Customer Convenience Improves Loyalty to Dealer Service Departments

How loyal are your customers when it comes to returning their vehicles to you for service? If you’re like most other dealers, the answer is probably: “Not very.” In fact, a new study by Cox Automotive has found that about 70 percent of consumers who purchased or leased from a dealer did not return to that dealer for service in the past year. This equates to roughly $266 billion in annual lost revenue across all franchise dealers. Ouch.

The statistic comes from the second phase of Cox’s 2018 Service Industry Study, which surveyed approximately 3,550 consumers and 404 franchise dealership employees to measure consumer trends and perceptions around the service experience. It’s also a good tool to help dealerships identify new opportunities to increase customer retention and profitability.

It’s not that customers are cheap (well…not all of them). The research found that more than half of customers interviewed said they would be willing to travel farther and pay more for an enhanced service experience, helping overcome the top two barriers to dealership service retention. What qualifies as “enhanced service experience?” According to the research, this means dealerships should be offering customers newer services and technologies, such as online bill payment, minimal-click scheduling via mobile devices and ride-share or valet services for while their cars are in service.

“With consumer satisfaction and loyalty dropping across all service providers since 2015, now is the time for dealerships to take a closer look at the experience they are providing their customers and upgrade to adapt to changing expectations,” said Jim Roche, VP of marketing and managed services at Xtime, a Cox Automotive brand that drives owner loyalty through its one Service Experience Platform. “This will be particularly critical to retain millennials, who are the fastest-growing generation of car buyers today, but also the most dissatisfied with the current experience.”

Ultimately, customers today want features that are easy: scheduling via mobile app or web site; the ability to track progress on that app; pricing transparency; ride-share or valet services; and a clear idea of the return on investment of their service dollars.