Customers come and go. Hopefully, they come back. If not, we’ll send them a coupon!

Does this sound like your customer retention program? It might. After all, when times are good it’s easy to let retention fall off the radar. Investing in programs designed to bring back existing customers just doesn’t seem very important when they’re likely going to come back anyway.

And if they don’t, well – there are plenty of car buyers out there to take their place.

The trouble is that today’s environment is no longer so sunny. Granted, annual sales forecasts are still at healthy levels despite recent declines; a 16.73 million SAAR is a far cry from the days of the Great Recession. But sales volume is not the only factor. The current market condition is unique and volatile; as sales have slowed, credit has tightened, and the average cost of a new car has stayed pretty much the same. Meanwhile, variable expenses are up, in some cases significantly. Floor plan interest rates, the cost of hiring and employee retention, as well as marketing and advertising expenditures…smart dealership managers are already actively looking to cut costs and hang on to current profit margins for as long as possible.

The bottom line? The cost of doing business just got more expensive.

Time to Think About Customer Retention

Which brings us to the need for customer loyalty. An effective customer retention program will help lower the cost of acquiring new business, increase CSI scores and boost overall profitability. Indeed, as reported in the Harvard Business Review, most studies have found that acquiring new buyers is from five to 25 times more expensive than retaining existing customers. According to global consulting firm Bain & Co., increasing customer retention by just 5 percent boosts profits by 25 to 95 percent.

It’s just hard to beat a happy customer who comes back for repeat business and tells all their friends.
Best of all, it doesn’t take a million-dollar marketing “points” program to build and nurture a strong base of loyal customers (though that may help!). You just need a service drive that’s open to change and willing to work in a customer-centric manner. In fact, put these three simple tips into action and see how effective your service drive can be at improving customer retention:

#1. Connect Sales and Service with a Simple Introduction

During the sales or F&I conversation, walk the customer over to the service department. Introduce them to a service manager or advisor, and briefly talk about the strengths of your department. That may seem a bit obvious, but it doesn’t happen nearly enough: recent studies found that most new and used car buyers were not introduced to the service department, even though it’s a clear difference-maker.

Remember, consumers generally look at dealership service departments as the primary source of expertise when it comes to vehicle maintenance. Linking sales to service, with a simple introduction and/or a technology connection, is a good way to introduce a dealership strength into the experience.

#2. Sweat the Small Stuff

Make sure communication is tight. That includes dialogue between advisor/customer and advisor/technician. Make sure you’re leveraging the customers preferred feedback channel, and that promise times are transparent and carefully communicated. Indeed, how you communicate is almost more important than what you communicate.

As such, finding the customer’s preferred channel is paramount. For example, studies as far back as 2014 show that texting improves customer “show” rates and that properly staffed and scripted service BDCs can have a significant impact on appointment-setting – not to mention the reduction of ghost customers. For example, according to Connect Mogul, 90% of all text messages are read in under 3 minutes. That’s a powerful example of how the right communication channel can deliver results. Remember, we live in an on-demand world of customer service expectations; our ability to communicate properly helps to control what that means to customers.

#3. Measure Twice, then Optimize

Virtually everything in the service department should be transparent to managers, and trackable as a performance indicator. Whether that’s car washes, promise time success metrics, or more, service managers should have the capability to gauge the effectiveness and efficiency of the shop’s workflow by identifying key metrics unique to the business. When results are tracked and socialized, the culture of the team will change toward a more precise reflection of critical needs and retention opportunities.

Ultimately, dealerships that make the service department a centerpiece of their retention efforts, and do so consistently, are bound to create a strong first impression that’s reinforced over time, service and repair appointments. Leave it to the service department – the bastion of margin preservation during tough times – to be the place you can turn to improve retention and increase profitability.

How Can Dealer-FX Help?

At Dealer-FX, our mission is to help automotive brands and dealerships transform the customer experience by providing leading-edge technology solutions that create an exceptional and efficient service experience. How can we help you?

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On August 2, Apple became the first U.S. company to reach a $1 trillion market valuation. In doing so, it crossed an interesting threshold once thought unattainable, at least for anything other than a global energy company.

But then again – was anyone really surprised?

Probably not. Apple is unique, after all, a public showcase of thinking differently. From iMacs to iPods and iPhones, the company has been on a journey defined by creativity and driven by innovation.

