The automotive industry used to make good margins from second hand vehicle and service/spare parts with the margins on new vehicles being substantially less. With the changes brought by the internet and other technology, margins on second hand vehicles have dropped significantly, while new vehicles often come with 3-5 years of service included. This leaves spare parts as the major margin contributor. The reduction in margins has led to a consolidation of dealership ownership, leading to fewer, bigger dealerships.
Driven by the above changes, the industry has moved to a “customer for life” approach. This means that customer experience management is critical. A really good customer experience in all aspects of the vehicle ownership process means that the customer will stay with the brand and contribute to revenue and margin across all aspects of the business.
Typically the major automotive brands and dealerships are very good at mapping the customer’s experience across all touch points and ensuring that processes are in place to ensure the customer enjoys their dealings with the business. Occasionally the process doesn’t cover everything and the results can be a really bad experience that can cost the business a loyal customer. The story below covers one of those unmapped experiences.
A few months ago I organised one of our cars in for a pre-registration service. The vehicle is dealer serviced and I have been dealing with the same business across a number of vehicles over the past 14 years.
On this occasion the vehicle was damaged by the business that washes and vacuums the cars after the service (a sub-contractor to the service business); a fairly deep bumper scrape. My service advisor was very apologetic as well as proactive and said they would organise a repair and provide a loan vehicle while mine was being repaired.
When that I took the car in for the repair I asked that the entire bumper be repainted, not just the area that was damaged. Painting a small area of the damaged part is what the industry calls a blow in and is the cheapest and most obvious repair that could be done to the bumper.
When I collected the vehicle I told the service advisor and one of his associates called in to check the work that the paint looked to be a different colour in the repair area vs the rest of the bumper He and the other employee thought it was OK. It was hard to tell given poor lighting both inside and out. I took the car home and gave it a careful check on the first bright sunny day after I got it back. The repair was an obvious blow in and not a very good one at that.
According to a friend in the industry some repairers take the chance on the blow in as it is approximately one third or less of the cost of the alternative and many customers don’t notice or complain. Even if one does complain the cost of fixing the few who complain makes the practice economically viable.
I returned the vehicle and stated the repair was unacceptable. The service advisor and another senior employee agreed. Once again I was given a loan vehicle and told the vehicle would be fixed properly. Another few days went by and I was advised the car was ready. This time the entire bumper was repainted. Unfortunately there was still evidence of some small imperfections in the bumper where the scrape had been repaired. Once again I left in a loan vehicle.
After a few more days I was told the vehicle had had a new bumper installed and painted. This time I left in my own vehicle with a bumper that was like the one I had brought in at the time of the service.
I asked the service advisor why the repair had been cheaped out on, when I had specifically said I did not want a partial bumper repaint. His response left me with my mouth open. “The car cleaning business had paid for the repair and they must have pushed for the repairer to do it as inexpensively as possible.”
All I could think was your sub-contractor took over your customer service experience which they had already damaged, and made it worse!
My response to the service advisor was that their car cleaner had managed to take a happy customer and make him pretty angry. What should have been a pretty simple service had turned into a continuing saga of poor performance and disappointment.
The decision that the sub-contractor broke it so they had to fix it meant that the business abdicated its management of the service experience to a supplier who only wanted the lowest cost outcome for their business… not the best customer experience!
At the same time the service business lost the use of a loaner vehicle for over two weeks
I gave lots of feedback during the process and would hope that they paid attention but I’m probably not going back.
Has the business fixed the problem? Probably not. Will they lose other customers over time? Well scraped bumpers in tight confines with a lot of cars are not uncommon. So they will probably lose more customers if they continue on with the process as it stands.
A more thorough customer experience map, with regular reviews and input from operating staff would prevent this type of issue.
Tom Newton is the Principle Consultant at Competitive Insights. https://competitiveinsights.com.au