Fixed Ops Journal - August 2016 - (Page 34)

FIXED OPS JOURNAL CHANGING TIMES ■ What dealerships, and customers, look for in an oil change RICK POPELY foj@autonews.com O nce upon a time, when dealerships could count on paid repairs and warranty work to keep their service bays humming, mundane maintenance such as oil changes often wasn't even on the radar at many shops. Why clog your service department with low-paying work when plenty of big-ticket business was available? That began to change around the turn of the century, when General Motors, Ford Motor Co. and others began pushing dealers to install express service bays. Now - with new-car margins shrinking, warranty work diminishing and vehicles generally needing fewer repairs - the trend is taking on new energy. More dealerships are building their service business around oil changes and other routine maintenance to keep customers coming back, including when they need a major repair. Lee Harkins, CEO of dealer consultant M5 Management Services Inc., in Pelham, Ala., traces the shift back to the recession of 200809, when many dealerships took serious hits to their service revenue. "You don't appreciate it until it's taken away. Before, as an industry, we just had to focus on making the sale," Harkins told Fixed Ops Journal. "Now, we have to focus on making sure we take care of the customer. "It was a home-run mentality in 2005 and 2006, and now it's a singles mentality. Before, we tried to sell the customer everything we could. Now, we just have to hit a single and keep the customer coming back." Rising share Dealerships have increased their share of the oil-change market, from 31 percent in 2011 to 34 percent last year, according to IMR Inc., a Westmont, Ill., research company that surveys consumers on where they service their vehicles and why. However, dealerships lose oil change business rapidly as vehicles age. IMR says that for the first three years of a vehicle's life, dealerships get 64 percent of oil changes, but from four to seven years, they get just 40 percent, and for years eight to 11, 24 percent. PAGE 34 AUGUST 2016 Why here? Consumers' reasons for where they chose to have their oil change done DEALERSHIP Good prior experience 40% My trust in the store/shop and its personnel 17 The warranty on the part 8 My loyalty to a particular store/shop 8 Convenient location 7 Low prices 3 Fair prices 1 The brands of parts offered 1 The store/shop had other things I also needed to buy 1 Friend or family member's recommendation 1 Quick and easy checkout procedures 1 Other 11 AFTERMARKET SHOP 47% 10 0.3 5 19 7 3 0.3 1 4 1 2 Note: Percentages are rounded; other responses each accounted for less than 1% of answers The top reason consumers cite for where they get oil changes is that they had a good experience during a prior visit, IMR President Bill Thompson said. That is true for dealerships and aftermarket shops. For dealerships, the second most given reason is trust in the store and its personnel, while No. 2 for aftermarket shops is a convenient location. Price doesn't make the top three reasons for either. "Some people are willing to pay a bit more for convenience. In that case, price becomes secondary. So, it's not that it isn't important, but other factors may become more important," Thompson said, and that gives dealerships an opportunity to capture more customers if they can provide fast, easy service. Harkins agrees, saying dealerships need to overcome widespread perceptions that they take longer and are overpriced compared with quick-lube shops and instead stress their knowledge of the vehicle. "You have to get the customer's head straight on what they should expect in maintaining the car," he said, and that should include providing a maintenance schedule when a car is delivered. "Lay those services out, put a price on it, let Source: IMR Inc. them know when the service is due, and show them what they need," Harkins said. "Start talking to the customer about how important maintenance is, and we can start growing this business considerably." 'Take the roadblocks away' Mike O'Neill, fixed operations director at Apple Automotive Group, which sells 13 brands in York, Pa., said dealerships must recognize how much customers value time and convenience. "Some will pay $30 for an oil change when their car is under the manufacturer's free maintenance program if it's inconvenient to go to the dealer," he said. "You need to take the roadblocks away to make it convenient to go to the dealer, whether it's your hours or your staffing, reception, the waiting areas or the amenities you offer." Staff members at small-town Michigan dealership Pinckney Chrysler-Dodge-JeepRam, situated in a bedroom community between the larger cities of Lansing and Ann Arbor, know that people who buy vehicles from SEE OIL CHANGE, PAGE 36

Table of Contents for the Digital Edition of Fixed Ops Journal - August 2016

Fixed Ops Journal - August 2016
Contents
Editor’s Letter
Service Counter
Legal Lane
Treading confidently
'Tis the season
Profit Builder
Valet service
Richard Truett
OEConnection
Changing oil:
Photo story
Trade-off
Toyota way
Feedback
Lone star
Airbag recall
Forging links
Top 50
5 Minutes With
Shop Talk
Fixed in Time

Fixed Ops Journal - August 2016