Here-are-a-Few-Customer-Experience-Lessons-from-Apple-Trillion Dollar Journey Dealer-FX

Apple is simply different.

But so is Amazon. And it’s no coincidence that Jeff Bezos’ company is in close pursuit of that trillion-dollar line. Their own valuation sits at around $424 billion. What’s interesting is that the two companies share similar customer experience keys instrumental to their remarkable achievements. Indeed, what’s most relevant about Apple’s $1 trillion valuation – and Amazon’s pursuit – are the things we can learn from their shared traits:

Culture starts with shared values

The memo sent by CEO Tim Cook after Apple reached the $1 trillion mark is a good example of a positive culture. You can read it here. The takeaway for service managers is how Apple and Amazon executives have aligned the company’s objectives with human values and hopes. This is critical because the digital transformation taking place in the automotive retail industry requires a culture shift inside the dealership. Technology only works if the team members see its value and are dedicated to making the change.

Technology that redefines the customer experience

For Apple, it’s been about design and the creation of devices that feel natural. For Amazon, it’s using data to anticipate behavior and supply the answer. Both companies blend amazing technology with an incredible human experience. This ideal has obvious application in the service drive: using technology to power human interaction is how relationships are made. It’s a vital component within the dealership sales and service cycle.

Create a need

No one told Apple that people would go crazy over the iPod. They noticed how the customer experience of the typical MP3 player was poor and designed an elegant user interface. Amazon didn’t wait for someone to tell them to create Alexa or apply Big Data to the shopping experience. With that in mind, how can service advisors use information and technology to introduce a need, and sell the ‘why’ to customers? It’s a good way to expand RO values and develop a stronger relationship with customers.

Creating a personalized experience

Your iPhone is personal to you. It doesn’t have to be a different colour (though that’s nice!) because the content is what makes it unique. Likewise, the personalization of the shopping experience is where Amazon gets its power. Innovations like recommendations, one-click ordering, anticipatory shipping, and price optimization make the experience unique – and uniquely valued. Creating a similar dealership service experience requires the timely application of knowledge about the customer’s needs. It also requires the building of a culture that seeks to make the experience more personal.

Someday, other companies will reach a $1 trillion valuation, and Apple won’t be alone. Yet what’s fascinating is that Apple’s success was accomplished in much the same way as it would be at the local dealership: through shared values, the application of leading technology and personalization for the customer.

How Can Dealer-FX Help?

At Dealer-FX, our mission is to help automotive brands and dealerships transform the customer experience by providing leading-edge technology solutions that create an exceptional and efficient service experience. How can we help you?

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What’s the fastest way to get a “no” from the customer? Ask them to buy a service they don’t understand.

It seems like a pretty simple mistake to avoid, right?
Yet often, service advisors fall into the trap, mostly because they’re busy or not armed with the latest vehicle information. And when it happens, they lose the opportunity to show customers the value and quality of the dealership service experience.

Service Advisors Tell the What Sell the Why - Dealer-FX

Common Assumptions

What’s not so simple is how to demonstrate the value of quality service. In fact, there are a few common misperceptions that service advisors and managers have when it comes to how well customers understand their vehicle’s maintenance needs:

  1. They won’t spend money on service.
  2. They get the work done somewhere else.
  3. They understand the value of the service.
  4. They already know what they want.

Most of the time, these assumptions aren’t true – and they lead advisors into a classic mistake by asking yes or no questions. Here’s an example: “do you want to flush the brake fluid?” Clearly, the easy answer is no. When that happens, many service advisors will shrug their shoulders, check the box, and move on. But here’s the problem: with every rejection, the service department loses sales and an opportunity to create a bond of trust with the customer. In fact, this situation does the customer a disservice.

Be Successful at Selling the Why

Don’t walk into an easy no – educate your customers by telling the what and selling the why. Instead of asking the customer if they want a service item they know nothing about, explain why they need the service and what makes it valuable. In this way, the conversation about a brake fluid change goes something like this:

Your car is overdue for a brake fluid flush. This is important because brake fluid absorbs moisture, and excessive moisture can cause steam. Because brakes work in a high heat and friction environment, that can lead to brake fade, which increases stopping distance. It can also cause the caliper piston to freeze, so the brakes won’t work properly. On average, brake fluid accumulates moisture at the rate of 1% per year, and anything over 2% (two years) is considered too high. Would you like to add this service?

