One in three Americans would avoid owning car if they could.
That’s one of the startling findings in the first annual Mobility Study, a report on changing automotive consumer preferences. The study, conducted by the automotive consulting firm Vision Mobility, also found that people in large cities were more likely to have ambivalent feelings about owning a car.
There are many reasons why car ownership engenders mixed feelings, but I would argue that one of the main drivers of this phenomenon is the hassle of vehicle maintenance. Let’s face it: For most people, taking the car to the mechanic ranks right up there with getting a root canal.
As a mature marketplace, why does the automotive service industry face such a poor reputation? To answer this question, we must examine the place where most car owners begin servicing their vehicles: the dealership.
Why dealer service departments get a bad rap
New vehicles under warranty are most likely to return to the dealer for routine service and repairs. This is a great opportunity for dealers to provide an excellent customer experience and create loyalty. But according to a study by DMEAutomotive, only 45 percent of customers remain loyal to their dealership’s service department within the first two years of vehicle ownership.
Only 45 percent of customers remain loyal to their dealership’s service department within the first two years of vehicle ownership.
The service relationship often starts off strong, but as time goes on and warranties expire, customer loyalty declines. A Consumer Reports survey, for instance, found that independent repair shops outscored dealership service departments for satisfaction, price quality, courteousness of staff and on-schedule work completion.
Where have dealerships gone wrong? Ultimately, the issue is trust. When servicing their vehicles, many consumers don’t think the dealer will put their needs first.
Building trust through customer-centric service
Dealerships will struggle to retain customers until they reorient around the customer experience. For those dealerships committed to turning things around, here are four strategies to earn customer trust, build their reputation and drive loyalty over time.
1. Provide different service and price levels
Several luxury car brands have done an excellent job of implementing flexible price points, offering tiered service levels and associated pricing. For example, “express” service might be offered without an appointment, but with the understanding that loaner cars are not available and the customer must wait on site. On the other extreme, “concierge” service might offer to pick up and drop off your vehicle at your home or business. The promise of convenience at a higher price will appeal to more affluent or busier customers.
For dealers, the key is to understand the needs of their target market, which may be fragmented. Companies should engage with car owners directly to learn what consumers want and why they want it. Deep customer insight will help dealerships optimize their service levels and pricing.
2. Improve communication
Just like any relationship, unclear communication is a factor in the dealership-consumer dynamic. Customers should be given enough information about what their cars need, why those services are required and how prices are determined. If a problem is discovered during service, the service advisor should immediately notify the customer to avoid surprises in the bill. It should also be clear to customers when their car will be ready, and they should receive timely updates if this changes.
Dealers should communicate with customers using their preferred channel, such as phone, text or email. Service advisors should be equipped with tools to engage with customers on their terms.
Without understanding the customer’s perspective, dealer communication will remain unclear. Dealers need to uncover the preferences of their customers and use that feedback to improve communication and enhance trust.
3. Reward the right behavior
While certain misperceptions about dealerships can be solved by clear communication, sometimes the core issue is a pushy and dishonest upsell culture. For example, I’ve been told my car needs a cabin air filter replacement when in fact, it was recently replaced elsewhere. Does this sound familiar?
When service departments are motivated by short-term revenue, companies unwittingly damage long-term customer relationships. Rather than rewarding employees based on average repair order value or total sales, dealers should consider a loyalty-driven approach—for example, by rewarding employees whose customers return for subsequent visits.
4. Give customers a voice
Rebuilding trust and catering to diverse needs begins with listening to customers. Dealerships will often send out customer satisfaction (CSAT) surveys to customers after servicing their vehicle. While this is a good start in giving customers a voice, CSAT surveys are often used to provide financial incentives for positive scores. This can lead to overzealous employees pressuring customers into giving a favorable review, leaving the customer uncomfortable and the dealership with inaccurate data that’s not actionable.
Dealerships should provide customers with a platform to honestly provide feedback about their experience in order to make improvements in the future, not simply reward employees for earning a high customer satisfaction score.
Customer engagement is key to fixing the car service experience
The dealership service industry has gained a reputation for putting short-term profit first at the expense of the customer. These underlying trust issues, however, can be resolved by listening to customers, making them feel heard and responding to their needs.
New technology offers the necessary tools to make this possible in a scalable and cost effective way. The key is fostering ongoing, authentic dialogue with customers. Companies that truly understand their customers are uniquely positioned to overcome mistrust, offer superior customer experience and create a sustainable competitive advantage.
To learn more about enabling authentic customer engagement, download The Authenticity Handbook.