How the Increase in Service Competition from Mass Merchandisers Affects Service Loyalty at the Dealership
You CAN Compete with Mass Merchandisers
Quick, jiffy, 10-minute, rapid —these are common buzzwords in the US automotive oil change and lubrication industry, which was designed to give customers a faster, cheaper, and more convenient service experience.
And, according to industry research, the US automotive oil change and lubrication industry now includes around 5,000 companies with a combined annual revenue of about $5 billion.
These shops generally do oil changes and preventive maintenance, but some do provide repair services as well. Each shop does 1,200-1,500 jobs each month, and many of the services — adjusting tire pressure, changing windshield wipers, replacing light bulbs, topping off fluid levels — are completed in 10 minutes or less.
They are rising in popularity and are seemingly everywhere. There’s probably more than one in your neighborhood.
And guess what, they’re our (franchise auto-dealers) fault.
If we were doing everything right — taking care of customers after they purchased a car, offering them service and maintenance at a price that worked for them AND us, and delivering them real value for as long as they owned the car — then these mass merchandisers probably wouldn’t exist.
But all is not lost. Franchise auto dealers CAN compete with mass merchandisers. You CAN make money with a Complimentary Maintenance Program.
Why Mass Merchandisers Are Successful
When mass merchandisers started popping up in the late 1980s, they honed in on something many franchise auto dealers couldn’t — or wouldn’t — deliver at the time: a quick and easy service visit.
People were tired of waiting at auto dealerships, which at the time generally didn’t have the comfortable and accommodating waiting areas we provide today, and service just took too long. The mass merchandisers combated that with conveniently and strategically located shops that were designed to get customers in and out. And they did it cheaper, too.
That was (and still is) their value proposition: their experience is better, it’s quicker, and it’s easier to do. We only have ourselves to blame that they exist and that the customers flock to them for basic service work.
What Franchise Auto Dealers Can Do
It’s our job as an industry to change, and to make it convenient for the customer, cradle to grave, to not only buy their cars from us, but to also see the value of returning to service with us, time and time again. This is where an effective complimentary maintenance program comes in.
Complimentary maintenance provides a bridge between sales and service that gives customers a chance to experience the issuing dealership’s service department first hand. It’s during this courtship period that dealers need to take great care with every customer to turn them into ambassadors and earn future opportunities for more expensive repair work down the road.
Let’s face it, during the first 12–24 months of ownership there isn’t much service work that needs to be done other than oil changes and tire rotations. Regardless, the first two years of vehicle ownership is a crucial time because it provides a unique opportunity for building relationships that will greatly benefit the dealership and service department in the future. If you are successful in retaining customers until year three, these service loyal customers will begin returning for tires, brakes and more expensive repairs.
The Dealership Advantage
One thing franchise auto dealers will always have over the mass merchandisers is quality. Most mass merchandisers have lower-priced, entry-level technicians performing the work, while dealerships usually have master technicians on the job. Master technicians aren’t just “following the script” — they can identify and repair issues and deliver a much better experience to the customer.
You get what you pay for. If you’re spending tens of thousands of dollars on a vehicle, do you really want an entry-level technician servicing that vehicle, even if it is just an oil change?
Surely you’ve heard the horror stories from mass merchandisers — the wrong oil or filter was used, or they didn’t get a gasket right and the customer lost an engine. Of course the mass merchandisers have insurance to cover those things, but what about all of the grief that goes along with not having a car while you’re waiting for the repair? And if they can’t do the oil change right are you going to trust them to change your engine? Even if they do sublet out the engine job, who are they subletting the job to? Do you have a great comfort level with having that done?
Service loyalty is a difficult challenge that all dealerships are faced with. Being able to retain your customers can be the difference between success and failure. Are you ready to get on the road to retention, bridge the gap between sales and service, and give EVERY customer a reason to return to your dealership for service? Watch this video to find out how.