Automotive Aftermarket Service – Fixed Platform Overview
There are several issues today facing the franchised dealer service departments.
- Massive decline in service retention; 21% nationally and dropping
- Huge competition from national repair chains and independents
- Service intervals are now much further out with the introduction of better built vehicles, synthetic oil, etc.
- Lack of trust from consumers in general
- Perception is that the dealer is far more expensive than local repair chains
- Time factor just takes too long at the dealer
- Dealers are getting crushed digitally by national repair chains online
- Not enough service information on dealer’s website for the consumer to decide on whether to have service done at the dealership
Why are these issues and why are all manufacturers all over this?
- In 2015 65% of all new car buyers switched from the previous brand owned. There were 10% who were first time buyers and only 25% remained brand loyal. This 25% that remained brand loyal is very close to the national service retention number of 21%.
- In a CNW research study of GM owners on service loyalty and future sales, they found that consumers who frequently serviced with the selling dealer became repeat vehicle buyers 86% of the time. If the consumer never serviced with the selling dealer they became repeat buyers on 8% of the time.
- This is an overlooked opportunity in the auto industry. Increase focus on cultivating current customers rather than hunting for new ones; it can be expensive to conquest a new customer.