When customers understand the importance and value of the service, they’re far more likely to opt-in because it saves them time and creates peace of mind.

How to Sell the Why

To better “sell the why,” start by preparing your service advisors with talk tracks and relevant knowledge. In turn, they will use that knowledge to educate customers and build trust. Your service department should strive for a consistent “why” performance from all advisors, a goal that’s achievable when your appointment and check-in technology includes detailed information and reminders about key service items.

Ultimately, advisors are most valuable when they do exactly that – advise customers. This way, they guide and provide customers with the necessary information to make wise decisions about their vehicle. By keeping the “why” in mind, they can better educate customers and build a reputation as a trusted advisor – something customers should expect when they come to a dealership for service.

By Ridge McCoy

Ridge McCoy is a regional performance manager for Dealer-FX. With 20 years experience in the automotive space as a technician, service advisor and shop manager, Ridge has participated in over 1,800 hours of sales, leadership and customer service training. He holds an Automotive Management degree from AMI, a business degree from Northwest University and has served as mechanical chair of the Automotive Service Association in King County, Washington.

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How Can Dealer-FX Help?

At Dealer-FX, our mission is to help automotive brands and dealerships transform the customer experience by providing leading-edge technology solutions that create an exceptional and efficient service experience. How can we help you?

Click here to learn more about Dealer-FX. 


Thriving in the Emerging Customer Service Economy

Make no mistake: It’s all about the customer experience.
As such, to thrive in today’s automotive retail economy service managers and leaders need to think differently about how they use data and platforms when interacting with customers – and what that interaction looks like. And while it’s easy to point to the likes of Amazon as an example, keep in mind that servicing cars is quite different than selling books. It’s filled with unexpected vehicle issues, limited parts availability, software updates, customer no-shows, absent technicians and more. Every day presents a new set of challenges.

Creating a Best-Ever Service Experience for Today. and Tomorrow

So here’s the question: How do dealers deliver a customer experience similar to that of Amazon? Yet make it scalable to the complex service ecosystem? It starts by thinking differently about how they use data before, during, and after each customer interaction.

Two-Step Approach

Dealers who want to achieve this must take a two-step approach:

First, adopt a service department technology platform designed to deliver an integrated and thoughtful customer experience, across all customer touchpoints. It’s something that can only happen if the data collected is analyzed and then made available at these six critical moments of greatest service opportunity:

  • Customer connection
  • Scheduling appointments
  • Vehicle check-in
  • Vehicle inspection
  • Customer engagement
  • Customer check-out

Creating a Best-Ever Service Experience

Part One: Creating a Best-Ever Service Experience for Today…and Tomorrow
Part Two: Creating a Best-Ever Service Experience for Today…and Tomorrow

Every point in these six critical moments brings with it an opportunity to increase revenue, boost CSI, and improve retention – but only if the data is timely, easy to use, and relevant.

Keep in mind that available data points include vehicle history, service codes, diagnostic information, and GPS data. Just knowing history, service and diagnostic data can help to significantly personalize the customer experience, maximizing the chance the customer will be happy and will return.

Next, work to transform the department culture so everyone focuses on “over delivering” service needs — to ensure a great customer experience. This is a profound change for a business whose fundamental practices and processes have remained stagnant over the past few decades. In addition to adopting a set of new technology-enabled processes and using data to constantly measure each one, employees need to embrace a culture of being in business to serve their customers. This includes:

  • Relentless optimization of the experience, through data analysis and the establishment of customer-centric performance indicators. For example, tracking greeting time, wait time, improving walk-arounds, and ensuring the wash and top-off of finished cars. These micro-moments make a lasting customer impression.
  • Providing comprehensive training to every new employee. And then refreshing and retraining them consistently.
  • Benchmarking service department processes and CSI results, then driving toward specific areas of improvement.

The Connected Customer

Technology is only effective when the culture of the service drive promotes its use as an organic part of the daily routine. It’s not an either-or type of thing: without the right approach, the power of technology to simplify and streamline is impeded; without the right technology, a team intent on over-delivering customer satisfaction will become frustrated and leave for more sophisticated stores.

