yes: Likely an amenity
     No: Likely an incentive

Where Common Perks Fall

So, with those questions to guide us, let’s see which category some of the more common dealership offerings fall:

Coffee & Wi-Fi: These clearly fall in the amenity category since they’re designed to offer comfort while a customer’s vehicle is being serviced.

Shuttles: While shuttles aren’t a waiting room feature, they’re still designed to offer comfort and convenience to the customer – making them amenities.

Online Appointment Scheduling: We’re starting to get in a bit of a gray area, but I consider online appointment scheduling to be an amenity (and a valuable one at that). These days, it’s easy to implement, expected by customers, and exists to provide a little added convenience.

Vehicle Pick-Up & Delivery: Out of all the perks on our list, this is the one where you could make a strong argument for either category. Its primary purpose is to offer comfort and convenience and it doesn’t provide banked currency, but it is unexpected, somewhat difficult to implement, and could be a driving factor behind a customer coming in for service. Ultimately, I like to consider pick-up and delivery an incentive, but my mind may change as more dealerships begin to offer it.

Loyalty Programs & Punch Card Programs: These are clearly incentives as they provide the customer with a form of banked currency and are designed to get customers to return to use their rewards. However, the effectiveness of these programs is debatable, especially when you look at the results from our Dealership Service Retention Report.

DriveSure: Our suite of renewable benefits (which includes roadside assistance, road hazard tire protection, and rental coverage, the duration of which is matched to your recommended return interval) fall into the incentive category because they provide a ‘banked currency’ in the form of services customers can use for free for a specific amount of time after returning to the dealership. Since customers have to return for regular maintenance to renew the benefits, DriveSure has often been a primary reason that customers return. And, if you look at the benefits most valued by dealership customers in our Retention Report, there’s no question that customers love this unexpected perk.

So how do your perks stack up? Are you offering enough incentives or are you relying too heavily on amenities?
For more information about how to get more service customers to return more often, be sure to grab a free copy of our full 2020 Dealership Service Retention Report here.

Learn how urgency, susceptibility, and perception influence customer retention.

In the automotive service industry, there is a widely accepted misconception that customers defect due to dissatisfaction with your dealership.

For this reason, most of us rely on our customer satisfaction index (CSI) score to help predict customer retention, believing that if our customers leave happy they’ll come back. But this isn’t always how it works.

Yes, CSI is important — and no doubt an effective measure of the level of engagement a dealership maintains with its customers — but satisfaction is not the only factor that impacts loyalty. At DriveSure, we’ve helped many dealerships with good CSI scores, but who still needed something to boost retention.

This post discusses three important customer retention influencers not related to your CSI — urgency, susceptibility, and perception — and outlines several recommended strategies for overcoming them. 

Urgency

The urgency customers feel toward addressing vehicle maintenance and repairs vary wildly. In some cases, circumstances warrant immediate repair. In others, owner complacency results in long delays before an issue is ever addressed.

Consider general maintenance indicators. These handy dashboard indicators are designed to trigger the customer to perform factory-recommended maintenance immediately. However, dealerships cannot simply rely on satisfied customers to return to them for service as soon as the light comes on.

Here’s why:

1. 1. Since the vehicle still operates while the light is on, the driver remains in control of choosing when to go in for maintenance. Some will pull into the closest repair shop, while others may ignore the indicator for months.
    
2. 2. The light does not tell the customer where to return. Once the light turns on, aftermarket providers have an open opportunity to lure customers away via marketing and other outreach.
    
3. 3. The lights are not perfect at predicting need. No two driving patterns are the same, so an issue triggered early for one driver may come later for another.

Unplanned repairs are even more troublesome for customer retention. When there’s an impending need for maintenance — for example, a flat tire, dead battery, or check engine light — vehicle owners often need to find the quickest solution.

In these situations, customers might defect because:  

1. 1. Your dealership’s location is not convenient. When a breakdown happens, there are likely many aftermarket alternatives between its location and your service department.
    
2. 2. Cost is not the most important issue. Often the need to get back on the road is a top priority, so a vehicle owner might choose not to confer with you. This may result in them taking the first resource available, often paying more than necessary, and not necessarily addressing the underlying cause of the needed repairs.
    
3. 3. Delayed maintenance needs performed. Customers who have the repair handled at an aftermarket shop will likely get delayed maintenance work done there too. This means the opportunity to fix the repair AND perform scheduled maintenance goes to the aftermarket and not your service department.

Susceptibility

Well-timed and well-crafted marketing messages can lure the most loyal customers away — even if they’re not inherently a price-hopper. For example, when a customer sees a compelling offer for a routine service, they may not think twice about having it done somewhere else “just this once.”

Here are three areas where susceptibility becomes a defection trigger:

1. 1. Factory-paid maintenance has expired. The sticker shock associated with routine maintenance that was once free can be significant. Consider being upfront about the normal cost of the service while it is free so there are no surprises down the road.
    
2. 2. Encountering mass-media marketing. Aftermarket alternatives routinely promote their ability to provide factory-recommended maintenance, so they are often top of mind for drivers. This becomes an even bigger challenge once factory-paid maintenance has expired.
    
3. 3. Returning to aftermarket repair shops. Customers who visit an aftermarket alternative for immediate repair can be tempted by offers and promotions based on time, mileage, and other relevant vehicle needs recorded in the aftermarket’s database.

Perception

Customer perception of the need to service their vehicle at the dealership they bought it from changes the further the customer is from the date of purchase. As this perception changes, common misbeliefs about dealership service centers can cause even satisfied customers to defect.  
For example, customers often wrongly believe that dealerships are:

1. 1. More expensive. All things considered, this is often inaccurate. Many dealerships today have a price comparison board to combat this misconception. They also often offer value-added perks that aftermarkets do not.
    
2. 2. Less convenient. This perception can be true for customers who purchase their vehicles from a location far from their work or residence. To counteract this, dealerships offer car rentals, rides, and remote delivery and pickup for their loyal service customers.
    
3. 3. Not quick or efficient. Unlike aftermarkets, dealerships will check for open recalls and provide the most comprehensive multi-point inspection, which is often why it takes a little bit longer.

Fighting Customer Defection with a Well-Rounded Strategy

Of course, understanding your CSI is important for establishing the foundation for customer retention. But focusing on CSI alone is not going to address all of the potential defection points for your customers.

To craft a well-rounded strategy for contending customer churn, we recommend:

1. 1. A comprehensive marketing strategy. Marketing that is grounded in customer awareness and serves all your dealership’s departments will help you stay top of mind with customers and educate them about the unique value you provide.
    
2. 2. Creating a sense of urgency. The value-focused marketing messages you create should be associated with a sense of urgency to cause the customer to act, and to act by returning to your service center.
    
3. 3. Avoiding short-term gimmicks. Tactics that pander to price shoppers can undermine your ability to be seen as a value-added leader in your market. Likewise, one-time offers can hurt your long-term sustainability as some customers may only be shopping for the perk.

Additionally, participating in programs like the one offered by DriveSure can help you create a greater sense of urgency, minimize susceptibility, and influence perception. For example, by requiring customers to return for service to renew their benefits you can immediately establish a deadline, which reduces the susceptibility of your customers to the marketing initiatives of aftermarket providers and ultimately changes the perceived long-term value offered by your dealership.

DriveSure makes it easy for dealerships to offer unbeatable vehicle maintenance and bring customers back for service, tires, and unplanned repairs — all without complicated loyalty programs or profit-cutting discounts.

____

Have you seen otherwise satisfied customers defect for any of these reasons? How are you bringing them back to your business?