In 2002, I was a new Ford Motor Company employee in manufacturing, and my sleep was limited. We had a newborn son who refused to sleep. Why was he crying? I had no way knowing, so I tried everything you can think of—rocking, singing, bottle, you name it . . . not the most efficient strategy.
Years later, I found myself in a similar situation at work. I was now on the retail side as an F&I manager. I usually only had five minutes to build rapport with customers, and again found myself wishing I had some way to know exactly what they needed right off the bat. If I knew the factors that impacted their choice, then I could speak directly to them and be more impactful. Instead, I followed a scripted sales pitch that covered every item available in the F&I office.
Eventually, I found my way back to the manufacturing side of the business, but I was still stuck on the idea that my company could be more successful if we had an easy way of understanding what is most important to our customers, and how they choose between us and our competition.
I knew we spent millions of dollars on market research at a national level, but I didn’t have that information. It was usually aggregate data about market share or customer satisfaction at the national level, not customers of my dealership. I wanted to know what actually drove customers to choose me versus my competition.
A recent case study by Vennli surveyed car dealership customers to determine what matters most in their service department experience. It found that only 54% of customers who purchase or lease a new vehicle return to the original dealership for service, but service customers represent a major revenue opportunity for the average dealership.
To attract new service customers, one Midwestern dealership planned to create a swanky waiting area and car wash. Vennli’s research of 516 car owners, however, showed that these accommodations were not major factors in customers’ choice to obtain service there.
In fact, the biggest drivers of customer choice were fairly similar for those who chose to go to a dealership or an independent service center. The most important factors were quality and explanation of service, trust in the recommendations, expertise with a particular make or model, speed of service, low price, and a comprehensive, one-stop shop for all service.
It was less important for service customers to have the car cleaned before it was returned or to have a great waiting area. In reality, customers were choosing independent service centers because they perceived them to be cheaper and more convenient. To increase its service revenue, this dealership needed to play to its strengths and improve on items that mattered most to the customer choice.
Customers wanted quick service and the option to drop off their car—they didn’t want to wait onsite, no matter how fancy the waiting area. And dealerships actually shouldn’t want people to wait—it’s been shown that customers who leave their car at the dealership for service spend three times more money than those that wait for it onsite.
Based on these findings, this dealership decided instead to focus on less-costly improvements that actually had a greater impact on revenue. It implemented a concierge service so customers could conveniently drop off and pick up their vehicles. They focused marketing communications on what attracted customers to them—the specialized and comprehensive service that the dealership provides. In total, the dealership saved more than $1 million on capital expenditures.
Think about this for a minute: In a traditional customer satisfaction survey, customers would have rated the new waiting area and car wash positively. Who wouldn’t?
But if the dealership only had that information, it would have spent a lot of money and then wondered why the new customers never came. A simple shift in direction and a focus on customers’ top needs was all it took to propel this service department’s profitability.
Mark Futa is an expert communicator with more than 17 years of experience in sales and marketing. He joined Vennli from Ford Motor Company, where he most recently worked to revitalize the Lincoln brand. Futa’s experience ranges as a manufacturer representative for foreign, domestic, luxury, and mass-market brands. Futa also brings retail automotive experience, including roles as general manager, finance and insurance manager, and e-commerce director.
Latest posts by Mark Futa
- Get (and Keep) Service Customers By Giving Them What Matters Most - March 22, 2016