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Denim Simkins

Denim Simkins Director, Fixed Ops

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Increasing Customer Retention starts TODAY

As a general manager or store director you are approached daily with the latest and greatest technique to attract more customers to your service department. Although this is a very necessary action to grow your business and increase your customer database, I would suggest to look within your dealership walls for the actions that are causing more than seventy percent of your customers to defect after the warranty time period has expired. The real underlying issues are our customers are skeptical due to a lack of trust and we have years of history to overcome to earn our customers business and loyalty back. The good news is you do have a “core” of customers that are loyal and continue to use your service department and will purchase their next maintenance service or service repair from you. In addition every month your sales department continues to fill the front end of the funnel with new customers that service has the opportunity to hold on to and never let go.

 

Lets start today, actually lets start on the next customer that is purchasing a vehicle from you right now or coming in your service drive and look at it as your goal to reduce or narrow the opening at the bottom of the funnel to restrict the defection rate. Lets face it, our customers have many options, as I do when I’m picking up my morning coffee but I choose to go to the same place that I have built a relationship with and barring a major catastrophe I don’t see a reason to defect. I know that selling and servicing a customer’s vehicle is a lot more complicated than making a venti skinny sugar free vanilla latte but the basic fundamentals of building a relationship are very similar.

 

Stephen Covey said, Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.

It starts with building trust from day one. According to analysis of Better Business Bureau complaint data, consumers rank automotive repair providers in the bottom one percent of all service categories. So how do we earn the customers trust? Simple we become transparent and allow the customer to steer the enterprise during their service visit and we encourage the customer to be involved within the repair process. For instance showing the customer the dirty air filter instead of just telling them or taking a customer out to their vehicle and let them look at the oil leak helps break down that barrier of distrust. When a customer is not at your store a video or quick picture will tell a thousand words in your favor, again building trust.

 

High Effort = Low Customer Retention

Assess how convenient it is to do business with you. When a customer is choosing a place to do business, convenience is a major factor in the equation when they are pulling hard earned money out of their billfold to spend with you. This goes a lot deeper than just being open more hours. Have your significant other call the store and ask to have their car serviced, maybe have them ask a few questions about what service they would need to do at this time on their vehicle. Have them report back to you how easy it was to get an appointment at 4pm on a Friday afternoon or better yet maybe ask for a Saturday service repair and see the response they might receive. Look at your operation as an owner and remove yourself from the car business (I know this will be extremely difficult) for a minute and analyze every customer touch point and determine if your operation is convenient for your customers in all aspects that are trying to do business with you.

 

In a recent Critical Mix – Google Services Path to Purchase study of 1500 drivers, the number two most important feature when deciding on a vehicle service center was knowledge and expertise.

With information being readily available on most any thing possible it is hyper critical to customers that you are the subject matter expert. Having expert knowledge has become expected but then it is also recognized and acknowledged by more than fifty six percent of the customers. Those who can display their knowledge in a customer friendly way will be rewarded for their efforts. Customers want someone that will answer their question completely and in their terms. A solid training program starts building the foundation but a continuous learning strategy is a must. Those who demonstrate their knowledge will be rewarded with customers wanting to choose you for their repair business.

 

When surveyed, customers routinely say the reason why they don’t go to the dealer for maintenance and repair work is due to the perceived high cost.

When reviewing your pricing strategies a couple things to keep in mind is price does not always mean cheaper. Most salespeople agree that overcoming a price objection is a matter of conveying value. At the dealer level we have the opportunity to talk about the value of the service and explain a fair price does not mean the cheapest price. In order to do this you need to be aware of your competitors pricing and know that a customer today is researching other options on price when standing in your service drive discussing the services needed for their vehicle. A fair price along with a conversation about value of services will help your customer feel better about the perceived cost.

 

Attention ALL executive managers its time to roll up your sleeves and jump in feet first. Immerse yourself in fixed operations and become aware of the points within your service process that are causing your customers to defect at an aggressive rate. Spend some time with your service and parts staff and talk to them about some of these areas of opportunity and ask them how they feel they can improve and provide a better service. Be ready to take in an earful, but with your knowledge and expertise you will be able to help direct the fixed operations team in creating a customer centric process that will improve your repeat purchase cycle. Simply focusing in on 4 basic tactics, trust, convenience, knowledge and price and you will start to close the hole on defectors and build a strong and loyal customer database for years to come.

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