Friday, January 18, 2013

Is Our Service Lane Helping Sell More of Our New Vehicles, Or Helping the Competition?

I was recently checking out a friend’s Facebook updates; he’s an engineer in Silicon Valley in his late 20’s (you know the type: smart guy, great salary, loves gadgets), and noticed the following post:
Audi dealer gave me a brand new S4 with 39 miles as my loaner. I love the shit out of this car. This was their plan…
I immediately took a screenshot and sent it to a fellow Carlisle consultant: “Look! Evidence of our research in the wild!

In a recent sales customer retention study we discovered that, for one OEM, the sixth biggest lift in retention came from "service loaner vehicles that are the same make". Dealers using this practice enjoyed a 6.5 percentage point sales retention increase over dealers who used other make loaners. This makes sense, right? Loan me a newer vehicle than the one I am driving and I might fall in love.

Look at this set of Facebook posts to see your customer's, and their friends', reaction to getting an Audi service loaner from the Audi store. Within hours, there were over 20 “likes” from friends. This stuff works.

So, do all dealers loan their own make to service customers? Nope. We found that for one brand, better than a third of their dealers loaned other makes rather than their own. Why? They said:
  • I just turned everything over to Enterprise and they don't run my make in their inventory.
  • Loaning my make is too expensive; so, I loan cheaper makes.
  • My "insert other brand here" store is struggling; so, I put those into my loaner fleet.
Bottom Line: Which of these reasons is good enough to justify throwing 6 to 7 points in sales retention overboard?

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