According to a recent study by Price Waterhouse Cooper, “an average of 48% of U.S. consumers point to friendly, welcoming service as uniquely defining success in an industry; fewer (32%) pointed to having the most up-to-date technology.” In addition, the study found that 55% of U.S. consumers “strongly disagreed” with the idea that human interaction would not be needed when technology improves.

The message? Humans + Tech = Better Service. And that creates loyalty. In the automotive space, when you put the two together the results are compelling across the six critical moments.


As the automotive industry simultaneously faces headwinds and change driven by connectivity and mobility, service department efficiency and profitability will take center stage as the most important part of a successful dealership.

To win business and increase retention, service managers must begin to think differently about how to create those perfect moments. And while it’s true that we can debate the impact of technology, one fact remains. Today’s consumer is already connected – and they expect you to be, as well.

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Part One: Creating a Best-Ever Service Experience for Today…and Tomorrow
Part Two: Creating a Best-Ever Service Experience for Today…and Tomorrow
It’s Not What You Say, But How You Say It…and When

A Disruptive Transformation, and a Golden Opportunity

Automotive retailers and service professionals face a disruptive transformation. Indeed, while the business of selling and servicing cars seems to be moving at the pace of “business as usual,” around the bend lies one of the most challenging times since the 2009 recession. Consider: Today’s balky, downshifting market, combined with rising interest rates and the rise of multiple customer options, has created a stew of margin pressure. Not to mention increased customer expectations.

Dealer-fx: Creating a Best-Ever Service Department Experience for Today’s Customers

Fixed Ops to the Rescue…Or Not

A key profit anchor for dealerships when times are tough, service departments have historically risen to the occasion. Will this time be different? Maybe. Today, the service drive is also under pressure from several transformative disruptors:

  • Millennial influencers are forcing a technology-based culture change. They’re demanding a convenient, transparent and personalized service experience.
  • The ongoing technician shortage presents challenges to maintaining shop operations and growing the capacity to meet demand.
  • Improved vehicle reliability and longer service intervals make repairs less common and service visits less frequent. It’s a fact compounded by the adoption of electric vehicles and the ever-present competitive pressure from independent shops.
  • Dealers seek ways to expand service department capacity without making sizeable brick & mortar investments.

These demands are forcing the adoption of technology solutions across service departments. Digital workflows and service platforms are creating process efficiencies that scale, while also speeding transactions and connecting to customers. The result is an environment of high-risk for dealers: get your technology right or suffer the consequences of lower customer satisfaction and retention in the bedrock of your business.

Disruptive Technology Gains Velocity

This disruption to traditional practices is quickly gaining velocity. Consider how Uber, Lyft and others disrupt the transportation business and create more consumer options. Note how this idea of personalized mobility has evolved into ride-sharing services and subscription-based vehicle leasing platforms. Information sharing between cars, customers and companies is also on the move.

Telematics has already enriched the diagnostic and information-capturing capabilities of new vehicles, including creating data profiles of the vehicle and customer. In fact, research from McKinsey estimates that connected cars may account for 22 percent of all vehicles on the road by 2020. Indeed, as the industry moves toward 2020, these developments will accelerate as big data, AI and machine learning are infused into platforms and processes.

Ever-Rising Customer Expectations

Telematic and autonomous technologies are already changing new vehicle development, sales, and service. Yet there are still 250 million passenger vehicles on the road in need of service and repair – most of which do not have any of this new technology.

So, what does it take to win the hearts and minds of today’s consumers? The answer is reflected in consumer behavior: they are moving away from simply purchasing products and towards carefully designed, recurring customer experiences, enabled by intelligent applications served on mobile technology.

Amazon is busy creating a personalized, intuitive, and frictionless experience that retrains consumers to expect transparency and data throughput.

In fact, there are more than a few companies that have demonstrated this trend toward the intelligent use of data and preferences applied to mobile applications in stellar ways. One need only look to Amazon to see how the core of this idea can disrupt industries and win the hearts of consumers.

Not only do they know each customer’s relevant measurements, demographics, preferences, and payment info, they anticipate each need and gently make suggestions at the appropriate time. Through the careful use of many types of data, they are able to think differently about the customer interaction. As a result they provide a compelling, ongoing experience with a personalized touch.

