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AutoLoop at Digital Dealer 2018

Preparing Your Service Department for the Amazon Threat

Preparing Your Service Department for the Amazon Threat

The current automotive market presents today’s dealers with unique challenges—the biggest one being the evolution of the customer experience. As shown by the seasonally adjusted annual rate (SAAR), which gauges the strength of overall vehicle demand in any given month, the current automotive market is already declining and forecasted to decline even further. But the difference between the upcoming slowdown and the last recession is that customer expectations have changed dramatically. What does this mean for dealers? The Service Department is becoming an increasingly important part of keeping them in business. With companies like Amazon completely reshaping the customer experience, not only have they diminished the value of the in-store experience, they’ve started taking dealers’ customers.

We conducted a digital experience study and found that customers say Amazon is the best role model for dealers to follow—more so than Apple®, Nordstrom, or any other retailer with a physical experience. This puts dealerships in a tough position for not only maintaining, but growing, their business. Yet Amazon is pushing their way further into the automotive service arena and directing your customers to competing aftermarket partners, such as Pep Boys®. For example, consumers can easily purchase tires, batteries, and brakes directly from Amazon, and select a nearby aftermarket location for service.

In light of these challenges, driving profitability by shifting added focus to fixed ops makes sense. But how do dealers adjust for the increasing competition while also moving toward better service? It starts with an entirely new business model that focuses on digitizing every aspect of the service experience, as Amazon is already doing. And going digital in your shop provides a couple of immediate benefits. First, loyal service customers will generate much more long-term profit than one-off sales customers. Second, exceptional service experiences will help retain those crucial customers and ensure they purchase, re-purchase, and continue to service at your dealership.

Great Service: Kick it Off with a Fast, Intelligent Online Appointment Scheduler

Ever made a reservation at a restaurant where you had to make a dozen or more decisions just to confirm your spot? Probably not. However, that is exactly what dealers are asking customers to do when they call on the phone or schedule a service appointment online. Many dealers would be shocked to learn how many popular scheduling tools endorsed by OEMs are turning away half of their customers. The reason? When customers call or go to a dealer’s website to make an appointment online, what they find is a generally antiquated process that is far from customer-centric. The online appointment tools on dealer websites present a significant opportunity. In our studies, we found that most customers attempting to schedule online couldn’t even make it past the appointment-time selection, because the process was too complicated. We also found one online scheduling tool that required over 25 clicks for a customer to make an appointment on a dealer’s website. That’s a lot; most consumers can probably refurnish their entire home in 25 clicks on Amazon.

Dealers should move fast––and aggressively––to adopt an AI-driven online scheduling tool that not only enables customers to schedule service in a couple of clicks, but also provides some personalized intelligence to make identifying what’s needed for their next service easy. While factory-recommended maintenance menus help, dealers should also be using a tool that caters to many groups of customers at once. Whether the customer doesn’t follow their maintenance recommendations, they only want a maintenance service, or they’re not sure of what they need at all, your online scheduling tool should be able to accommodate them. And the best way to do so is through AI, to get customers to the right service—otherwise you’ll lose half of them by abandonment.

In addition to delivering accurate service recommendations with your online scheduling software, it’s also crucial to show pricing. While some dealers are afraid showing pricing will cause customers to deflect, our latest digital personalization study found the second most popular recommendation by customers to dealers was for the online appointment process to tell them the price. Again, think of dining out. Most of us need to know the costs up front, as they can significantly influence our decisions. And since today’s shoppers have a wealth of options for servicing their vehicles, if they don’t have some transparency with the price, they’ll likely go to the lube shop down the road, where they can easily see the rates.

Make the Most of Service Minutes—Yours and Your Customers’

Your customers are setting time aside to come to your shop for service. So, respect that time by making the most of it with a comprehensive, yet easy online scheduling tool. It will handle some of the hardest work for you, and help you optimize your shop’s availability for any given week. But when selecting the right one for your shop, remember that the most effective solutions are flexible enough to allow you to make changes in real time. And if you’re not able to manage your shop capacity down to the team, advisor, transportation type, skill group, or opcode, then it’s probably best to find a new solution. Today’s shops need a robust tool that gives you full control of all available appointment-booking opportunities. Why? If shops are able to define the intervals needed to complete each type of service, then maximizing service-lane efficiency throughout the day––from customer check-in to check out––becomes effortless.

Once you have your shop’s capacity set, your staff’s time will automatically be determined and allocated to those best suited for the job. So, next up is ensuring the rest of the appointment goes as quickly and effectively as possible. That’s where a digital multi-point inspection tool comes in. Paper forms are long outdated, and they do very little to streamline the service experience. Digital solutions, however, can be tailored specifically to your store and work to guide your staff through the process for consistent, accurate multi-point inspections. And with a simpler, smoother process, dealers can finally meet their goal of getting customers out the door as quickly as possible. Plus, these tools offer far more information for both your staff and the customer—ensuring they’re armed with the knowledge they need to make informed decisions about their vehicle health.

Capture More Service Potential from Current Customers

Digital MPI tools do more than just streamline the service experience. They also enable you to correctly identify and document additional services that can be upsold. We’ve seen dealers with just five service technicians drive $10,000 in additional parts and labor sales per month just by using software in place of paper. And even if you don’t upsell the services you recommended on the spot, you’ll still create a better connection with customers and drive their loyalty by bringing those recommendations to their attention. Since people usually don’t want to come back multiple times for items that could have been addressed in one visit, giving them the option to handle all their services at once is a win-win.

These solutions are also proficient in capturing declined repairs and saving them to reference the next time the customer is in. And since you’re already using a digital tool for the inspection, snapping a photo or video during the process is simple. Having this on file works to do three things: it ensures your store’s liability is covered with the proper repair documentation, it enhances customer understanding by showing them exactly what’s wrong with their vehicle, and it promotes customer trust that the services you’re recommending are both accurate and important.

Summary

In order to rise to evolving customer expectations set forth by online companies such as Amazon, dealerships should shift their primary focus from sales to fixed ops. But beyond that, dealers should also do their best to adopt easy-to-use online scheduling and multi-point inspection software that streamlines and simplifies the entire service process—for both staff and customers. Doing so will not only help ensure customers choose your store over brick-and-mortar dealerships, it’ll help you generate more long-term profit and sustain business growth.

 

Graham Annett

VP of Marketing

AutoLoop

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