Attracting aftersales customers

In ICDP research outputs and in my blog previously, we have talked about the need for franchised dealers to extend their aftersales business out to older age vehicles and additional repair categories in order to address the natural decline that will follow as BEVs become an ever-increasing part of the younger parc that the dealers have previously focused on.  The second part of our Summer Members’ Meeting in London last week focused on this with great and much appreciated input from Knut Breivik at the Norwegian Dealers Association, NBF.  The simplest way to address this is not to lose the customers in the first place, so having retention strategies and tools in place that reduce the drift into the independent sector when a car is out of warranty.  That is clearly a top priority, but the effect will still be gradual as improved retention will only affect those customers at that point in the life cycle, not those who have already gone, or didn’t buy from your dealership but are still now using independents.

There is clearly another side to this coin, with independent repairers who have an established customer base of younger and medium aged cars and want to retain them in order to maintain and grow their business in an increasingly competitive market.  The independents are proving that they can work on cars with the latest technologies, and the customer experience can be the same or better than an authorised repairer.  This means that the playing field is wide open, with customer preference being the deciding factor rather than any fundamental question of capability or a desire of repairers to focus on cars in a particular age segment.

I am experiencing this challenge with my dealer hat on.  At Auto West London, we have a service centre quite centrally in Wandsworth, which has two separate workshops, with their own frontage onto different roads.  One is focused on work for Omoda Jaecoo that we sell from our Chiswick showroom, but with a parc that is still very young, the oldest cars having been sold 20 months ago.  The other is our ‘all makes’ workshop for which we hold a Bosch Car Service franchise.  The facility itself has been a dealership for decades, earning itself a reputation as the ‘village garage’ but it was closed for a year or so before we reopened after taking on the lease.  The previous franchisee transferred the business to another location, transferring the customer data with them.  We therefore effectively started from scratch.

ICDP consumer research consistently shows that the three most critical factors for an aftersales customer in choosing a repairer are trust, convenience and affordability - in that order - with trust being twice as important as the other factors.  However, it also shows that 73% used the same repairer for their most recent work as they did on the previous occasion, meaning that customer loyalty is high, perhaps influenced by the criticality of trust.  You can assess convenience easily, and affordability from menu pricing and labour rates, but trust is more intangible, and feeds back into affordability if you don’t trust a repairer to honestly advise you on the work that is required.

This is demonstrated in the efforts that we are making to build up the ‘all makes’ aftersales business at the Auto West London service centre from zero.  We are in a primarily residential area so there are not many local competitors and those that are present tend to be operating from unattractive, untidy premises that do not inspire confidence.  We have a comfortable customer lounge, gigabit wifi and are in walking distance of stations and shops, so we should tick most of the convenience boxes for the 20,000 households that are in the three postcode areas around the workshop.

We have benchmarked our labour rates to be competitive against franchised and independent repairers in that part of London, and have promoted various offers to draw customers in including a free MOT test with their first service, £50 discount for local residents and a £50 Amazon voucher for referring another customer for a service.  We should therefore have more than ticked the value box.

As the saying goes, you earn trust, and that is the challenge that we face at Auto West London, and every repairer does in trying to attract new or lapsed customers into their workshop.  The only measure of trust is that implied by customer reviews, but you only build up robust review scores over time with a volume of business, so it becomes a ‘chicken and egg’ situation.  It is much easier to lose trust – surely a factor in the 27% of owners who switched repairers.  Faults were not properly fixed last time, service quality fell short of expectations, the price last time or quoted now feels too high, appointments are not readily available.  These are all push factors that lead to a car owner looking afresh at the repairer options available.  Our target market for service customer conquests is that 27% who have come onto the market and are actively looking for options.

I doubt there are many car owners who make a note of a potential future repairer for when their service is due or brakes need overhauling.  You therefore need to ensure that you are visible with a positive profile when as a result of that disruption, the car owner starts to consider options.  The leaflet drop or social media post from two months ago is probably irrelevant.  But just as we have the ‘moment of truth’ in the car buying journey, this applies to aftersales – every aspect of the interaction with the potential repairer has to give the customer confidence that they are making a good choice in the possible switch.  But it will still be a slow burn as we ask customers to change their habits.