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Aftersales Not After ThoughtBack

AftersalesBelow, we are going to discuss what customers want and why they leave us, how we can prevent defection if they do, what the landscape looks like, how we get them back, how we can differentiate ourselves and how the NFDA aftersales standards can help to do this.

This research is based on the Impetus report commissioned by the SMMT and NFDA, the DME Automotive Aftersales Report based in the US and also on a report commissioned by NFDA and Trusted Dealers.

So what do customers really want?

Predictably takes the number one spot – the most important thing mentioned by 64% of people was that customers want a fair cost or price. Other things that they are looking for included:

  • A high level of customer service
  • A 12 month guarantee, something that franchised dealers are definitely able to offer
  • Friendly and approachable staff – 47% of people think this is really important
  • A service book being stamped – 35% of people felt this was of high importance and when we asked them how much they thought it was worth 25% of people thought a fully stamped, main dealer service history was worth £500 in the transaction. Interestingly, another 25% of people thought it was worth £1,000 or more, so over half of people think it is worth at least £500 to have a fully stamped manufacturer service history stamped by a main dealer.
  • The assurance of using OEM parts, manufacturer parts was rated as important by 31% of people and factory trained technicians came in at 28% of people.

So if that’s what our customers want, how loyal are they to us? The interesting thing from the Impetus research which looked at the difference between franchised dealers and non franchised dealers and included independents and high street chains, was that actually customer satisfaction levels were broadly similar between franchised dealers and non franchised dealers.

On the upside for us was the provision of courtesy cars, where we came out on top, cleanliness of the car itself, the ease of getting in contact and also the lead time.

However the areas where the independent sector won, or non franchised dealers won, is in terms of overall costs and in delivering information on cost as the work is undertaken.

Broadly speaking people are as happy with their franchised dealer as they are with their non franchised dealer and that loyalty extends to how they look at pricing. 60% of people won’t price check the dealer next time, they will go to the dealer or the non franchised dealer who they went to the previous time and assume that they won’t be ripped off, so loyalty is quite strong. However, 38% of people will compare prices.

If loyalty is quite strong, why do they leave us? Well, people who do leave and use non franchised facilities believe that we will always be more expensive, so 66% of non franchised users believe we are always going to be more expensive and those who defected normally had a negative experience.

We will talk about what that experience could be shortly, but once they have had that negative experience they view the non franchised dealer as more convenient, they have a good relationship with them, that they are fair priced, flexible, and that they take care of them and their car. They see them as honest and quite often this is a sign that they have been talking to the person who is actually doing the work which reinforces the idea that the mechanic is someone who actually does something, a technician being someone who plugs stuff in.

So what causes customers to defect?

Number one is poor customer service where they believe that what we said we’d do isn’t what we did, whether that’s things not being ready on time or things being done without being authorised, or generally a bad customer experience, that’s the single biggest reason for them defecting.

Next is the price of the service versus the value of the car, particularly once it is out of warranty, it seems just out of kilter, so if you are driving round in a £2,000 car, a service of £500 seems an awful lot of money.

The third area is orphan cars, so cars that are sold out of area and no links made back to the franchised dealer network.

However, the first point of defection, the time that a customer is most likely to be disloyal to us, is actually around getting their tyres replaced where some research in the States suggests that 66% of people will defect from getting their tyres done at a main dealer within the first two years. This increases to nearly 80% and over 90% by the time a vehicle is 7 years old. You can see from this research that other things, whether it is battery replacement, oil changes, or servicing, can also become less appealing as a vehicle gets older, and this is really important when we think about the fact that we are chasing an increasingly old vehicle parc and so are our competitors.

So if we know that these are the things that cause defection, what do we do?

First of all in terms of customer relationship management we need to make sure that we have a plan for older vehicle servicing, so if a customer rings in then we know what we are going to say in terms of what we are prepared to do in terms of budget servicing, this isn’t new, but it is important that this is in place.

Secondly, service plans. Once someone is in to paying monthly for a service plan then they are a lot less likely to default, in terms of getting that service done in the future. The other area that we are looking at is putting pricing servicing alongside a used car so that a customer can see they are buying into the dealership experience both in terms of value cars and value of servicing.

If we know the customers leave because we make mistakes, we need to focus on CSI, so things like what customer satisfaction follow up is being done, and where there are problems, what action is taken to make sure those problems aren’t repeated. What are we doing to get testimonials from happy customers, because most of them are, and making sure those are both generated and published and available on line, and also what is our plan for someone who is unhappy. Do we just chalk up on the relationship, or do we work out how we are going to offer and incentivise to get them back into our business.

And finally, referring back to the first point of defection, what can we do about tyres? Well, we know in many cases we can get a deal as good as Kwik Fit in terms of supply so we can offer to match the price in many cases, but what else should we do? Let’s make sure when we do the handover there are tyre vouchers there, maybe give them a tyre gauge so that when they are looking at getting a tyre replaced because the tread is worn they can measure it using our tyre gauge and then there’s our phone number on it to help them to do it.

