Survey: Car Dealership Customers Willing to Pay More If All Goes Well

More than half of surveyed consumers say they would be willing to travel farther and pay more for an enhanced customer experience at an auto dealership’s service department.

That’s according to part two of Cox Automotive’s Service Industry Study. It surveyed about 3,550 consumers and 404 franchise dealership employees. The goal: to gain greater insight into consumer trends and perceptions and help dealerships identify new opportunities when repairing and maintaining vehicles.

The study says that while dealers lead their competitors in share of service visits, an estimated 70% of vehicle consumers who purchased or leased from a dealer did not return for service in the past year.

This equates to roughly $266 billion in annual lost revenue across all franchise dealers, based on revenue calculations from the study and National Automobile Dealers Assn. data.

To increase service business, dealers should adopt new offerings and technologies, such as online bill payments, minimal-click scheduling via mobile devices and ride-share or valet service, according to Cox.

“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,” says Jim Roche, vice president-marketing and managed services at Xtime, a Cox brand with a platform that allows dealership website visitors to book service appointments and expedite the process online.  

It’s particularly critical to retain Millennials, who are the fastest-growing generation of car buyers today “but also the most dissatisfied with the current experience,” he says.

Roche authored the book “Fast Lane: How to Accelerate Service Loyalty and Unlock its Profit-Making Potential” and the upcoming “Fast Break: Creating A Customer-Centric Operating Philosophy for Automotive Service.”

To retain customers and enhance service experiences, dealerships should “develop a better understanding of consumer needs and expectations,” he says.

A dealership service director agrees.

“So many people in our industry will find a reason to look at the customer and say, ‘My job isn’t to see it your way, but to get you to see it my way,’” says Steve Nicholson, director-operations at Temecula (CA) Hyundai. “But we need to look at everything through the eyes of the customer,”

Ultimately, consumers are motivated by a convenient and stress-free service experience, the study says. It cites five opportunities for dealers.

1.      Provide Ease of Maintenance: According to the study, many consumers want the dealer website to be their primary touchpoint for maintenance. About 67% want to be able to track service history on the dealer website, while 62% want recall updates and service reminders with links back to the website for online scheduling and other tools. 

2.      Offer Price Transparency: Seventy percent of consumers want to view price ranges for various services on the dealer website, while 55% say they would choose one dealership over another if it provided online estimates of costs during the scheduling process.

3.     Shift to Online: Fifty-six percent of surveyed consumers say they would choose one dealership over another if they could schedule appointments online. Despite this, scheduling remains primarily an offline activity. The study blames lingering low awareness for that.

4.      Close the Distance Gap: With location a top reason for not returning to the dealership of purchase for service, dealers should embrace mobility solutions to help overcome this hurdle, the study says. About 40% of consumers are interested in the likes of valet service and mobile service providers.

5.     Offer a Service Valuation Analysis: The survey says consumers increasingly want to know the ROI on their service spending. Two in five want to understand the relationship between services needed and vehicle value, while one in three are interested in getting a trade-in value during the service experience.

The complete report of Cox Automotive’s 2018 Service Industry Study Phase 2 is available here.  The first phase is here.