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Jason Unrau

Jason Unrau Freelance Contributor

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Is There Value in Your Service Pricing?

It’s been mentioned several times, yet it’s still a valid point. Customers are choosing aftermarket service centers over their selling dealership seven times out of ten, according to the Cox Automotive Maintenance and Repair Study. The top reason customers are choosing another service provider remains the same:

They simply don’t perceive value at the dealership’s service department.

While there’s no question that customers know OEM parts are the right choice and the dealership has knowledgeable, trained staff that know their car best, they don’t think they’ll get fair pricing on after-sales service.

Whether their perception is true or not, it’s real. And even from someone in the automotive industry who can see through it, here’s an honest example.

Off-Target Pricing

The reason many Mitsubishi buyers choose the brand is the old adage, ‘bang for your buck’. The same goes for this guy whose wife owns an Outlander SUV. When going through the debacle of trying to book a service appointment online (a plague rather than a profit for this store), the recommended service pricing stopped me dead in my tracks. I quickly abandoned the online appointment.

Our vehicle is due only for a basic oil and filter change. All else is up to date according to the maintenance guide, and luckily, the online system wasn’t suggesting anything more other than a tire rotation and brake fluid change for towing use only. Up here, we have winter tires that have just been installed, so no need to rotate the tires, and we don’t tow with it. But the $109.95 service B says it’s for a lube, oil, and filter, cabin filter inspection, and a whopping seven-point inspection. And lucky me, the tire rotation is included for free.

So, a Service A would do, but at the same cost as the Service B. So, for $110, I get an oil change and a seven-point inspection. What value.

Comparatively, a local Midas advertises a $29 conventional oil change or a $59 synthetic oil change. In the details, it includes a tire rotation and a “Courtesy Check including visual brake check, battery, air filter, fluids, belts, hoses and more…”

So, the best the dealership can do is tell me I’m paying $50 to $80 more for my service?

Customers are Discerning

I’m a consumer, just like everyone else. I believe that customers can and will do the exact same seven minutes of research to find a better deal. There are two things that need to be addressed at the dealership.

The pricing isn’t appropriate for the market. Clearly, service management hasn’t done a market pricing comparison to position their department as a value.

There’s no indication of value. I’d be willing to bet that 3 of 4 people abandon online service appointments at exactly that same point in the process. Seriously, a seven-point inspection at the dealership? I can rattle off two dozen items that are checked visually that could be mentioned, not just a measly seven. If that’s all the care a customer thinks their car is going to get at the dealership, then why wouldn’t they look at the aftermarket provider instead?

 

I take comfort knowing that the dealers and managers that read this are striving to improve their customer experience. Still, it’s a good practice to go through your online service promotions and the appointment process to see if there’s good reason for customers to choose your service department over the less-expensive yet less specialized competition.

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