Four Misconceptions about Service Department Customer Loyalty
The dealership loyalty landscape is changing by the day. As boomers age, millennials are driving industry behavior, yet most service departments refuse to adapt. If you sit idly by, you’ll miss out on profit opportunities. And because customer loyalty is an ever-changing trend, service departments need to keep ahead of it. So, here are some common misconceptions about customer loyalty and the service lane.
Service Departments Overestimate New Car Buyer Loyalty…And Miss Out on Profit
When someone buys a new car, everything is hunky-dory because the car is under warranty. The service lane/customer relationship is strong for a few years…and then one day the customer doesn’t return. According to a study by DME Automotive, only 45% of customers stay loyal to a dealership’s service department within their car’s first two years of service. Beyond those two years, service department loyalty drops. DME Automotive estimates that dealerships miss out on 3 out of 4 customers, which is around 42% of industry dollars.
Service Departments Don’t Recognize Their Real Competition
It’s believed that independent shops are service departments’ biggest threats. However, this is an outdated idea. DME Automotive determined that aftermarket chains and servicessteal the bulk of industry profit.
Service Departments Don’t Understand Their Customer Base or Needs
Why do customers switch to aftermarket chains? It’s not necessarily about price. The truth is they do a better job catering to the average vehicle owner and millennials. In this regard, there’s two things service departments get wrong about the majority of vehicle owners:
Vehicles are lasting longer and people are owning them longer. More research by DME Automotive revealed that as a vehicle ages, fewer customers come to service departments for the top five key services: oil changes, brake services, tire rotation & balance, battery, and tire replacement. Aftermarket chains market these services more efficiently.
Dealership loyalists are aging. DME Automotive found that the average age of a “dealership loyalist” was between 65-74. This means millennials are shifting vehicle maintenance behavioral patterns – and service departments need to catch up.
Despite this, service departments have many opportunities to regain their lost customer base.
Focus on the Customer Experience
Perfect your check-in process. When a customer comes in, ensure they feel welcome. The write-up should be efficient but not rushed. Service advisors must take time to explain any recommended maintenance services and address customer needs. Furthermore, they need the ability to connect with the customer, which means having the right systems and tools in place. People stay loyal to things they feel connected to.
Don’t Forget to Advertise Key Services
Leverage marketing resources to showcase your service department’s abilities to perform basic maintenance on older cars as well as newer ones. This builds customer loyalty and caters to the bulk of car owners. So, when a customer experiences a serious vehicle issue, they’ll come to you.
eAdvisor has been helping service departments increase profit and keep customers for years. Combining efficient tools with a better understanding of what customers want will help increase retention and overall profit. If you’d like to learn more about how eAdvisor can help, please don’t hesitate to contact us.