It all starts with the dealers, and one of the biggest areas they need to improve: consumers’ cost perceptions. Carlisle’s 2014 Consumer Sentiment Survey asked consumers what criteria were most important in the service process (see following chart). “Relative Importance Ranking” illustrates how highly consumers ranked a criterion. “Total cost is reasonable” tops the list both in relative importance and overall rank.
Why? The biggest problem is likely the opaque nature of the service process. Take the typical service experience. A customer brings their car into a dealer’s service department for routine maintenance. The dealer runs a multi-point inspection and comes back to the customer with recommendations for additional services. The service advisor asks the customer to sign off on the additional maintenance.
At this point the consumer begins to feel uneasy. Everyone “knows” the dealership has an incentive to sell more than the customer really needs and to charge a lot for it. If a customer doesn’t know much about cars or what services should cost, they’ll view these recommendations with suspicion. Maybe the dealer offered a fair price and the car genuinely needed those services, but the customer doesn’t know if either of those are true. This leads to a cost perception problem – consumers feel that they either overpay for services or purchase services they do not really need.
So what can OEMs do to rectify this cost perception problem? They need to connect the car.
First, customers need to know what services are necessary. Sensors in different parts of the car could provide this data. The car detects what is needed and sends information to the customer – either through onboard systems or to a computer or smartphone. This way, when the customer rolls into their dealership they have some background knowledge about what service is required; they are not solely taking the word of the service advisor.
Second, consumers need to know that they are paying a fair price for the service. Eventually, the connected car should be able to pull in pricing data from area dealers to give the consumer a dependable estimate. Dealers may not like this idea, as they feel consumers will flock to lower cost service providers. Maybe so, but consumers are free to price shop now – and they do! Even if dealers don’t display their prices, anyone can call a dealer to get an estimate. Having the connected car generate an estimate saves everyone time. Additionally, the connected car can tout the benefits of local dealers. The car could pull in information about various dealerships’ service departments – such as what amenities are offered, what certifications technicians have, and positive reviews from other customers. All this information would give the customer a sense that they really are getting their money’s worth.
Bottom Line: Dealers have a cost perception problem. Consumers feel that they spend too much money at dealers – either by overpaying for services or paying for unnecessary services. OEMs should proactively address this, since service satisfaction impacts repurchase likelihood. The connected car can help OEMs solve the cost perception problem – both by giving trusted recommendations and clearly showing the benefits of servicing at the dealer.