Fixed Ops Journal - October 2019 - F11

WAR

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five reasons that consumers say they don't
take their vehicles to dealerships for service
have to do with price and trust. The other reason, No. 2 on the list, is that they aren't conveniently located.

Trust deficit
"Dealers first have to overcome the trust barrier and then [build] awareness that they're
cost competitive," says Cox Automotive Vice
President Jim Roche. The perception that dealership service departments are more expensive than other shops is "a myth," Roche says,
but adds: "You can tell them until you're blue
in the face, but you can't really make someone
aware of new information until they trust you."
The best way to ease customer anxiety over
service prices, Roche says, is for dealerships to
post them online as part of a "high-quality,
technology-enhanced experience" that consumers can easily achieve with a smartphone
or computer. That includes a comparison of
prices with those of local competitors, he adds.
"Everyone is focused on looking for a fair
and reasonable price," Roche told Fixed Ops
Journal. "If you can find a way to have that
price transparency, I think you win. I don't
think it's a race to the bottom to the lowest
price. I think it's the fairest price, and that's
wrapped up in the value perception."

All American Ford in Old Bridge, in the New
York suburb of Old Bridge Township, N.J.,
goes head to head with nearby competitors
with a "dare to compare" feature on its service
website that stacks its prices against those of
Pep Boys, Jiffy Lube, Firestone and the Mavis
Discount Tire chain for an oil change and tire
rotation, brake service, four-wheel alignment
and battery replacement.
The dealership matches or beats the others
on all services except for a $10 higher price for
an alignment compared with Jiffy Lube. The
web page notes that All American Ford uses
factory-trained technicians and provides free
loaner vehicles and car washes - services its
competitors don't offer.
"It's been eye-opening to be able to show the
customer that there isn't any price gouging,"
says service manager Pat Townsend. "When
people come in and we find that they need a
battery and they say, "Well, I can get it from this
place for x amount of dollars,' then my advisers
can say, 'But ours is cheaper.' And if they ever
need anything, they can bring it back to the
dealer where they get all their service done."
Roche notes that dealerships retain other
substantial advantages over many of their service competitors, starting with their knowledge
of how to fix complex vehicles. "It's going to be
harder and harder for the aftermarket to keep
up," he says, "especially because the aftermarket typically doesn't service just one brand."

Senior services

Screen test

Source: 2018 Service Industry Study, Cox Automotive

At the same time, Roche cautions that dealers shouldn't expect vehicle owners to turn
reflexively to a dealership for service, or even
pick up the phone if a dealership calls with a
service reminder. Consumers generally prefer
getting emails or text messages from dealerships that allow them to respond on their
timetable, he says.
That's especially true of younger consumers,
Roche adds, who expect an "Amazon-like" experience with vehicle service, from scheduling
an appointment to getting a price estimate,
tracking the progress of a maintenance or repair job, and having the ability to pay online.
Millennials and Generation Z consumers -
those born after 1976 - are becoming a bigger share of service customers, says Erica
Danford, vice president of managed services
for Dealer.com, which provides online content and social media services for dealers.
These customers want the same type of online
experience from dealerships that they get
elsewhere, she says.
"That's how they run their lives," Danford
says. "They're managing their day-to-day payments, communication, everything through
their mobile device. That makes it all the more
important that you have your website optimized for mobile, so that information is easily

Just 8% of cars and trucks that are more
than 5 years old are still covered by a
factory warranty. The owners of older
vehicles take them to dealerships for
service less than one-third of the time,
preferring independent and chain-store
providers. By contrast, dealerships attract
most of the service visits for vehicles that
are 5 years old or newer. Providers' share of
service visits for cars and trucks that were
bought from a new-vehicle dealership and
are older than 5 years:

Body shop

Other

Specialist

29%

Retail

Dealerships

13%

Quick lube

14%
Tire
store

27%

General repair/
service
station

accessible to them."
Dealers, often under pressure from automakers, historically have spent heavily to
make their physical storefronts modern and
attractive, Danford notes.
"It is equally if not more important that they
put that same level of attention and focus on
their digital storefront, because that is where
their customers are first coming in contact
with them," she says. "They're not driving
down the street looking for your dealership.
They're looking for it on their phones."
At Honda of Downtown Chicago, service
manager Joel Adames says more service customers are booking appointments online -
and increasingly through the dealership's
smartphone app. The percentage who make
appointments online has increased to 29 percent this year from 24 percent in 2018, he says.
"Clients want to talk less and less to people
because they're on the fly, on the go," Adames
says. "I can see it changing to where it's going
to all be online eventually."

Ford's agenda
Frederiek Toney, vice president of Ford Mosee WAR, Page 12

OCTOBER 2019

PAGE 11

http://www.Dealer.com

Fixed Ops Journal - October 2019

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