To Regain Service Profits, Think About the Big Picture
More than ever, new car buyers are taking their long-term expectations into account when shopping for a car. That means service is an important consideration in the buying process. But if you’re like most dealerships, you’re missing out on this opportunity.
While service revenue at dealerships is on the decline, overall service market revenue is expected to grow significantly over the next few years. That’s because national chains and local repair shops have picked up the slack left by dealerships. And they’ve done so by providing the information consumers want, where they want it.
On the other hand, consumers still harbor several important misconceptions about dealership service departments. That’s because too many dealerships don’t promote their service departments online, leaving consumers unaware of the value they provide.
Meeting Consumer Expectations
Thanks to the internet, it’s easier than ever to investigate vehicle maintenance and repair options. Consumers turn to digital resources to find providers, check reviews and credentials, and seek special offers.
A big reason national chains and local repair shops are winning over consumers is that they’re marketing effectively on digital platforms while dealers tend to underutilize these venues. Among other things, this creates a lack of price transparency, leading most consumers to expect huge price ranges across different types of service providers and making them nervous that they’ll overpay for service.
Making your prices available both on your website and third-party sites allows you to put your pricing in context with your competitors. And that allows consumers to see that your prices are within an acceptable range of other service providers.
You Have the Advantage
It’s important to note that consumers don’t shop for service exclusively on price. Despite declining service profits, dealers actually have the initial advantage for providing service over their competitors.
For one, new car shoppers are thinking about service long before they’ll need it, making the service department a much more important influence on the buying decision than you might expect. According to a recent Harris poll commissioned by Cars.com, 64 percent of in-market car shoppers indicate that a service department’s reputation is a factor when choosing where to purchase a vehicle.
At a dealership, consumers feel they’re getting service from a technician that’s an expert on their particular make and model, and they’re willing to pay a little more for that expertise. That’s especially important for out-of-warranty vehicles. That trust factor isn’t as high when a car owner visits a national chain or local independent shop. But too many dealerships aren’t communicating their inherent value.
That’s why it’s crucial for dealers to take advantage of their reputation for quality. In the Harris poll, only 10% of in-market shoppers said they would not seek out service department reviews before purchasing a vehicle. Promoting your positive customer reviews, expert technicians and parts and labor warranties can help separate your dealership from local and national competitors, particularly for specialized repairs of off-warranty vehicles.
Get in Front of the Customer
For today’s car shopper, knowing how their vehicles will be serviced is part of the buying process. To reinforce their value in service and repair, dealerships need to get in front of customers when and where they’re shopping. Increasingly, that means online—both on your website and on third-party resources, which can help develop the credibility consumers need to feel confident about the value they’re receiving from your service department.
Because service customers are often repeat customers, maintaining these relationships is crucial for maximizing service department revenue. In the end, establishing a digital presence to increase the visibility and promote the value of your service department will help you retain current customers—and win new ones.
For more information, read: Trust and Price Transparency: The Keys to Rescuing Service Profits
Jack Simmons is the Dealer Training Manager forCars.com. A former dealer himself, Simmons has been on the forefront of helping dealerships attract the online car shopper, from online reputation management and optimizing new car inventory listings to winning with mobile. He is a frequent speaker at industry events, including NADA, NIADA, Digital Dealer, the DrivingSales Executive Summit (DSES), the J.D. Power Automotive Internet Roundtable and national BHPH conferences.