In our next installment in the Canadian auto dealer and Harris/Decima Research project, we asked Canadians if they are cutting back on spending to compensate for higher gas prices
The rising cost of gasoline is a popular topic of conversation these days — we all complain but surprisingly, only one third of Canadians say they are actually cutting back on some other products and activities in their lives to cover the extra cost.
We asked 816 adult Canadians who indicated that they own a light vehicle and have at least 50 per cent of the responsibility for running and maintenance costs, if they are cutting back to cover the rising cost of gas.
We are much more complacent it seems, than our American neighbours — fully 55 per cent of them said “yes” in a similar Harris Poll conducted in mid March of this year in the U.S. (The Canadian Harris/Decima poll was conducted in May of this year.)
Perhaps we are just more accustomed to paying more for gas and we have also been driving smaller vehicles with smaller engines for many years.
The other surprising thing is to see, among those who say they are cutting back, is where they are making changes. For dealers, there is some good news and bad news here.
Even though only 11 per cent indicated they have cut back “a lot” on auto repairs and maintenance, the total cutting back on this item overall is 40 per cent. That’s four out of ten customers!
This can have a big impact on the fixed operations side of your business — not just in frequency of repairs, but also in the tendency of many car owners to see dealerships as an expensive place to have their vehicle serviced or repaired.
You’ve likely experienced this in your business already. We may be seeing the beginning of a sea change in the way consumers behave when it comes to their cars and in the way they view their cars overall. We could see consumers hanging on to their vehicles even longer than before and paying less attention to recommended maintenance schedules. In future polls, we will look at more general attitudes towards vehicle ownership — especially among younger consumers.
For dealerships, the challenge will be to cement the relationship with the customer through the service department. If you’re going to see the customer less often, make it worthwhile and try to ensure that you get a bigger share of that shrinking service dollar. Not by selling service they don’t need, but by making sure the customer will come back to you for the next service.
The years of double digit growth and new customer acquisition are likely gone and now the focus should be squarely on making the most of the customer’s every visit to your dealership — for you and for them.
