Boost Fixed Ops Profitability and Efficiency with Insights and Transparency

The automotive service industry is undergoing rapid changes, with evolving consumer expectations and technological advancements reshaping the landscape. The 2024 Cox Automotive Vehicle Service Industry Study offers an in-depth analysis of these transformations, providing actionable strategies to help service departments thrive in this dynamic environment. By introducing key findings from this study to your service lane, you can gain valuable insights into the latest trends, challenges, and opportunities in fixed ops.

Understanding the Current Landscape

The 2024 Cox Automotive Vehicle Service Industry Study delves into the impact of supply constraints, inflation, and economic fluctuations on fixed operations. With over 2,493 vehicle owners and 525 franchise dealers surveyed, this study presents a comprehensive view of the industry. One key finding is the projected growth of the auto care industry, expected to surpass $400 billion by 2025. This growth is driven by factors such as increased vehicle mileage, longer vehicle retention, and the rising popularity of electric vehicles (EVs).

Key Insights from the Study

The study highlights several critical insights that can help service departments improve their performance and customer satisfaction, including:

1. Increasing Revenue Per Service Visit

Between 2019 and 2023, the average revenue per service visit for dealers increased by 30%. This growth is attributed to more comprehensive service visits that often include maintenance, repairs, and enhancements, particularly for older vehicles. By focusing on offering a range of services, dealerships can capitalize on this trend and boost their revenue.

2. Addressing Customer Frustrations

Despite accounting for 30% of all service visits, many dealership customers experience frustrations with their service. The top pain points include longer service times, pressure to purchase additional services, difficulty in scheduling appointments, unexpected costs, and long wait times for available appointments. Addressing these issues is crucial for maintaining customer trust and loyalty.

3. Building Customer Trust

A significant finding from the study is the decline in customer trust towards dealerships. The percentage of customers who selected "I trust this dealer" as a top reason for servicing their vehicle where they purchased it dropped from 62% in 2021 to 54% in 2023. To rebuild trust, dealerships should focus on cost transparency, providing a positive service experience, and emphasizing quality.

Actionable Strategies for Growth

The study provides three key strategies for dealer service departments to enhance their performance and customer satisfaction:

1. Create Cost Transparency

Showcasing competitive pricing for local service providers can enhance transparency and build customer trust. Providing clear and upfront pricing information helps customers feel confident in their service choices.

2. Provide a Good Experience

A positive customer experience is paramount. The study indicates that 8 out of 10 customers are more likely to return to their dealer for service after a positive vehicle purchase experience. Similarly, 9 out of 10 believe a good service experience increases their likelihood of returning for another vehicle purchase.

3. Emphasize Quality

Customers expect high-quality service at dealerships. By focusing on quality repairs, hiring skilled technicians, and using high-quality parts, service departments can differentiate themselves from competitors and foster customer loyalty.

The Role of Digital Tools

Digital tools play a crucial role in enhancing customer experiences and building trust. The study found that 73% of dealers now offer online scheduling, which is highly valued by consumers. Additionally, providing multimedia tools, such as videos and photos of vehicle wear parts, can improve customer understanding and trust, especially among Gen Z and millennial customers.

Conclusion

The 2024 Xtime Vehicle Service Industry Study offers valuable insights and strategies to help service departments navigate the evolving automotive landscape. By focusing on transparency, quality, and positive customer experiences, dealerships can build trust, improve satisfaction, and drive growth. To learn more and access the full breadth of insights and recommendations, download the comprehensive eBook.

To learn more, download the 2023 Cox Automotive Vehicle Service Industry Study eBook to enhance your service department's performance and customer satisfaction.