Dealership services, whether variable or fixed operations, are relationship-based, making communication a key factor in building trust between dealers and consumers. Historically, this trust has been built through in-person interactions, but exceptions to this rule have emerged as market conditions shift and customer expectations evolve. One such exception is how customers communicate with the service department, which is becoming an increasingly important business focus for dealers, and has its own unique set of needs that make texting a highly effective customer engagement tool.
Incorporating texting into your communication strategy will offer your dealership a competitive advantage by meeting and exceeding customers’ needs with an easy solution.
Two converging factors make the service department an especially ripe area for texting innovation. First, fixed operations accounted for 49% of dealership gross profits in 2018 according to NADA’s Annual Dealer Financial Profile. Secondly, recent insights from the 2019 Cox Automotive Technology and Transformation of Retail Study found the service department to be the main area where consumers overwhelmingly prefer to communicate remotely, without stepping foot in the dealership. Service appointment coordination, whether scheduling or exchanging information about repairs and pricing, is particularly conducive to the quick and convenient style of communication that texting allows.
The ability to text is seen as an asset to customers across the board, with 82% of survey respondents expressing that they feel it’s important for a business or retailer to offer texting capabilities. However, only 50% of customers report having texted with a dealership before, suggesting many dealers are yet to take advantage of texting, even though it presents an opportunity to strengthen their fixed operations business (Pollfish, Cox Automotive Research & Market Intelligence Group, Text Message Communications Study, 2019). To protect their bottom line and compete in a tight market, dealerships must embrace new processes, like texting, to meet rising customer expectations and ease scheduling for consumers. Additionally, it is essential to also partner with experienced vendors to ensure text messaging remains compliant.
Meeting Customers’ Rising Expectations
On the surface, service departments seemingly have not evolved since the 1980s when clipboards and hangtags helped streamline the process. When it comes to customer communication, failure to adapt to new systems can have competitive consequences and put your dealership at risk of losing customers. For example, as Millennials become the primary car-buying generation, dealerships must pivot to meet their technology-forward expectations. Millennials will likely choose a service option that is most convenient, so failing to offer the convenience of a texting solution could threaten sustainable business plans.
Consumers, regardless of age, are prone to avoid phone calls if they can, but prefer to communicate via text message. In fact, according to Gartner.com, text response rates have soared to 45%, and the 2019 Cox Automotive Car Buyer Journey Study shows that texting is gaining traction amongst all age groups, making it an even more important communication tool for dealers.
Ultimately, text messaging is a mutually beneficial strategy for both consumers and dealers. For consumers, dealerships with text messaging stand out by speaking the customer’s language while providing more speed and transparency. For dealers, service recommendations are approved faster with texting than through calls or emails. As a result, customers will be more receptive to appointment scheduling or asking a service question when it is through their preferred method of communication: text messages.
Easing the Scheduling Process and Offering Transparency
Implementing text messaging at your dealership is just the first step. Dealerships must also effectively communicate with customers.
These text messages should be crafted to increase customer engagement, which means including convenient links or favorable offers. For example, incorporate a link in your text message that allows a customer to conveniently schedule a service visit with all the relevant data in just a few clicks.
Today’s technology-enhanced retail experience, where we get instant confirmation and fast gratification, influences customer expectation in the service department. Consumers expect transparency about the service they need and pricing, so there are no surprises. Texting facilitates a seamless experience where customers can receive a multipoint inspection, price quote, and images or video at their fingertips to make an informed decision on how to best service their vehicle. This level of open communication allows both parties to overcome the knowledge gap and perceived mistrust that has traditionally been a pain point. Texting allows the service adviser to actively involve the customer throughout the process, building trust that will stand out from the competition.
Ensuring Text Messaging Remains Compliant
In today’s cookie-tracking, technology-forward world, it is important for dealers to have a trusted partner to ensure compliance with data privacy laws. Some dealers have turned to impromptu methods of communication, such as personal cell phone use or other texting solutions, that do not adhere to the strict rules and regulations outlined by the Telephone Consumer Protection Act and other federal and state laws, exposing dealers to the risk of steep penalties for non-compliance.
Once customers opt-in to receiving these messages, dealerships must integrate their texting system with service scheduling systems or CRMs. This will seamlessly offer dealership staff information on the consumer and their servicing needs, before they step out of the vehicle. This will also help dealerships store information to acquire, retain, and build a texting audience with multiple touch points to maintain a customer through their entire lifecycle.
Communication within your team is equally as important as communicating with your customers. Service managers should educate their team on how to sell consultatively while adhering to OEM service recommendations. Technicians should focus on answering questions, diagnosing problems, providing options, and recommending how to best fix vehicles. By arming the service department with texting best practices, consumers will make more informed decisions with easy-to-understand language.
Incorporating texting into your communication strategy will offer your dealership a competitive advantage by meeting and exceeding customers’ needs with an easy solution. As margins continue to thin, the stakes are too high for dealers to not implement these solutions now.
Darrel Ferguson is the director of performance management at Xtime.
Originally posted on F&I and Showroom