Learn how one innovative dealer in NYC significantly changed the Service Customer's Experience.
On November 14 Alan Haig and Kevin Nill, partners at The Haig Group, enlightened our DealersEdge Members with an excellent recap of the “state of auto retailing” in 2019-2020.
The entire program focused on:
Current trends in Auto Retailing
Current Buy-Sell Conditions
Threats to the Franchise by Automotive Retail Disrupters
It was a hour packed with fascinating data and analysis. Perhaps the most interesting was Alan’s and Kevin’s take on the Disruptive forces at work in auto retailing.
Disrupters in most discussions these days will include: Electric Vehicles, Autonomous Vehicles and the growth of Ride-Share services. All three have the potential to impact your business in future years. However. there are more immediate threats to deal with. There are clear and present threats that require your attention.
Alan focused a section of his presentation on these three Current Threats to the Franchise:
Changing and Evolving Expectations from the Customer Experience
The degree with which OEMs are talking control of new car sales via incentives, stair-steps, etc.
The growing difficulty in hiring qualified and motivated people to staff your organization.
One Dealer's Contribution to the Service Customer Experience Question:
Customers often avoid dealership service departments. They will offer a number of justifications for abandoning the dealership after the warranty expires, but generally it comes down to the Customer Experience. In their judgement dealership services is:
Inconvenient – the customer must make an appointment and then bring their vehicle to the dealership. For busy people; not the easiest thing to arranged. Waiting while their vehicle is being serviced is often unpleasant and eats up too much time; never mind the terrible coffee and loud TV in the lounge.
Indifference- Number 1 complaint on CSI surveys centers on lack of communication regarding the progress of the repair. Nobody cares.
Too Costly – Whether this is true or not is debatable. We believe that this complaint is impacted by the other two negative perceptions.
Brian Benstock, the dealer at Paragon Honda and Acura, is an automotive innovator. He recognized a few structural issues with his service process that were preventing him from making improvements to the Customer Experience.
Primary Issue: In an urban dealership location, with space limitations, it was difficult to get customers to visit the dealership’s service department. The heavily populated New York City location is a challenge for the customer. To get the vehicle into service involved heavy; often slow traffic, parking problems and transportation problems if the vehicle needed to be left.
Paragon’s Solution:
Brian Benstock contracted with a firm to supply the pickup and delivery services. They will also deliver a loaner car if one is required. Customers make their appointment online, receive messages about when and where the vehicle will be picked up. At drop off, the customer receives a text to let them know their vehicle has been returned.
Estimated costs are about $40 per repair visit.
Here are some results:
The heat maps demonstrate how the service has been embraced by Paragon customers over the first year. Green dots depict the locations of customer taking advantage of this convenience.
More Benefits from this Customer-Focused Approach:
No Show Appointments: Almost reduced to Zero. In the past customers making service appointments would frequently find that the busy life of NYC would cause them to miss the appointment resulting in inefficiencies in shop and staff utilization.
Average RO Increases 25%: One reason is that the customer is less likely to be sitting in the service lounge wondering how quickly they can get back to their daily tasks. Additional recommended services will often be declined simply because they do not want the wait to be longer. If they are not waiting, but at home or working, they are more likely to accept the recommended services.
Customer Retention improves 32%: At Paragon it is now very convenient to have their vehicle serviced; producing happy customers with a convenient and pleasant experience… and they do not have to go near the dealership to receive those benefits.
Out Time for Service Loaners is reduced by 36%: Managing service loaners always has been a headache. Once the customer is in the loaner, their focus on getting back to the dealership to pick up their own ride is diminished. This results in more loaner expense than necessary. With this system, a driver brings back their vehicle and returns the loaner on schedule.
97% of the Service Customers are Extremely Happy: Helps to explain the improvements in Customer Retention.
For your own Service Department… place a value on each of those outcomes and then add it up. Does it make sense to spend $40 per repair order on pickup and delivery, if you get payback of this magnitude?
There was lots of other actionable information in this workshop… far too much to detail here.
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