March 2, 2020

Your service department is critical to retention and winning repeat sales. In fact, NADA’s annual Dealer Financial Profile research, shows that the service department now comprises 49% of a dealership’s gross profits.

Futhermore, a customer’s loyalty increases with vehicle owners who are satisfied with their service experience.  In terms of winning future business, research by Cox Automotive supports that good servicing leads to future vehicle purchase, with 74% of car buyers who had their car serviced by the dealership of purchase were likely to return there for their next vehicle purchase.

Given the long-term benefits and revenue retention through good servicing, here are 4 research-backed ways you can consider to improve your service department:

#1: Educate your customers on service(s) they will need early on, prior to their first service.

Why? Because 20% of customers are frustrated when dealers try to sell them additional maintenance and repair services during a service visit. Additionally, customers who were shown the service department during their purchasing visit were 1.5 times more likely to return to the dealership for service in the next 12 months (Cox Automotive 2018 Service Industry Study).

#2: Optimize service shop performance by balancing capacity to reduce customer wait times.

Consumers who are most satisfied spend 2.5 hours or less at the dealer for service (Cox Automotive 2018 Service Industry Study).

#3: Leverage technology when recommending additional service work.

Customers are much more likely to accept additional work recommendations when tablets are used to list specific details of the issue (59%); provide a cost estimate (57%); access service history (57%); and show a menu of available options (56%) (J.D. Power 2019 Canada Customer Service Long-Term Study).

#4: Be transparent with pricing on your website.

70% of consumers want to view price ranges for various services on a dealer’s site, while 55% would choose one dealership for service over another if it provided online estimates of costs during the scheduling process (Cox Automotive 2018 Service Industry Study).