A new AIA study, released today, suggests a strong and ongoing focus on customer loyalty will not only help automotive businesses survive, but will allow them to thrive in an increasingly competitive field.
“At Your Service” is the latest instalment in the AIA’s ongoing Consumer Behaviour series of reports. This one focuses on how Canadians select their automotive service provider.
Among the findings is that dealerships have made inroads in public trust over the last three years.
The survey of over 2,000 Canadians found that among those who always have their vehicles service at a dealership, the predominant reason was related to confidence and reliability (29% in 2019, compared to 24% in 2016). Furthermore, knowledgeability scores increased to 21% from 18% in that time, and customer service scores remained constant at 17%.
Dealerships also won the day on having helpful service advisors, offering timely delivery, high quality of work, good customer service, tech competency, proactive notifications, quality parts, and clean shops.
Among those who never go to dealerships and who only patronize independent chains and shops, however, the primary reasons revolved around price.
The study suggests that the reputation independent auto repair shops have for being a cheaper alternative than dealerships presents a very real threat of price wars between independents, resulting in a “race to the bottom.”
“What is quite clear is that vehicle owners view dealerships differently than they view chains and independent service centers,” the report states in its conclusion. “Price is almost always a focal point where chains and independent service centers are concerned.”
The report suggests that this does not necessarily represent a particularly profitable advantage, nor one that is difficult to overcome. A “race to the bottom” is a very real danger, it says.
Raising trust scores was the focus of several questions. Canadians surveyed revealed their trust in service providers would increase if the same technician always worked on their vehicle (67%), if the service desk did a better job of explaining the value of maintenance (66%), if the shop had a clear strategy for preventive maintenance (63%), and if the shop used video and email to better education them on the work being done on their vehicles (50%).
Overall, survey respondents were split fairly even on which sector outperformed the other: 35% said dealerships, 30% said independents, and 35% said there was no clear winner.
Authors of the report identified a clear stumbling block for the independent sector: public perception about warranty work.
“For ASPs, another entrenched behaviour that is seemingly difficult to overcome is the one surrounding the warranty. For many vehicle owners, having a vehicle under warranty means they must go to the dealership for everything. Ongoing public education needs to happen here in order to better familiarize vehicle owners with their rights.”