Franchised or not, customer vehicle pick-up and delivery is a growing service. But can small dealers keep up with large dealer groups in convenience?
The 2016 Maintenance & Repair Study by Cox Automotive reveals “just 30 percent of total service visits occur at a dealership”. The top reasons dealers are losing out include the perception that value doesn’t exist, poorly tracked service schedules, and an inability to meet customer expectations. These topics have been targeted by dealers nationwide, attempting to win back the market share, using tools like vehicle pick-up and delivery. It’s an extremely successful technique, but not without its pains for the smaller dealers.
How Valet Service Solves a Problem
The problems are all addressed with a sweeping solution – send a valet to pick up and drop off customer cars. It effectively hits all three major pains customers experience:
- Perceived value is increased as the customer’s time is seen as of high worth and a valet service comes with minimal to no cost at all.
- Services are scheduled more accurately and appointments rarely missed as the customer need not lift a finger to have their vehicle serviced.
- Customer experiences are infinitely improved – there’s no wait time, a replacement vehicle is typically left with the customer, and their vehicle comes back fully serviced.
Valet Done Well by Large Dealer Groups
Premier Automotive Group operates dealerships in four states. AutoNation operates more than 350 new car franchises in 16 states. Sonic Automotive has more than 100 stores in 25 states. These massive dealer groups have virtually unlimited resources to service their customers’ vehicles, including the staff to pick up and drop off vehicles as necessary. That goes for both manufacturers who provide valet service as a key component as well as valet as a value-added service.
Should the valet department experience an abnormally large influx, staff are diverted from elsewhere to fill the gap. It’s a luxury that most small, one-line dealers are unlikely to match.
Can Small Dealers Compete?
In today’s automotive service landscape, the standalone dealership or the small, family-run auto groups face a challenge. Can they offer the same level of service – vehicle pick-up and delivery – as the larger dealers?
Reasons abound why small dealers may leave valet service well enough alone.
- It’s an added expense for staffing. During morning and afternoon rush periods, several staff members must constantly shuttle vehicles back and forth to customers. Extra bodies equals extra staffing costs, and budgeting may not permit the extra people on hand.
- There are increased vehicle expenses. A fleet of loaner cars must be available to leave with customers while vehicles are being serviced. Even through factory incentives and low leasing rates, these costs soon skyrocket.
- They can provide more intimate customer experience otherwise. By focusing on doing the rest of the service visit extremely well, a service department can succeed without a valet service.
In the short term, a small dealer can make do with limited or no valet service. Yet, if the current customer trends indicate the future, it’s not likely to be sustainable in the long term.
- Customers will eventually opt for convenience over the personal experience. The perception of their time as valuable is increasing, lending itself to less time devoted to errands and visits to the service department.
- Vehicle sales will decline as a result. Apples to apples, the customer’s expectations will be met or exceeded with service departments operating vehicle pick-up and drop-off services, shifting sales away from those small dealerships who do not.
Vehicle pick-up and drop-off services are undoubtedly quite costly, but even more so invaluable. With more manufacturers like Volvo, Cadillac, and Lincoln on board offering valet as a core service offering, it will soon be a mainstream service. Without it, dealerships can expect steep declines.
Like the David and Goliath story, the little guy can come out on top as a success story. It takes determination and faith that the service you’re providing will pay dividends.