A recent Vennli survey takes a look at what consumers like, sort of like and don't like about dealership service departments. The data visualization and customer analytics firm also provided some solutions dealers can use to increase revenue.
The Vennli Survey and Its Findings
According to Vennli, for every $1 of service revenue, a dealership adds an estimated $1 of profit to its bottom line between service and parts. Yet the findings of their survey reveal just how elusive service retention is.
Here's is what the company found:
- Service Retention is Low
Nationwide, only 54% of customers who buy or lease a new vehicle return to the original dealership for regular maintenance. Overall, 36% of surveyed car owners head to a dealership for service, while only 22% do so for oil changes. But, a whopping 91% of those who do get oil changes at the dealer also get service done there.
- Factors that Drive Customer Choice
Want to know the factors that aren't important to car owners when they are deciding where to service their vehicle? Having the ability to schedule appointments online, personally knowing the mechanic, a great waiting area, and having the car cleaned before it is returned. These findings were surprising because they represent common improvements dealers often turn to when trying to grow their service department. Meanwhile, the most important drivers of customer choice were found to be: quality and explanation of service, expertise with make and model, speed, low price, and comprehensive one-stop service.
- Perhaps Customers Don't Know What They Are Missing
You probably noticed that the factors that most influenced customer decisions on where to go for maintenance almost perfectly aligned with what dealer service departments can offer over their competition. So, why is service retention lagging? According to the survey, it's partially because car owners perceive independent service centers to be cheaper, and those that go to them for maintenance also believe it is more convenient and think they are getting better service. Yet those surveyed who go to dealers for maintenance perceived them to have higher quality service and to be just as convenient.
Three Solutions From Vennli
Since service customers represent such a major revenue opportunity, increasing service retention could pay huge dividends. Based on the survey's insights, Vennli suggests that your store could adopt these strategies to bolster service profits:
- 1. "Redirect focus from less important items to the core drivers of customer choice."
The survey found (to nobody's surprise) that customers want the service to be quick, the option to drop off their car, and they don't want to wait while it is being serviced. In fact, Vennli found that customers who drop their car off spend three times more on service than those who wait for it to be completed on site. This is likely because customers who are forced to wait will turn down additional recommendations because they want to get out of there as soon as possible. Based off of the survey's findings, perhaps your store can forget about wait room improvements and a rigorous car cleaning procedure and instead focus on speed and convenience (example: a pick up/drop off service).
- 2. "Focus marketing on the specialized and comprehensive service the dealership can provide."
The survey found that customers value the specific expertise dealerships can offer, the certification of mechanics, and the use of parts by a specific manufacturer. Using the most important drivers of customer choice on where to go for service, your store can tailor its marketing efforts to make sure these points are driven home.
- 3. "Consider marketing campaign strategies to bring customers in for oil changes."
Remember, 91% of car owners surveyed who get their oil changed at a dealership also use the dealer for service. If you advertise similar (or lower) oil change prices compared to your competitors, perhaps this will neutralize any perceived advantage in the minds of consumers.
Another Profit Source
The findings of the Vennli survey uncover the true revenue potential of dealership service departments and meeting the needs of consumers. Another way that your store can maximize its profit potential is teaming up with Auto Credit Express.
Our premier special finance leads, unparalleled business development center, and profit-driving LotPro® software can help your store make more money. To learn more about us and the products we offer, give us a call at 888-535-2277 or fill out our contact form online.