Let's Address The Elephant In The Room...Service Retention

Franchise Dealers have the opportunity to earn hundreds of thousands in financial compensation from their OEM, assuming the dealer's service retention is at specific OEM guides. Unfortunately, a very high percentage of dealers are unable to take advantage of the financial windfall.

Let's put this in perspective. A tier 1 OEM has been offering PPM-Pre Paid Maintenance with every vehicle sold, it's inclusive in the MSRP. The metrics are as follows.

50% of the customers never show up for their first complimentary LOF
50% of the customers take advantage of their first complimentary LOF
30% of the customers take advantage of the second complimentary LOF
20% of the customers take advantage of the last complimentary service

The pattern is obvious, and also speaks volumes to the industry. It's very apparent that the industry has failed consumers in the area of general maintenance and service. It's also apparent that the industry hasn't sufficiently addressed the customer experience.

The customer experience isn't about price. How many times do you hear "I'm booked two weeks out." You're booked two weeks out due to offering $29.95 LOF. That won't help your fixed operations, nor will help service retention. The majority of these customers will be one and done, and purchase very little in the way of ASRs.

The customer experience is about.


Some of you will inquire about "People & Process", while I agree they're important, until the industry changes it's culture and addresses turnover rates of 40-70% contingent upon department, you better rely upon Trust, Transparency and Convenience. A convenience model that speaks to the customer experience will go a long way in combating excessive turnover.

The customer experience is all about convenience. The franchise dealer must make the customer's service visit convenient. Remember, consumer perception is that auto repair is time consuming, inconvenient and candidly...a pain in the neck. Consumers are going to take the path of least resistance when it comes to auto repair, which is why the vast majority end up at independent repair shops.

Do yourself a big favor, a favor that will reward you with high service retention rates, as well as financial reward from your OEM...start offering your customers Pick-up & Delivery Service. This doesn't include your service shuttle(s). Consumers expect and even demand that dealers bring a loaner vehicle to the consumer's home/office, swap out the loaner for the customer's vehicle and return it to the dealership. This same process is repeated upon the vehicle repair being completed. Your customer never has to leave their home or office to have their vehicle serviced. Dealers that don't offer Pick-up & Delivery Service can't compete with those dealers that do.

Pick-up & Delivery Service must be managed with software that's dedicated specifically to this task. RedCap provides OEMs and dealers the unique opportunity to provide Service Customer Pick-up & Delivery, with the ability to schedule, dispatch, track, monitor, utilize RedCap drivers or your own, and provide supporting analytics. This is a very turnkey uber=like system to manage the process.

Let's meet at NADA and discuss the many benefits of Pick-up & Delivery Service.

Ken Hite is Senior Vice President at RedCap. RedCap's technology and drivers are utilized by OEMs and dealers for Service Customer Pick-up and Delivery, as well as Consumer Test Drives conducted at the consumer's home. Ken has 25 years experience within the automotive industry, inclusive of retail, OEM, after-market and start-ups. The auto industry must learn to exceed customer expectations and implement business processes based upon customer convenience.

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