Dealerships in the US have the reputation for being markedly more expensive than independent shops when it comes to maintenance and repair. Where did that perception originate?
Does a scheduled service at a dealership cost more than an independent shop? Do customers really get similar service for a lot less money at an independent, all-makes shop?
Fixed Ops departments have to work hard to overcome the pervasive attitude that their service and repair operations are just “too expensive,” at least when compared to independent or chain auto repair facilities.
Independent stores will claim they perform maintenance and service just as well as the dealership. Sure, there may not be a fancy waiting room with plasma TVs, iPads, or gourmet coffee, but the job gets done. Dealerships counter that their Fixed Ops departments are filled with staff that are trained exclusively on the specific automaker model range, have access to specialized tools, and use genuine OE parts.
What’s the big deal? Is there that much in service dollars even worth fighting over? Turns out, there is. Americans spend an average of $766.50 on vehicle maintenance annually. Not an astounding amount itself, but when you multiply this by the 62 million vehicles being driven annually, it suddenly becomes clear that vehicle maintenance is a mammoth industry that adds up to $47 billion dollars each year. To further illustrate the impact of service and repair operations within a dealership, Dealer Marketing magazine reports that Fixed Ops accounts for 60% of net profits in the average U.S. dealership. [June 2015]
Customers may choose the dealership for their initial service, but that number drops with each successive service or repair decision. To retain customers, dealership Fixed Ops departments must demonstrate their unique benefit of trained technicians using measurable processes and genuine OE parts.Dealerships that are successful in the Fixed Ops arena excel at communicating their strengths in 4 major areas:
- Dealership Service personnel know your vehicle: technicians are professionally trained on your specific vehicle platform systems.
- Dealership Service personnel know your warranty terms: Service Managers take the responsibility of identifying and updating recalled items affecting the warranty and provide repair or replacement for FREE.
- Genuine OE parts: parts made for your specific vehicle guarantee superior fit, finish, and performance.
- Specialized Diagnostic Tools and Processes: Dealerships have invested in diagnostic tools and VIN-precise systems such as service menus and electronic multi-point inspection systems (eMPI).
To succeed, dealerships must invest in tools that make the customer service experience transparent and consistent. VIN-driven service and repair technology gives customers the concrete evidence they need to approve service and repair. Furthermore, photo and video evidence provide the “show me” proof of repair that today’s customers demand.
A satisfactory visit to a dealership’s service department has powerful after-effects on customer retention. NADA states that 43% of a dealer’s loyal service customers will purchase their next vehicle from that dealer. [https://www.dodson-group.com/blog/capturing-customer-loyalty/]
To retain customers after the initial sale, dealerships must use their strengths to educate customers on all aspects of vehicle service: quality parts, trained technicians, and VIN-driven processes that are accurate, predictable, and measureable. There are 47 billion reasons to commit to it.
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