How to bust three very important myths in your service lane
Before we get to that, it’s time to bust some myths. This isn’t a new episode of myth busters, but it is the time to talk about how to bust three very important myths in your service lane.
In this last month’s edition of Service Drive Magazine, Jim Roche, SVP of Marketing and Managed Services for Xtime, talks about how customers will remain loyal for the right experience, once certain myths are busted.
Myth number one– most customers prefer morning service appointments. It’s important here that you space appointments throughout the day to maximize shop capacity.
Myth number two– recalls are always a negative experience. Nearly 25 percent of all service appointments are recall related. Roughly half of recall related appointments generate customer pay- which means your shop is earning an additional nine thousand 800 dollars in revenue each month.
The final myth– tablets don’t enhance the service experience. In fact, tablet usage increases CSI scores by an average of 72 points. Customers tend to trust technology over people. When trust rises, so does retention.
Why ownership experience is the key to service retention: 3 myths busted
Customers Will Remain Loyal for the Right Experience
You’ve heard modern customers are hard to hold onto. You’ve heard they have too many options to continue visiting the same dealership year after year. You’ve heard they don’t care about experience and they’ll go wherever the price is right.
But in reality, today’s customers are eager to be loyal — if you give them the service experience they want.
When it comes to service retention, nothing matters more than service experience … not even the vehicle. A recent study shows that customers who give their vehicle a one-star rating, but have an excellent service experience, have the exact same repurchase potential as customers who rate their vehicle five stars out of five, but have an average service experience.1
Yet somehow, the industry’s service retention rate is only 51%2 — meaning that most dealers lose every other customer who walks through their door. That means they’re also giving up substantial revenue and profit potential. According to GM, a 1% increase in owner loyalty increases revenue by an additional $700 million per year.3
Improve the ownership experience, increase service retention, increase profits. Sounds simple enough, right? So why aren’t more dealers succeeding?
Misunderstandings about what customers are really looking for, and what an outstanding ownership experience really looks like, are holding dealers back. To change that, it’s time to do some myth busting.
Myth No. 1: Most customers prefer morning service appointments
Decades of conventional wisdom have convinced dealers to front-load their service schedules. This seems logical: Morning slots are convenient for 9-to-5 workers who would otherwise have to negotiate time off. But “working” is no longer the same as “being in the office.” With flexible hours and work-from-home policies, anywhere with a Wi-Fi connection can be an office — including the customer waiting room.
While morning appointments are still the most popular (years of customer habit make this a self-fulfilling prophecy), 44% of appointments fall between 11 a.m. and 4 p.m.4 Ignoring this can result in unfilled service appointments, underutilized shop capacity … and an average loss of $135 in customer pay for every wasted service hour.5 Dealers who space appointments throughout the day maximize shop capacity — and deliver an ownership experience that matches customers’ schedules.
So how can dealers make this happen? First, use marketing software to create strategically segmented messaging that promotes unfilled appointment hours. Customers can take the next step using online scheduling software, choosing their preferred time from all available slots. Price elasticity can optimize appointment scheduling even further. Dealerships that take a tip from websites like Priceline.com and offer special discounts on less-popular time slots and can bring in more customers throughout the day.
Matching appointments to customer schedules does more than maximize shop capacity. It decreases wait times during peak hours, prioritizes convenience … and delivers an ownership experience worth coming back for.
Myth No. 2: Recalls are always a negative experience
If it seems like recalls dominate the automotive news circuit, that’s not an accident. Recalls are also sometimes part of the ownership experience. Nearly 25% of all service appointments are recall-related.6 Many dealers may see recalls as a troublesome, inconvenient process, offering nothing to gain in terms of customer loyalty.
But recalls are in fact a great opportunity to improve customer satisfaction. Because all recall maintenance procedures are fully covered by the OEM, a customer can drive up, easily alleviate a safety concern and drive away without paying a cent. It doesn’t stop there — recalls increase profit as well. When a customer completes a recall procedure without spending any money, they’re likely to take care of a maintenance issue they’ve been deferring while they’re in the service drive.
This is more common than many dealers realize. Roughly half of recall-related appointments generate customer pay, which amounts to an additional $9,800 in monthly revenue.7 Vehicle owners are taking their appointments above and beyond the recall procedure — good news for them, and good news for dealers.
To transform recalls into service retention and revenue, dealers must deliver a reassuring, convenient ownership experience that builds customer trust in their vehicles … and the dealership. That means using online scheduling software, so customers can quickly and conveniently choose their preferred time slots. It means accessing customer records ahead of time and having the right parts and equipment ready to go. And it means suggesting additional procedures customers actually need, when they need them.
Myth No. 3: Tablets enhance the service experience
Startup hurdles, technical difficulties, the belief that an existing DMS already gets the job done … dealers have found plenty of excuses not to bring tablets into the service drive. Less than 25% of dealerships currently use tablets,8 but those that do are making new strides in convenience and value.
Today’s busy customers don’t have time to waste waiting for service advisors, and with tablets, they don’t have to. No more making customers get out of their cars, walk to a desk and wait for a service advisor. Check-in can happen right at the customer’s vehicle. This creates a more personable experience — and means 7% more customers can be greeted immediately. Overall tablet usage increases Customer Satisfaction Index (CSI) scores by an average of 72 points.9
Beyond speeding the service process, tablets are an outstanding selling tool. Customers may be skeptical of a service advisor informing them a procedure is necessary, but they’re far more likely to trust technology when it tells them the same thing. And when customer trust rises, so does service retention. Dealerships using tablets during paid service appointments increase service retention by an average of 11%.10
While working tablets into a dealership’s process may require some adjustments, the added convenience and value far outweigh any difficulties. And those difficulties should be minimal. After all, everyone from baristas to taxi drivers already uses tablets on the job.
Drive service retention, not misinformation
Customer loyalty isn’t dead — it just requires an outstanding service experience. Customers agree and 54% said they are willing to pay more for their preferred experience.11 And dealers agree, too. Ninety-four percent of personnel report that a high-quality service experience is more important than the actual repair.12
But to deliver that experience, the myth of the disloyal customer isn’t the only one that needs to be debunked. Only dealers who reject the misinformation leading their service experience down the wrong path will be able to deliver exactly what their customers are looking for — and keep satisfied, loyal, repeat buyers coming back year after year.
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