The Cox Automotive Maintenance and Repair Study states it clearly: the #1 reason car buyers go elsewhere for their automotive service is because of Value Perception. Right or wrong, they think they’re paying more than is fair for similar services at other repair shops.
In the past, I’ve delved into the details about value, including a reminder last week to implement a ‘features and benefits’ approach to selling service in the drive. But you only get that opportunity when customers first give you the opportunity. And if they think you’re overcharging before you get the chance, you’ve already lost.
It all starts with YOUR understanding of value perception.
Perceived value has little to do with the facts, if anything. Ask 10 people, "Who charges more for routine maintenance, a franchised dealer or an independent shop?", and 9 will tell you it’s the dealer. There’s a perception that dealerships overcharge.
The truth is surprisingly different than perception. From research as well as personal experience, dealerships are typically competitively priced. There are some outliers in every store that don’t lineup with the region, but most dealerships will be either less than 20 percent higher in price than an independent, or less than the competition.
Franchised stores are a different animal than independents, big box stores, and aftermarkets. They offer premium services like shuttle rides, loaner cars, specialized techs, and multi-million-dollar buildings with comfy lounges. Customers are right to think they’re in a different class than mom-and-pop shops, and that erroneously translates into the expectation they’ll be overcharged. They think it’s not just a little bit more, but double the cost to service at your dealership.
Your store doesn’t have to be the lowest-priced option, but it should be within 15 to 20 percent of others in your area. It’s been proven time and time again that the expertise and extra amenities customers receive at a dealer are worth a small bump in price. It boils down to displaying the value propositions you offer.
Hammer Home the Expertise
Your biggest advantage over non-OEM repair shops has always been and will always be your people. Both the technicians and service advisors, not to mention the support staff, are ‘tuned in’ to what their vehicles need. No aftermarket can hold a candle to it.
Review the Service Benefits
Other shops can match the salesmanship by reviewing features and benefits, but the fact is that most will not. If it’s something the customer can expect when they visit your service department, you’ll establish much more trust than you’d imagine.
Make Extra Amenities Obvious
Free breakfast with every oil change at your café. Loaner cars for overnight repairs. Complimentary shuttle service within city limits. Whatever unique service offers you have daily at your store, you need to make them clear to your customers. When they know what sets you apart from the competition, it’s a much easier decision to choose you.
Obviously, it’s tough (and expensive) to attract new customers. Your best bet (and cheapest) is to ensure that every car buyer that comes through your lot knows why it’s best to use your dealership’s service team.
Displaying a competitive pricing comparison with a provider like InteliChek is one way to do it. Whether on your website with a widget or on a digital screen in the dealership, you can show how your services stack up against other local businesses, dollar for dollar, service by service.