Dealers need to take a hard look in the mirror when it comes to fixed ops
A typical customer today will go one place to buy tires, to another for an oil change and maybe another for a mechanical repair. Not to mention they may go somewhere else to buy their next vehicle, without even getting a price from you. The question is why?
One customer at a focus group meeting probably summed it up the best when he stated this: “I have given up looking for great service, so if I am going to get screwed it might as well be for the least amount of money.” Think about yourself as a retail customer. How many places do you go to spend your money where the service is so good, you will drive an extra distance, wait a little longer and pay a few bucks more because the level of service is so good?
AIM FOR EXCELLENCE
What about your own service or sales department, do you have a sign outside saying: “We are no worse than anyone else!” What are you doing differently to earn your customers’ loyalty? Have you surveyed your own market area recently and established how much competition you actually have and what they are doing to stay in business? So maybe you just spent over a million dollars on imaging your dealership, and chances are you spent $980,000 on the showroom area. This makes no sense when at times you can make more gross profit on a brake job than selling a new vehicle. Do you think that a new imaged store will create more customer loyalty?
Over the last few years there has been an increase of independent leasing companies who make a comfortable living from customers who want a new or used vehicle but do not want the hassle of visiting your dealership. In fact some dealerships have set up independent leasing businesses and hide the fact that they also own a dealership. Are we really that bad? We often ask the question to our clients: “What do you have that the independents don’t that gives you an edge?” Below, you’ll find the types of answers we typically hear.
We have factory parts. The problem is of course that some are sourced from the same manufacturer and we often have to offer both the OEM and aftermarket parts because of pricing or risk losing the job.
We have factory-trained technicians. This could be a good selling point but in the U.S., surveys often point to the fact that ASE certification is more recognized than factory training. But here in Canada many qualified technicians working in dealerships don’t even take the factory sponsored apprenticeship programs!
We have special factory tools. You know the ones you have to pay for every year, that stay in the expensive boxes they came in and never get used! For as long as we remember OEM dealers have been saying that the change in technology will put the independents out of business. Since they still own close to 80 per cent of the business — it might be a long wait.
We have customer lounges. Sure, having a lounge with a big TV and free coffee is a nice touch and as a dealer once pointed out, “We have a better waiting facility than rapid lube shops.” True. But he missed the point that some rapid lube shops allow you to stay in your vehicle, read a free newspaper, drink a free coffee and you are back on the road in 20 minutes! We have never heard a customer yet say they take their vehicle to a particular shop because they like the waiting area or the free coffee.
We have menu pricing. Dealership menu pricing has come a long way in the last few years and with seasonal specials, dealers often have better pricing than the independents. But is that enough to make the customer yours? The perception still is that we are more expensive and a whole lot less convenient.
FIND AN EDGE YOU CAN USE
You can no longer rely on your franchise sign to generate the business. There was a time that the sign outside was a given right to give you credibility and a good market share of the service business. After all, we sold the vehicle so we deserved the customer’s business! We ran with around 10 days appointment lead time and like the airlines overbooked customers by 20 per cent, gave lousy service and still made money.
The Automotive Industries Association of Canada consumer survey study appears to show that 56 per cent of visits were for routine maintenance with tire changes coming in second at 13 per cent. If that accounts for 69 per cent of your customers, it should be your key area of focus.
Carl Sewell wrote a great book many years ago called “Customers for Life.” It wasn’t rocket science, but it was right on the money. Here are two of his tips, “Under promise and over deliver. And there is no point in saying no to a customer.”
Several years ago visiting dealerships in India they all seemed to have the same philosophy, total transparency with every transaction and treat your customers like Gods, because without them you can’t survive. The customer waiting areas had huge windows out into the shop, which brought my mind back to a new dealership where I live that put a window into the shop and then painted over it because the technicians did not like it. This brings up an interesting point, are we in business for the customer or ourselves?
We believe the main purpose of a business is to solve a customer’s problem, with the object of making money. Not the other way around!
