Canadian auto dealer connects with two experts to better understand which areas auto retailers should focus on for their digital investments, and why.
“Digital” requires investments in many areas, so it may sound all too familiar when an industry expert says now is the time for automotive retailers across Canada to take advantage of the digital side of fixed ops.
That advice comes from Kate Colacelli, Vice President of Marketing at Dealer-FX, and in her defence that “call to action” is based on company data from their dealers across North America. That data shows that repair order volume is not only returning to the same levels as 2019—but that actual dollars per ROI have also gone up.
“Basically this is a really good time for dealers to take advantage of the digital side of fixed ops and make the process more efficient to take advantage of what’s available to them,” said Colacelli in an interview with Canadian auto dealer.
She said consumers appear more confident and comfortable spending their money on repairs than in 2020. And that, due perhaps to the pandemic and inventory shortages in the market, many consumers are also keeping their vehicles longer.
So where should dealers should focus their digital investments? Colacelli offered three key areas:
1. Texting/ instant messaging solution
From a fixed ops standpoint, if a consumer brings their vehicle in for service, the most convenient and fastest way to contact them, for approvals or questions, is through text.
For example, if a service advisor can quickly get a hold of a customer, the technician may not have to take the vehicle off the lift. Imagine the efficiencies a simple text can create in the service department.
“They don’t have to wait potentially hours to get a call back from a customer to approve repairs,” said Colacelli. “This can have a huge impact on, not only the customer experience, but the overall efficiency of the service team.”
2. MPI follow-ups
A multi-point inspection follow-up, and specifically technician recommendations on MPI is arguably the greatest source of additional revenue for the service department. However, Colacelli said many dealers lack the ability to automate the process of following up with every customer who declined additional service work.
Since the dealership staff is trained to focus on customers entering the dealership, the best way to do a proper follow-up—track and measure the return that they are able to get on MPI—is through an automated or digital solution.
“Searching for a digital solution that can help automate that process and ensure every customer is contacted is going to exponentially increase the likelihood of those customers returning,” said Colacelli, “and then dealers will be able to generate that additional revenue.”
3. Scheduling and payment solutions
When it comes to how service appointments are booked and how service is paid for, it is no secret that consumers expect the same efficiency from all retail businesses: fast, efficient, and not at all in-person—in other words, they should be able to schedule these things through their mobile device.
“Basically this is a really good time for dealers to take advantage of the digital side of fixed ops and make the process more efficient to take advantage of what’s available to them,” said Colacelli.
While many dealers include service schedulers on their website or some sort of form, Colacelli said they need to optimize it and ensure that customers are able to easily and quickly make an appointment through a system that feels intuitive and that syncs with their calendars—along with all the other bells and whistles that mobile-savvy customers expect in 2021.
Colacelli also recommends ensuring the dealership has something that allows them to complete the service experience by paying for it in an equally quick, easy, and intuitive way—again, through their mobile device.
As she puts it: “there are millions of people walking around with an iPhone and they’re using Apple Pay, or Google Pay on Android, or they’re using PayPal. Consumers are getting used to those kinds of digital wallets.”
Looking at how you schedule and how you pay is another way dealers can take advantage of the digital tools in the marketplace when it comes to the service department.
Dealer-FX offers a good example of evolving in these areas, having added the ability to instant message by repair order, along with an internal chat for employees in the dealership to communicate with each other within their workspace.
The company also changed the way their platform is being used, and launched something called “Workspace” this fall, after several pilot rollouts, to tackle this shift.
The hidden equation
Buried somewhere in all of these digital investment areas is one key item, something of a hidden gem to boosting profits in this area—and that is the female customer scenario.
According to Anne Fleming, CEO and Founder of Women-Drivers.com and JoinWomenDrivers.com, the average dealership (rooftop) for fixed ops in the United States has 18,240 borrows annually. Women account for two thirds of those customers.
“If we break that down, that means women are 12,000 customers annually. And we know from our studies that one in four women defect annually,” said Fleming. “Now, people hear that and they’re like “oh, okay,” but let’s look at that: that comes to 3,000 customers per dealer.”
The financial impact of the loss of customer retention from these women gets lost in translation for many people.
The financial impact of the loss of customer retention from these women gets lost in translation for many people.
Fleming said that while some of these customers will simply go to another dealership, many of them will actually leave the auto retail track completely. That can equate to loss of retention, loss of resales, the forfeiting of referrals, a loss of CSI, and overall a loss of trust, social influence, and confidence.
As such, Fleming offers three areas for dealers to invest in when it comes to the broader side of fixed ops:
1. Invest in a review platform
According to the company’s 2021 Women’s Fixed Ops, Purchasing and Digital Trends by Top Auto Brands report, women in the U.S. use reviews 50 per cent more than men, and 92 per cent of customers rely on the credibility of peer reviews to evaluate if a business is trustworthy.
As Fleming puts it, convenience and trust are key; 90 to 95 per cent of women trust reviews from other women. A peer review platform can help put the dealership in a more positive light and help begin to build that loyalty bridge with potential customers.
2. Boost video communications & technology
According to Fleming, smart dealers use video technology to sell visually rather than verbally. She said fixed ops departments are using proof-based communications and have a 20 to 40 per cent success rate in additional service recommendations, which really helps the CSI on the backend, while reviews and retention also improve.
“I love the video show-and-tell, versus the verbal show-and-tell. It just mitigates any distrust, and it really does increase that loyalty and that retention,” said Fleming. “There’s no reason for a couple of extra dollars to not include that in your fixed ops, because in the long run that’s where some of those 3,000 customers annually are.”
3. Increase website info & pricing transparency
Finally, adding pricing and parts for your service to your website is a must today, as it provides peace-of-mind to customers before bringing in their vehicle for service.
As Fleming puts it, and based on an analogy she previously heard: when you buy a plane ticket, you do not buy it blindly—you check the fare first. You are pre-informed before making a decision. The same process needs to be in place for dealerships.
The larger shift to digital requires more time, money, and effort on the part of the dealership. But that investment will save your business and staff a lot of “growing pains” down the road, and it will help position your dealership to be more successful and competitive sooner rather than later—for the long term.
