How a dealership's service center can use mobile to combat recent market threats
In a report titled “The Keys to Rescuing Service Profits”, commissioned by Cars.com and performed by research group GfK, some important data was published regarding car dealership service centers and current market conditions. While not surprising, many of these findings were quite alarming, and car dealerships must act swiftly in order to combat these market threats. In this article, we will summarize these key findings, and we will discuss what this means for the future of mobile in this industry vertical.
Key findings for car service centers
Increasing average vehicle age
The report found that the average age of a vehicle on the road has grew between 2008 and 2013 by 14%. Additionally, approximately 86.4% of vehicles on the road are not covered under warranty, and, by 2018, the average vehicle age will be 11.5 years. This data indicates that newly manufactured cars are simply lasting longer. This means that car dealership service centers have less total demand for service and maintenance work.
Decreasing customer loyalty to dealership service centers
Customers no longer feel loyal to their car dealership’s service center. This, in part, is to cars outlasting their dealership service warranty. Customers shop around and go to local or national chain service centers once their warranty is expired. As a result, it is estimated that dealerships loose between 60-78% or their expected lifetime revenue for cars between three to six years old. Even more, dealerships loos between 82 and 92% of their expected lifetime revenue for cars that are older than seven years.
Key qualities consumers look for
When surveyed, consumers reported that the qualities they care about most when selecting a service center are trustworthiness and reassurance on price. This means that customers prefer service providers with high-quality, manufacturer verified parts. Additionally, customers want to ensure that they are receiving competitive market prices for their services and that they are not being overcharged.
So, what role can mobile play?
While the key findings that cars are requiring less maintenance and that customer loyalty to dealership service centers is decreasing do not bode well for car dealership service centers, these issues are not insurmountable. In fact, when compared to small, locally owned service centers, car dealerships are best positioned to cater to consumer’s key preferences of having a trustworthy service provider and being assured of competitive pricing. Car dealerships simply convenient and effective channel in which to promote and sell their superior car maintenance and service products - a custom, branded mobile app and provide this channel. Within this app, for example, the dealership’s service center can detail their team’s credentials and manufacturer partnerships in order to increase perceived trustworthiness among customers. Additionally, the mobile app can feature price-cap guarantees and price comparisons so that customers are assured they are getting competitive pricing for their needed service.
Above are just a few of the ways in which car dealership service centers can harness mobile to combat unfavorable market trends. If you are interested in reading more, check out our detailed post on the many ways in which a custom mobile app can help your car dealership’s service center increase revenues.
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