Written by,
Tracy Noonan Fred
Vice President & General Manager
Fear is a funny thing. In humans, it generally evokes one of two well-known responses—fight or flight. In a split second, our instincts kick in and we decide whether to confront the source of fear or simply run away. In recent interactions with dealerships, I’ve sensed a lot of that same fear surrounding changing customer expectations. I’ve also learned that when things get scary, dealerships have the same choice as people—they can confront the fear or run away from it.
Changing Customer Expectations
Consumers have been groomed to expect on-demand experiences where they are in control. They want to pick and choose, in à la carte fashion, the goods and services they consume. In addition to quality and value, they now demand convenience, transparency, and trust. According to the 2018 Cox Automotive Service Industry Study, 20 percent of consumers list pressure to buy additional services on a service visit as their top frustration while another 10 percent list unclear pricing. As a result, customers are regularly declining service recommendations and want to be able to handle them on their own terms in the future.
A Tendency Toward Paralysis
Sadly, many dealerships are choosing not to confront these changes in consumer expectations and, as a result, find themselves frozen in fear. Their reasoning is understandable—they only know that they should change, but don’t exactly know what to change. With no one to guide them through this process, they worry that they’ll end up making the wrong changes. In their words, the devil they know is better than the devil they don’t know. They accept that the industry is changing around them, but decline to make adjustments to their own processes.
An Openness Toward Change
Of course, there are those that choose to fight instead of fleeing from changes in customer expectations. Those that fight understand that dealerships have always operated in an environment of change. They are open to change and view it as an opportunity rather than a threat. In addition to a more productive mindset, these dealerships often enjoy more useful partnerships with technology vendors that nudge them toward the future. Along with their partners, change-oriented dealerships are creating on-demand experiences in their service departments.
Putting Data at the Fingertips of Staff
One thing dealerships can do to meet changing customer demands is to put data at the fingertips of their staff members through the use of technology. Consider the following benefits of various dealership technologies that make information more accessible to both customers and staff:
- Using technology to track and promote past declined services helps dealerships recapture an average of $7,026 per month.*
- 55 percent of car owners are more likely to schedule service at a dealership that provides online cost estimates.
- The use of tablets in the write-up process has a significant positive impact on satisfaction and CSI.**
- In-lane write-up tablets also increase customer retention rates from 63.9 percent to 70.5 percent. ***
- 67 percent of service customers say they will definitely return when they receive text message updates, compared to 55 percent when updated by phone.
There’s no getting around it—customer expectations are changing to favor a more on-demand experience. Successful dealerships will view that change as an opportunity and will avoid being paralyzed by fear. By putting more information at the fingertips of dealership employees and customers, those dealerships will deliver the experience that today’s customers have come to expect.
*Based on Xtime dealers who have been enrolled with declined services since September 2017 and with Inspect go-live date before September 2017
**Analysis of survey data from J.D. Power and Associates, McGraw Hill Financial, 2016
***Xtime, based on 89 dealers using Engage and Go-Live date before 5/1/2015, 216,332 VINs and 463 Service Advisors. Vin based retention based on May-July 2015.
