What dealers need to know to ensure continued loyalty

This article initiates a series analyzing this year’s Urban Science/Harris Poll survey. The survey delves into consumer perceptions of the relevance of the traditional automobile dealership model.

This year, the length of time Americans keep their cars hit an all-time record high — 12.6 years, according to S&P Global Mobility. Even those who don’t know that number likely realize there’s a huge spike in the need for auto service based on the glut of cars in dealership service bays.

The boom has come along at the perfect time for dealers. Harris data shows various factors contribute to the downturn in vehicle sales. Among the reasons survey respondents cited for delaying vehicle sales include the following — Affordability of vehicles, 67%; High gas prices, 48%; Cost to service vehicles 48%; and cost of vehicle insurance 48%.

Although GlobalData projects that in 2024 there will be 16 million light vehicles sold in the U.S. — almost a 4% increase from 2023 — month-to-month volatility may change the outcome.

Economic recession risks, tighter credit conditions and high car prices are among the factors that have caused some analysts and automakers to revise their 2024 sales projections downward.

That’s just another hit for dealers who had slim inventory but earned record profits during the global pandemic, computer-chip shortage and other supply issues thanks to built-up consumer demand. One lesson from that boom applies to service. Dealers must continually earn service customers’ loyalty, especially now that it is increasingly important to consumers.

How Dealers Can Bolster Their Service Offerings

The vast majority of dealers surveyed (93%) understand that a good service department is key to unlocking car sales. In fact, Urban Science analysts conclude that service-loyal customers are twice as likely to buy from the dealer where they service their vehicles.  To that end, (88%) have processes in place to seamlessly transfer new vehicles sales opportunities from their service lanes.

Those processes range from vehicle connectivity data (86%), customer outreach on service needs (91%) and keeping pace with EV service demands (91%).

That’s vital according to Urban Science analysts who found that dealers who tap customer engagement tactics can increase the likelihood for a new-vehicle sales from their customers by over three times.

As the auto industry learned after the pandemic, it’s important for dealers to take steps to ensure customer loyalty before they are needed.

One way to do so is to consider Urban Science’s ServiceView. It gives dealers a comprehensive look at their Service and Parts departments and helps them identify where them can improve and capture more sales.

ServiceView’s detailed analytics dig into essential Service data to reveal insights that drive efficiency and boost performance. With a range of flexible modules, ServiceView provides a complete overview of service performance across your network and dealership.

The past few years have shown the increasingly important role a dealership’s service and parts department plays in the overall profitability of the store. ServiceView is a proven way to ensure that profit centers continue to produce outstanding results.

1. Source: Urban Science Online Consumer and Dealer Studies, February 2024. These surveys were conducted by The Harris Poll on behalf of Urban Science among 3,005 U.S. adults aged 18+ and 250 U.S. automotive dealers.