Monday, June 2, 2014

Brand Loyalty Through Independent Repair Shops

In most of our posts, we aim to provide insights and answers. But this time we’re going to ask questions…because we don’t yet know the answers. (At least, we can’t prove that we do—yet).


Here’s the challenge: We know that independent repair shops have a significant share of the market for maintaining and repairing vehicles, especially older vehicles. Further, we know that the average length of new vehicle ownership has been increasing in recent years, and that owners of older cars are less brand-loyal when they buy their next vehicle. So, we have a significant fraction of owners that don’t come to dealers for service, and are brand loyalty risks.


Here’s the main question: How can we influence these customers’ brand loyalty? Specifically, how should we interact with independents (and chains, for that matter) to maximize our customers’ brand loyalty? Put simply: How can we have our customers’ experience at an independent repair facility reflect well on our brand?


This is a tricky question to answer. Dealers and OEMs have a complicated relationship with independent shops, which are our main competition for service. But, they can also be our customers; plenty of dealers sell genuine parts to independents. Finally, independents are also, to some degree, OEMs’ partners. We know that no dealer will ever get 100% share of the service market. Don’t we want our vehicle owners to have a great repair experience, no matter where they go? When the repair is finished, don’t we want the owner to still love his car—to love it so much that he’ll want to buy his next car, new or used, from us?


I argue yes, that is what we want. Sure, we’d like vehicle owners to be so dissatisfied with the independents that they’ll return to the dealers for service. But, more than that, we don’t want owners to have a negative service experience—whether at a dealer, a chain, or an independent—that would influence their overall opinion of the vehicle. If a repair experience goes bad, will the owner blame the crappy shop or his crappy car?


It depends. In some fraction of cases the owner will blame the vehicle. So, the next question is: Can offering robust product support resources (i.e. training, diagnostics, service information) to independents lead to better repairs, lower cost of ownership, improved owner satisfaction, and loyalty to the brand? And, because independents typically service many brands, can we also use superior support to help conquest customers from other brands?


We are, of course, required to provide a certain level of information (and Right to Repair legislation may broaden those requirements, but that’s a subject for another day). So, the next question is: Can we use these resources, strategically, to improve brand loyalty?


Aside from the direct benefit to the customer of a higher quality repair, is there any merit to the claim that independent repairers can be effective brand advocates? Techs and shop managers do have opinions about what vehicles they prefer to repair. How often are they advocates for particular brands? In short, if we can provide effective support to independents can we improve our customers’ brand loyalty?


We don’t know the answer to these questions. Teasing out the factors that influence customers’ brand loyalty is hard, especially when looking at indirect factors such as late-in-life service experiences. Then, there’s the thorny issue of partnering with our competition—that concept doesn’t always go over so well with our dealers. We’re looking at questions that are hard and politically unpopular to answer. It’s not surprising that no one (to our knowledge) has cracked the code on this topic.


We think it’s worth investigating. Brand loyalty involves big dollars, in terms of lifecycle value, for each and every customer. Even secondary factors such as independent service experiences matter, and have a place in our overall brand strategy loyalty.


So, how can we answer these questions?


There’s plenty of research that examines vehicle brand loyalty. We know that many factors influence brand loyalty. Examples are service experiences at the dealer, garage composition (what other brands a household owns), and even recent rental experiences. However, there’s less clear data, at present, on the impact of service experiences at independents. That’s because these experiences are typically perceived to be a secondary or tertiary influence on purchase behavior. So, not only are the stakes somewhat smaller, teasing out the signal from the noise is also more difficult. We need information that will let us control for all the other factors.


Here’s one part of the approach: Like other loyalty studies, we want to sample recent purchasers and ask about all the factors that drove them to their purchase decision. Unlike other studies, we’d focus on owners who had older cars and were not dealer loyal. Further, we’d use responses regarding the typical loyalty factors to segment owners into similar groups, in order to isolate the one set of questions that would be unique to this study: an in-depth look at experiences with independent and chain service outlets, and how these experiences influenced perception of their vehicle, and ultimately their recent purchase decision. The goal: to determine how much these experiences influenced the purchase decision.


The other part of the research would explore the linkage between OEM support and independent repairers’ repair quality and perception of OEMs. This research would likely consist of focus groups of independent repairers, as well as a conjoint survey of such repairers. The goal: to assess what forms of support have the greatest impact on repairer effectiveness and advocacy.


Carlisle & Company is looking for OEMs that are interested in collaboratively researching this topic. We believe that the ROI of such research is worthwhile. If interested, contact bcrounse@carlisle-co.com.

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