The result is an experience that’s noticeably different and better than those of competitors because it makes the process of continually buying a product or service incredibly easy and habit-forming.

Next Week: Part Two: How to Thrive in the Emerging Economy

Porsche Introduces Its ‘Live Look’ Technician Platform

Porsche just introduced the long-awaited Google Glass concept to automotive technicians, bringing a media darling technology to dealership service shops. Can this transform the technician experience or is it just more cool technology looking for an application?

Named Tech Live Look,  it features projection technology and high-quality, lightweight smart glasses. A technician would use the glasses to connect to Atlanta-based experts for in-the-moment assistance. Those experts would be able to literally show instructions, images or the like through the glasses. It’s a tech solution that promises to speed up work and improve customer satisfaction. Click here to learn more.

How Transparency and “Right-time” Expectations are Impacting Dealership Service Departments

It’s a need-to-know world. And people need to know when – right down to the minute. Driven in part by busy, complicated lives, consumers are flocking to on-demand services: according to Boston Retail Partners and the National Retail Federation, over half of global retailers currently offer same-day delivery, a number expected to climb to 65% in 2019.

And then there’s Amazon. The online retailer not only promises fast delivery, it uses data to map when customers are likely to reorder items…then ship those products to a nearby distribution center before the order is placed. It creates a predictive delivery experience, boosting sales and satisfaction.

The Transparency Solution to Meet Right Now Demands

When every extra day, hour and minute counts, showing up late is a recipe for a disastrous service experience, one that consumers are increasingly willing to share via online reviews, ratings, and low CSI scores. Yet sometimes “right now” isn’t possible – and trying to meet such an impossible standard is just as disastrous. In that case, leading companies are turning to transparency to satisfy the customer’s need for immediate satisfaction, turning “right now” into “right time.” By showing the ongoing, real-time progress of an order, businesses such as Amazon and Uber empower buyers with the knowledge necessary to adjust expectations.

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The year 2020 is coming. Are you ready for a technology-enabled world of service, with new customer expectations?

In the car business? Put your seatbelt on.

And while you’re at it hang on tight to the steering wheel, because the road between today’s reality and the likely future is sure to be a wild and bumpy ride. The typical dealer-driven and controlled process of 2018, with few options and an established profit path, is already evolving into a customer-driven buyer’s journey.


That’s the type with multiple options, considerable margin pressure, and a heavy emphasis on right-time service levels. It’s not a temporary disruption: The depth and permanence of this change is led by mobile technology, and that has traditional retail operations staggering. In fact, according to Kerrigan Advisors’ year-end Blue Sky Report, it’s driving some generational dealer operators to rethink future plans.

Everybody Take a Deep Breath

At about this point I can hear you thinking: “Yeah, yeah. the more things change the more they stay the same.” It’s true that core fundamentals of retail ops are healthy and established. For example, people will always buy, lease, and service cars from dealerships. The majority will always test drive cars first, and will prefer a dealership service drive to the cluttered and dirty aftermarket option. The process is where change is happening.

And if you doubt that, consider how the popularity of technology-driven options enabled Uber, Lyft and their global peers to create a new transportation channel. Note how ride-sharing services and subscription-based vehicle programs – programs that are now spreading like wildfire to mainstream automakers – are opening the door for expansive and customized options.

Combined with the increasingly sophisticated science of Big Data and connected cars, the automotive landscape in 2020 looks like a data-driven, customer-first enterprise that relies on technology to help humans deliver right-time and comprehensive service.

The Future is Bright

It sure sounds marvelous. Except for one tiny exception: the need to service cars for a profit. You remember profit, right? That thing you had plenty of before interest rates went up, and sales slowed? The reason your service drive exists? If you’re selling new cars for pennies of profit, you’re doing it because it opens the door to more profitable areas of the business. And there’s no better place than the service drive. When times are uncertain, service departments have historically risen to the occasion.

This time might be different. Today, the service drive is also under pressure to Millennial influencers, a persistent technician shortage, and lengthening service intervals. These demands (and others) are forcing the adoption of technology solutions across service departments. The message is clear: get your technology right or suffer low CSI in an area that has always served as an important connector between sales and retention. The year 2020 is right around the corner, and the need for a simple, connected and efficient technology solution for the service department grows larger in the rearview mirror with every passing day.