—Originally Published in Fixed Ops Magazine For Customer Experience —
In the auto industry every market is slightly different and I’m also a firm believer that a prescription without an examination is malpractice. So – when I’m speaking with a prospective client, I always ask what’s currently being done for service and service retention and how it’s working. When asked, it would boggle your mind to know how often we hear dealers say: “It’s ok”, “horrible” or even worse, “No clue.” How do you know if you should continue a service campaign if you don’t know if it’s working? A service director once said the following about a campaign he was running for service retention:
“It’s the worst service retention campaign….we’ve been consistently running it for the past 2 years, and it doesn’t work.”
We speak to hundreds of dealership decision-makers a month. The focus of a majority of these conversations is service retention. We all know how important customer retention is for any business, however it continues to be a serious challenge for many dealerships. It’s a big problem because of how closely the manufacturers watch your service retention number. Service can be the lifeblood of a dealership. The best, most reliable service customers are the ones who stop by every three months for an oil change. Truth is, service carries every month, because not only does it generate revenue, but it’s also the richest source of sales customers. But, that’s only possible when service retention is top-notch.
If you want better customer retention, start with creating a better customer experience. Bring the customers in, treat them well, do the job right, and charge a fair price. When done properly and with sincerity, they will return to you as well as refer you repeatedly to friends and family. Sounds easy, right? Well, there’s a problem…
THE SERVICE RETENTION PROBLEM
You are contending with other dealerships AND independent service centers. Price, more than ever before in recent memory, is a serious concern for customers. It’s tempting to try to compete with the little guys, but in a race-to-the-bottom, you can’t win. A tiny operation with generic supplies and one service will always be the ‘low-price leader’. Racing to the bottom results in cost-cutting shortcuts that can hurt the customer experience. A deep discount can only be a one-time teaser to woo a customer back. You cannot and should not play this game, (just ask Circuit City) even if you’re the rare company that can win it. The true sale must be made on the experience.
PRICE SHOULD ONLY BE A VARIABLE WHEN THERE ARE NO OTHER DIFFERENTIATING FACTORS
While you’re pushing hard to distinguish yourself from the Lightening Lube stores, stop and think like your own customer for a moment. Don’t make the same mistake that your customers make all the time, focusing entirely on price. If all marketing programs were created equal, price would be the only concern. They’re not. The true litmus test is the dollor-for-dollar ROI generated. A million-dollar price tag is a bargain, when the return is $20 million, just like $99/month is a ripoff when it fails to produce. A focus on cost, conceals value. Value is Benefit vs. Cost. Great quality service is cheap at twice the price. Keep that in mind, because at the end of the month nobody wants to say, “I know we didn’t hit our numbers, but we got a really great bargain on the marketing that failed us.”
My advice to dealers for their customers is the same thing I tell my dealerships as clients, and it’s boilerplate sales copy. “Build the value for your customers. Create a great customer experience. Be distinct and market yourself distinctly.” Then, sell your service drive on it’s own, with amenities, services, and skills that no neighborhood Lube-mart can touch.
Craft a great service customer experience and they’ll happily pay full price for the next oil change or service interval.
If they have never been in your dealership before, do something above and beyond. Something quick and easy like noticing that their headlights need restoration and take care of it for them at no charge. Let them know you handled it for them to keep them safe, and thank them for coming in. Things like this show that you care about the customers themselves, not just their pocketbooks. Get creative and empower all members of dealership staff to do whatever they can within reason to make customers feel comfortable and special. There are many ways to do this without spending money or losing profit.
Making them feel like a VIP is the best possible customer experience. With that customer experience, you are creating customers for life.
If a person has a truly winning experience, they will probably tell a few close friends. However, if they have a bad experience, or at least what they perceive as a bad experience, they will tell EVERYONE. Grocery checkout clerk, Walmart greeter, whoever. They’ll tell anyone who will listen. A client of mine once mistakenly told a customer (who left angry) that a repair would not be covered by the warranty. Despite making immediate attempts to call the customer back to apologize and correct the oversight, the customer went on a 24-hour dealership review-site marathon slamming his store. The impact was tremendous.
Negativity spreads like wildfire… and your money is flammable.
On a handful of occasions, while looking for a dealership’s website, I’ve found hate-sites ranked higher than the client’s own webpage.
One of the valuable bells & whistles of our retention product is a custom video landing page. On the page we flat-out ask where customers used to service before coming back to your dealership and why. We call this “Industry Espionage” I read every one of these reasons personally. Most of it is simple stuff. It may surprise you how a few easy changes can drastically improve the customer experience and the way they feel about you. Simple things can increase the frequency at which they visit you. Replenishing the hot coffee, free doughnuts, shuttle service, WIFI that actually works and accurate wait times can do wonders for you. Kid’s play rooms and cafe’s are great, but nothing can compete with the real basics:
Simple courtesy, competence, realistic completion times and accurate job estimates can directly impact a positive customer experience.
GETTING THEM IN
Before you can show a customer some love with a positive customer experience, you have to first get them to come in. So how do we get new people in or get lost/inactive customers to come back? Marketing. Good marketing would be better, and unique marketing would be best. As we all know, there’s a lot of competition out there. Many other companies are fighting for these very same customers. No mystery there. Constant mobile banners, pop up’s on the computer, radio spots (most of which are horribly annoying) television commercials (equally annoying), costumed people dressed as livestock or superheroes spinning signs on every corner, and we all have Direct Mail pieces in our mailboxes multiple times per week.
Most of these look exactly the same. There is usually very little difference between one dealership’s service coupons and another’s. Further, these are not much different than the after-market service center coupons either. With the exception of whoever put in the lowest price, they don’t give customers much of a buying preference. Price is only what you pay for something. The focus should be on the value you get, FOR that price. We have all paid more than we had previously anticipated for something because a buying preference was created based on value being built. Value needs to be added. Sending a message that doesn’t communicate the unique value the experience will just become a spending contest. Because when the message is the same, whoever puts the most pieces out there wins, whether print media, digital, or broadcast. The more unique, the more you stand out, the more objectively effective your efforts are, the less you have to spend for the same result. That’s value, not cost. I’ve seen 2000 pieces of unique direct mail outperform 10,000 pieces of run-of-the-mill stuff all day long.
Plus – and trust me on this – the customers who come in for value & experience are the customers you really want. If your marketing is only targeting the “lowest-price-shoppers” then you better make sure that you are ALWAYS the lowest price, or you will lose them as fast as you got them.
Running a campaign within any medium of advertising needs to be easy to track. Whether this is done through OP Codes or another method (and I highly suggest another method because OP codes are only as good as the person entering them in) you should always be able to tell at a glance if a campaign is bringing in customers. But more importantly, whom it is bringing in (ie: current customer, lost customer, no-history customer), number of visits, the total ROI to date for the campaign as well as an exact total upon completion. If it worked well, keep running it.
But the bottom line is this: if you can’t tell at a glance how well the campaign is producing – with hard numbers – find another.
With the programs we run, if a customer isn’t standing in your dealership with our marketing in one hand, and handing you cash with the other hand, we don’t claim them.
We don’t just preach this stuff, we practice it too. We have over 90% retention with our strictly automotive clients. Many of whom have recorded video testimonials for our website. When was the last time that your experience and results from a direct mail company prompted you make a video testimonial about them? No one wants to to jump in front of a camera, and they certainly wouldn’t do it and lie.
Now that’s real value – and in this industry – its priceless.