The automotive dealer service department is an important source of revenue and a touch point that can increase customer loyalty when they’re ready to buy their next vehicle. But there’s been a shift in the automotive service industry. As a result, dealers will need to change who they are targeting with their advertising.
Back in the day, when customers bought their cars at a dealership, they often took the car back to the same place for service. This arrangement established a strong loyalty connection. But more independent aftermarket shops have been attracting customers, especially the consumers under age 50. This change in the market has serious implications for auto dealers.
The Changing Service Loyalty Landscape, based on a survey pool of 4,000 auto owners, was just published by DMEautomotive and outlines what is happening in this market. There’s a lot at stake here as the auto service market is valued at $215 billion a year. Auto dealers account for about $78 billion of this market.
Consumers who are most likely to take their cars to the dealership for service are over age 60. In general about 46% of all customers who go to the dealership are over age 50. On the other hand, 47% of consumers who go to aftermarket chains are under age 34.
In addition, once a car goes out of warranty service, dealers see a steep decline in consumers who return for brake service, oil changes, tire rotation and balance, battery service and tire replacement. Once a vehicle reaches the 3-6 year age range, dealers see a 47% loss in the standard service business.
As a result of these changes in the marketplace, more dealers are expected to promote their service departments, and to target younger customers, especially with loyalty programs.[Source: The Changing Service Loyalty Landscape. DMEautomotive.com. 5 Mar. 2012. Web. 12 Mar. 2012]