Make sure your tyres are online, if you have an email system for doing reminders to people for things like service reminders, why not incorporate more regular tyre reminder emails about checking them, making sure the tread depth is right and that they check the pressure and so on, so that it is us prompting them to check. This advice can be given at least quarterly to a consumer as we all know how important tyres are to vehicle safety.

On your website you can be thinking about tyre content and advice and if you’ve got a CRM centre or a business development centre, why not make that your tyre hotline so that instead of it going to a perhaps disinterested parts counter, or a receptionist who has loads of other things to do with their time, there’s someone whose specific job is to make sure that your tyre business is absolutely rock solid and that these customers don’t defect for the tyres, for once they’ve gone for one thing, it’s much harder to keep them for the rest.

If they do defect, then they inevitably will end up either online or asking a friend or family member who they recommend. If they end up online, the example below shows how congested the marketplace is with lots and lots of competitors advertising on page search as well as dealers showing up themselves sometimes in an actual search.

It takes people about 8 days to decide who to purchase from, according to Google. A lot of people make the decision in less than a week, but it is not something that’s made on a whim, people want to make sure they are not going to be ripped off, they want to be sure where they are getting information from, so as the graph below shows, whilst some people respond to old fashioned media, newspapers and direct mail, a lot more are likely to respond to service centre websites or search engines, but the biggest influences are the service adviser, so the person they spoke to last time, how good were they? Then, they’ll turn to friends or family for advice as to who to use in more than any other single recommendation. This can of course be a physical transaction or it can be something that they do on line in terms of social proofing.

So once they are ready to make the call, when do they look, when do they do the search? Research by Google indicates that 43% of service and parts customers search out of dealership hours, so we do need to think what we are doing to keep that business when actually at the time they are looking we are shut. As they are looking, over 80% of service and parts customers say that social media have an impact on their decisions and 33% of people share their experience on a website or social media platform, so this comes back to again Google research which shows how important it is that we are able to deliver in terms of social proofing.

In this very competitive landscape, how do we get the customer back? There is no doubt in my mind that prevention is better than cure, however as an industry the potential conquests that have been identified and where we as NFDA / Trusted Dealers are concentrating in generating profitable leads, and promoting the benefits of buying from a trusted, franchise dealer are within the category of 35 – 44 year old, male and females, equal split, whose car is around 5 – 6 years old. This is more likely to be a volume brand than a prestige brand, but these are people who think it is worth paying a bit more to get a better experience.

So how are we going to communicate with them? We have to be visible, we have to engage with them, we have to demonstrate some form of reputation and some form of ease of use. There is no point in having a website that makes it difficult for customers to look. Here the NFDA and Trusted Dealers have been working together with franchised dealers for some time on how we can differentiate ourselves, so we have created the 10 point of difference in aftersales, standards to underpin them, a booking and pricing mechanism to go live early next year and then PR and our own promotion to support it.

In essence what we are doing for the industry, you can do for your dealers group as well, by including public relations, online marketing, email marketing, content and participating in Trusted Dealers. In terms of reputation, we know what customers are looking for and those that don’t use franchised dealers at the moment want the reassurance of manufacturer parts, they want a courtesy car, they want a service stamp in a service book, they want the car washed, vacuumed, delivered back to them nicely, and they want to know that the latest diagnostic equipment has been used.

Those that want to be conquered are there to be conquered and so we have created the 10 points of difference on aftersales to do that and alongside it we will feature video reviews and content to back it up. These should include your own reviews on your website and other websites as well. Over 80% of people looking for service and parts said that social media has an impact on their decisions and 33% of them share their experiences. Your reputation is there to be managed, so manage it.

Finally, a thought about the things I would do tomorrow.

Firstly, I would get my retention stats from new car service, used car service and service to service and see by age where the gaps were, where the opportunities were, and whether it matched with what we described above, 35 – 44 year olds with 5 – 6 year old cars? If it did then I know what I am starting to address.

Next I would mystery shop my dealerships, ringing them on older car service to see how it is handled and what the proposition is. Do we instantly give away everything or do we have a plan that says for an older vehicle there is a discount applied and this is the price Mr Customer, when can we see you?

Thirdly, I would check how I measure customer satisfaction in aftersales and how I generate reviews. If we know that people are looking for social proofing, we need to make sure the reviews are there for them to be able to do it and we know that what’s measured is managed and what’s managed normally improves. Are we going to have the manufacturers survey? How as a dealer are we going to measure our customer satisfaction in aftersales.

I’d then put together, based on the information for retention, the confidence that my dealerships were now ready to offer a plan to somebody who called on an older vehicle service, the confidence that I knew where my customer satisfaction was, what I was doing to address it and that those reviews were out there. I would then put together a marketing plan which would include the NFDA Trusted Dealers aftersales platform, as well as my own online advertising, email marketing, and so on.

Finally, I would order some tyre gauges.

Every single customer that we can stop defecting from buying tyres is a customer we can sell everything else to.

In conclusion, aftersales is the battleground from which some say the burning fire of financial viability for the franchised dealer is to be fought. I say it is a battleground we can win, but not by accident, by carefully addressing issues around pricing, customer care and defection.

 

 

 

 

 

 

Posted by Leana Kell on 06/01/2014