Pretend you’re the owner of a 2010 Ford Focus that recently went off warranty. Your check engine light just clicked on – most likely due to a battery issue – and you need to get it fixed ASAP. There’s seven inches of snow forecast for the weekend ahead and you can’t afford to risk an issue in the cold. Put your consumer hat on and think about where you’d turn for help and information given the circumstances.
Now take it one step further.
Pull out your smartphone or open a new tab in your mobile browser and search for “battery replacement,” “brake repair,” “oil change,” or any number of common services consumers look for online in your neighborhood every day.
See what comes up!?
You can bet that Firestone, Pep Boys, Midas and the like will be all over the results but YOUR dealership, if it’s like most, will be nowhere to be found.
Mailers, coupons, email blasts – that’s where most dealerships stop when it comes to marketing their service departments, and it’s a huge problem for our industry.
[highlight color=”#F0F0F0″ font=”black”]”National service chains and independent repair shops are eating our lunch and most of us aren’t doing a damn thing about.”[/highlight]
The biggest issue facing dealerships today isn’t inventory turn or overhead costs, it’s the perception of our service departments – the idea that car owners believe non-dealership service options are a better deal than what the average dealership can offer. National service chains and independent repair shops are eating our lunch and most of us aren’t doing a damn thing about.
Run The Numbers
Before we get into what your dealership can do to get its service department online, let’s dig into the numbers.
The first factor in all of this is that the average age of a vehicle in the U.S. is at an all-time high. Consumers are driving cars and trucks that are more than 11 years old, on average, and those vehicles frequently need maintenance.
Unfortunately, as vehicles age, the connection between car owners and dealerships fades. Franchise stores are estimated to lose between 60-78% of service revenue on vehicles that are between 3-6 years old. This jumps to as much as 92% once a car spends seven years on road.
While the service category as a whole is forecast to grow by 15% over the next year, as I travel around the country and ask dealers what they’re seeing, average year-over-year growth is typically a modest 4-5%.
Dealers I meet say, “C’mon Jack, our service absorption is at 90% – business is great!” But it’s not quite as good as it seems.
Most fail to see the avalanche coming, not realizing that national chains and independent shops are gaining two new customers for every one of their own.
The primary reason consumers opt to have their vehicles serviced outside of the dealership is a lack of transparency about price. As you might guess, shoppers think dealerships are more expensive than national chains and independent shops, and their dollars reflect that.
We know that’s not true, but we’re not doing anything to communicate that to potential customers online.
[highlight color=”#F0F0F0″ font=”black”]”vehicle owners are even willing to pay a premium for dealership service..“[/highlight]
The good news is that by simply showing customers the cost of service at the dealership is similar to other options, that mindset quickly shifts to be more favorable. The same thing happens when dealerships communicate information about technician certification, included warranties and manufacturer parts. In many cases, vehicle owners are even willing to pay a premium for dealership service, they just need to know about the quality they’re paying for.
So why aren’t we doing this?
Establishing a Digital Footprint
When I first started in the business, we had something called a “Dare to Compare” board hanging up in our service waiting area. It told our customers how much an oil change, tire rotation, etc. cost through us compared to the quick lube down the street. If someone was off-warranty or soon would be, it clearly showed them that our prices were just as competitive as others in the area, while the quality of our work was better than anybody in town.
The problem is that the chalkboard hanging up on our wall hasn’t moved in 30 years.
Unlike our sales departments, service never made the jump online, and we’re just now starting to feel the consequences of it.
Most dealerships dedicate less than 5% of the content on their website to service. The same holds true for other online marketing channels, including online reviews.
So when the 83% of consumers who report using online tools to research service and repair break down, dealerships are nowhere to be found.
Let that sink in.
We’ve got to resolve the disconnect between our digital marketing for sales and service, and upgrading our service departments’ online presence needs to be an immediate priority. Not next week, not next month – today.
3 Quick Things To Do Today
- Update information about your dealership’s service department on Cars.com (dealer profile page), Google+ Local, Yelp and other consumer sites used by shoppers in your area. Be transparent about the cost of common services by promoting them online.
- Evaluate your website. Check to see if you’re omitting important information about technician certification, OEM parts and service amenities.
- Translate CSI scores into online reviews. Two in three new-car shoppers say that service reviews are a factor when purchasing a vehicle, so make a plan to solicit and promote online reviews specially related to your dealership’s service department.
Want to learn more about the changing service landscape? Download our (Cars.com) recent white paper.