REDWOOD CITY, Calif. — Cox Automotive released the second phase of its 2018 Service Industry Study, a new report based on a survey of approximately 3,550 consumers and 404 franchise dealership employees. Directors said the study was initiated gain greater insight into consumer trends and perceptions around the service experience, and help dealerships identify new opportunities to increase retention and enhance profitability.
According to the results, while dealers may be leading their competitors in share of service visits, an estimated 70% of consumers who purchased or leased from a dealer did not return for service in the past year. This equates to roughly $266 billion in annual lost revenue across all franchise dealers.
The good news is more than half of consumers reported they would be willing to travel farther and pay more for an enhanced service experience, helping overcome the top two barriers to dealership service retention. This means dealerships that want to grow share in customer-pay service need to be adopting new offerings and technologies, such as online bill pay, minimal-click scheduling via mobile devices, and a ride-share or valet service.
“With consumer satisfaction and loyalty dropping across all service providers since 2015, now is the time for dealerships to take a closer look at the experience they are providing their customers and upgrade to adapt to changing expectations. This will be particularly critical to retain millennials, who are the fastest-growing generation of car buyers today, but also the most dissatisfied with the current experience,” said Jim Roche, vice president of marketing and managed services at Xtime, a Cox Automotive brand.
“Dealerships have a prime opportunity to increase customer satisfaction, and as a result, loyalty and retention,” Roche added. “Dealerships, though, need to develop a better understanding of consumer needs and expectations for the service experience. The insights from this study will help dealerships identify where the customer experience is currently falling short and what can be done to repair it.”
Highlights of the study include:
- 67% of customers want to be able to track service history on their dealer’s website.
- 62% want recall updates and service reminders with links back to the website for online scheduling and other tools.
- 70% want to view price ranges for various services on the dealer site
- 55% would choose one dealership for service over another if it provided online estimates of costs during the scheduling process.
“So many people in our industry will find a reason to look at the customer and say, ‘My job isn’t to see it your way but to get you to see it my way.’ But we need to look at everything through the eyes of the customer,” said Steve Nicholson, director of operations at Temecula (Calif.) Hyundai. “Other dealers want to try to make as much money as they can from every customer, but in parts and service we have the opposite philosophy of that. Rather than take a lot from a few, we want to gain a little from a lot. We want to see the customer more than once.”
To read the report in its entirety, click here.
Originally posted on Auto Dealer Today