It’s a Game of Perception

Rick NewsletterI was doing some research recently when I ran across a web article that was published by a VERY well know car magazine entitled “Service you right: How to avoid getting scammed at your dealer’s service desk”. Needless to say, I had to invest a few minutes of time to read it. There were two things that seemed to jump right off the page to me… First was the fact that the article advised consumers to always bring their owner’s manual in when requesting mileage based maintenance (for obvious reasons) and second was the comments by the readers (which I will discuss shortly).

Now before you pass it off as just another article that bashes our industry, consider this….the author’s (and also many of the reader’s) perception is that our industry is somewhat less than reputable. There is that perception word again. It doesn’t have to be true; we just have to understand that peoples’ perception is their reality. I think the sooner we realize this, the better off we are.

Speaking of perception, here are just a few of the reader comments:

  • The one way a dealer can earn my loyalty is summed up in one word: “Trust”. Fortunately, I found one at which the service department will even advise me against doing stuff I don’t really need to. I won’t do a commercial for them here, but as a result, they get repeat business from me. Simple as that, but some dealers never learn.
  • Dealers are lying blood sucking leeches
  • NEVER EVER GO to a DEALER for service…they charge 10 fold
  • Do your homework before you come to a dealer, now-a-days technology like computer internet helps the buyer get more knowledge than the salesman… good article

While you may agree or disagree with the opinions above, there’s only one guaranteed truth….all of the comments are based on the readers’ perception and therefore are the readers’ reality. So if that’s the case, what can we do to help alter their perception so that it more accurately reflects the actual reality? The reality where we are competitively priced, don’t recommended unneeded services, and care about our customers…  And how do we accomplish this without costing ourselves profit?

Let’s start out with the maintenance menu since that’s the main focus of the article. How is your current menu configured? Do you differentiate between factory recommended and dealer recommended services and allow the customers to make an educated decision? Are your dealer recommended services easily justified by the advisors?

Consider the following example:

Dealer A presents a $400 service every 15,000 miles. Dealer B presents just the factory recommended services with an alignment, balance and wiper replacement once a year. While both will have success with their sales process, one can argue that dealer B will have a considerably higher closing ratio due to the incremental sales. Obviously the lesser expensive services will be more attractive to the customer and are thus more likely to generate a yes. Over the long haul, assuming consistent presentations, Dealer B will always outpace dealer A in sales, gross, and ultimately the most important measure: customer retention.

Think of the customer perception between the two approaches. What happens to dealer A when the customer checks the recommendations against the owner’s manual like the article suggests? Isn’t it fair to think that the customer may be inclined to just chalk it up to that aforementioned negative perception and not return? And ultimately isn’t dealer A simply strengthening that negative perception?

Dealer B on the other hand is fighting the perception by presenting justifiable services. Some that are justified by the owner’s manual and others that are easily justified by the advisors and the customer’s themselves. As I said earlier, in the long run this store will always outpace the other because the customers are more inclined to say “yes” to the recommendations AND are far more likely to happily return. This is clearly evident in the first of the readers’ comments that mentions earning their trust.

Another less obvious but equally important factor is employee satisfaction. Think of the service advisors’ mindset in presenting a menu of services that they would not personally purchase. Wouldn’t we all agree that they would be far more confident in presenting the services of dealer B over those of dealer A? When any salesperson’s presentation is one of confidence, it will be far more likely to close.

When all is said and done, dealer B ends up with happy advisors, confidently presenting a menu of services that is more likely to close and more likely to prompt the customer to return. That returning customer eventually builds trust in the dealership and will statistically be north of 70% more likely to purchase their next car there. They become an advocate of the dealership, their staff and their business practices and most importantly…no one loses!

So consider taking a look at your business model today and ask yourself “Do I promote positive perception or strengthen negative perception?” After all, one thing we know for sure is once our customers develop a negative perception of us, it’s a long hard road to overcome.

 

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