Every dealer in the country has a service retention problem. Even luxury brands are losing a high percentage of their customers. The top luxury brands sell an average of 325K units annually. Luxury brands are selling 600K units over a two year period, yet 200K or 33% of luxury customers are defecting...yes, you have a service retention problem.

Traditionally, luxury brands have enjoyed much higher service retention indexes than non-luxury brands. I do find it alarming that luxury brands are suffering customer defection to the levels they are...why? Dealers have invested tens of millions on facility upgrades, extravagant customer amenities, complimentary car washes, 24 hour roadside assistance, complimentary loan cars, etc., yet consumers are still defecting.

I've blogged about the many benefits associated with Service Customer Pick-up & Delivery with loaner. There's nothing more powerful in sales, regardless of the product, than the customer experience. OEMs and dealers can build $100 million dollar facilities, offer all the amenities in the world, yet consumers will continue to defect until you make the service process convenient, not time consuming, and doesn't interfere with the consumer's day. Below are a few customer comments regarding Service Customer Pick-up & Delivery with loaner, and yes, they're from a high line dealership.

"Very necessary with busy families when a car goes down, the personal service can mean the difference where you buy a new car when it has to go to the shop"

"Takes the hassle out of car service!!!"

"Friendly and convenient. Sets the dealership apart from the rest! Thank you!"

These are only three customer comments from high line dealers out of thousands. If you'd like to review customer comments regarding Service Customer Pick-up & Delivery with loaner, happy to share.

The real problem is the fact that OEMs and dealers have run out of options on how to improve upon service retention, thus customer defection continues. OEMs and dealers have tried every remedy in the market place, with little to show. The consumer is calling the shots, and today's consumer has been spoiled by the convenience of the internet. Consumers prefer to shop from their home. Consumers have made it very clear that they don't want to visit brick and mortar, and that includes dealerships.

The customer's preference is to schedule a dealer service appointment, have the dealer's loaner brought to the customer's home/office, and then have the driver return the customer's vehicle to the dealership for service. This process is convenient, not time consuming, and doesn't interfere with the customer's day. Assuming you want to retain a greater percentage of your customers, and recapture lost customers, then Service Pick-up & Delivery is your only option.

What are some of the other benefits that dealers are experiencing when the customer's vehicle is brought in for service versus the customer bringing the vehicle in?

• Loaner out times reduced by 40-55%. If your loaner out time is 3.0 days, and your spending $100-$300K per month in loaner expense, how much more would you save if your loaner out time was reduced to 2.0 or less? Trimming 1.0 days off your loaner out time is worth how much more in customer pay GP, assuming a highline customer pay average of $800 per RO? That's a significant savings and increase in GP. The quicker your loaner turn, the better for your service drive and customers.
• Highline dealers are experiencing 30% plus increases in customer pay RO spend when a consumer's vehicle is brought in through Service Customer Pick-up & Delivery. Consumers spend more money when their customer experience is convenient, doesn't interfere with their day, and doesn't take any time on their behalf. Can you use an additional $240 per RO in customer pay?
• CSI increases of 40 points, per JD Powers, when Service Pick-up & Delivery with loaner is utilized.
• Service drive utilization is increased. Consider what happens in today's service drive. Bob has an appointment at 8A, John has an appointment at 8:30A, and Mike has an appointment at 9A...yet all three customers opt to show up at 8:30, all looking for the same ASM. Service Pick-up & Delivery eliminates this scenario. It doesn't matter when the customer's vehicle shows up, providing the customer isn't bringing the vehicle in. Your team can work with the consumer when it's convenient for the ASM, and that never happens.

Service retention doesn't have to be a problem. Service retention is easy to fix. Let's schedule a call and discuss Service Customer Pick-up & Delivery with loaner.

Ken Hite is Senior Vice President at RedCap. RedCap's technology and drivers are utilized by OEMs and dealers for Service Customer Pick-up and Delivery, as well as Consumer Test Drives conducted at the consumer's home. Ken has 25 years experience within the automotive industry, inclusive of retail, OEM, after-market and start-ups. The auto industry must learn to exceed customer expectations and implement business processes based upon customer convenience.