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March 20, 2020

Customer retention is a key to success in the repair and maintenance industry

The automotive service industry is a competitive environment in which customer satisfaction and loyalty are vital factors in success. In this article, the aim is to explore the customer retention challenges in the auto repair and maintenance industry, what the problems may be, and how these can be solved.

First of all, let's determine the problem

Understanding that customer loyalty and retention is important as the first step; knowing what can improve or influence it, is the critical second step.

Step 1 - Customer retention - how important is it?

While all your focus is on bringing new customers, have you considered the cost of failing to retain the customers you have already earned? Business insights collected by Invesp states that it costs 5 times more to attract a new customer than to retain a current one. The problem is that many businesses underestimate this in their daily job. On top of that, most are over-optimistic about the number of customer returns. Practical example: We often hear from workshops that all of their customers are loyal and come back. Then we ask them to open their invoicing and pick a random customer. Then we see that this customer has come only once in the last 2-3 years. Of course, there are also those workshops that are recognizing the value of returning customers and focus on doing more of the right things. On one hand, it costs you less to retain a customer, but if looked from another perspective that would also mean maximizing the profit for your repair and maintenance business. According to research done by Bain&Company, increasing customer retention by 5% increases profits by 25% to 40%. The arguments behind those statements are that return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline. Even more, return and loyal customers refer others to your company. Of course, not every customer has the potential to be profitable and long-standing.

Step 2 - Can you improve or influence customer retention?

Yes, and we have added some concrete ideas you can consider to build long-term customer relationships. Be aware, we are also biased here as it’s one of the main focus points when we work with customers from the repair and maintenance industry.

First, let's have a few examples of what may cause a customer to choose another service provider:

  • The customer’s experience. From the first contact, when a customer reaches you, to the visit to the repair shop and to the evaluation of your provided services.
  • Convenience. It’s about your physical location, how nearby your customer is. On another hand, it’s about time and availability that you can agree on.
  • Communication. Fast, clear and transparent communication, that’s what most of the customers need from the repair and maintenance provider;
  • Friends/colleagues. Consumers will always value social proof and recommendations. It’s all about trust. Quite often people rely on circle-of-friends and their experience with a service provider.
  • Price. One can’t do much about it if customers are price sensitive. However, there are ways to increase the value-added by choosing you.
  • New trends and options. More people choosing leasing options, new cars come with connectivity and quick access to the dealer’s workshops. Why? To make their customer experience more convenient.

These are the points that are reasonable enough for the customer while choosing the right auto repair and maintenance provider. The first step would be to determine what makes your customers loyal, and if you can replicate those actions, you can influence customer retention and grow your top customer lists to increase business.

Customer retention in the repair and maintenance industry

Develop a customer retention routine

The next step is to find and implement customer retention strategies that would be helpful for you. You can’t keep all the customers, but by following some strategies and tactics you can retain customers and build long-term customer relationships.

Aim to provide the best customer experience. What makes customer service good? When you make customers’ lives easier and remove obstacles. It’s about giving them what they’re looking for fast and with high quality. What makes customer service great? It’s the intention to go the extra mile in the best interest of the customer. It’s about going beyond the norm and creating more value for the customer. That, of course, will come in different ways, depending on the situation at hand. Some examples are being proactive in solving an issue before it becomes even more serious or providing more explanation to customers who do not know much about cars. At the end of the day, the customer will like to share the story of the professional service at Mr. Andersen’s and the new thing she learned about her car today.

Positive social proof. Nowadays, most of the consumers before buying any product or paying for any service check its reviews or testimonials. Dedicate time to check your online presence and if possible, evaluate NPS (Net promoter score) of your customers, for example. The score will show you the level of customer loyalty, how likely they would recommend you and if they are satisfied with the services provided. In a non-digital world, it’s about asking a friend or a colleague about their experience. It’s all about finding a trustworthy source that will validate your choice. Positive social proof motivates many consumers to act. This is one of the strategies to attract customers to your business but also builds trust with new customers that you want to keep. Providing positive social evidence has the power to influence customers to have a positive opinion about the service provider.

Take advantage of new technologies and digital services. In today’s digital world, nothing can replace the human touch. However, our daily interactions are predominantly taken over by our smartphones and computers. It’s a fact that all service providers must understand and take advantage of because customers demand online dominated experience at certain stages of the process. For many businesses in the repair and maintenance industry, this could be a real challenge as it requires time, effort, and investments. Fortunately for them, they can benefit from experienced partners who are ready to guide them. It’s very individual to the business what to prioritize and implement, but there are a few things that must be considered - online booking for better convenience of both the company and customers, active profiles in Social Medias with plenty of free tools, or creating a link through connected car services.

Upselling the right things at the right time. Knowing what to offer your customers is crucial. According to the studies, 30% of customers are unaware of the vehicle service schedule, and over a half rely on service notification from the repair and maintenance provider. Having this in mind and a tool from the repair side could create a path to any customer. Receiving a service alert that could showcase the current condition of the car, service maintenance, and a personal reminder regarding the upcoming service would be a key solution in the customer retention challenge.

connected car technologies to improve customer retention in the repair and maintenance industry

For the ones who want really to differentiate

Create a link to your customers through the connected car. Connected car technologies have opened a direct way of communication between car owners and service providers. Having a powerful solution from your side could keep you closer to a customer, by providing an overview of the vehicle, occurring the problem before your customer would even call you, and take a more informed decision when advising a customer. Actually, according to a European wide study conducted by FIA, consumers were overall willing to share vehicle data, with the highest preferences of them being comfortable to share traditional repair, maintenance, and technical information. 88% were comfortable to share ‘Vehicle breakdown and diagnostics data’, whereas 85% were comfortable to share also other ‘Vehicle data such as mileage, fluid levels (fuel, oil)’.

Engage proactively with customers. Knowing with whom to engage is a tricky point because the goal is not to sell something that your customer doesn’t need. However, convenience is crucial for many customers and you can use it as a bridge. Let’s imagine a situation where a lightbulb in the car of your customers got broken. Option first for him would be to spend time on his own, search for the right bulb, order, read or watch guidelines on how to install it, spend time on the installation process itself. All that requires his time and knowledge. As an alternative, he could contact the repair master directly, through a convenient communication channel and agree right away on the time. A third more convenient solution here could be a connected car service, that could help to occur the problem before it would happen, inform both garage and customer, and help to agree on the right time to replace it. To have such an opportunity is unique both for you as a repair and maintenance provider and for your customers.

Giving your customers possibilities. Do not just resolve the current issue - head off to the next one. Supply your customers with complimentary possibilities and new technologies that could make their daily life more convenient and driving experience better and safer. For instance, providing them with a digital tool that could create a link between a mechanic, a connected vehicle and a driver in one place. A tool that can inform customers of the required vehicle service and keep communication with them. From the customers’ side, they would be able to get access to complimentary tools like fleet management dashboard, automatic trip-logging historical overview, and create personalized reports specific for their needs.

Are you ready to improve your customer retention and experience today?

Even though gaining new customers is a sign of business growth, losing customers might cost you way too much. Create or review your own customer retention strategy and own path to the customer by using the article’s insights and ideas. With the right strategy, you will be closer to your customers, be able to build strong and long-term customer relationships. You can also read our article with recommendations and tips on how to be a customer-oriented garage. Learn more about OBI+s suite of connected car services that can empower your business and a practical link both to the connected cars and to your customers. Reach us by email or phone in case of any additional questions or information needed. We are here for you.

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