Why are dealerships losing customers to independent shops? How could we apply service manager training to monitor other department issues?

For years, the narrative has been that dealerships are the vehicle repair experts. It could be because they have warranties that require dealership service as part of the binding contract. Or because customers see dealerships as a home-field advantage.

Plus, dealerships have a built-in customer base, and those customers are more loyal to the brand. The customer’s dealership experience often changes once the warranty expires. A great deal of service manager training could help customers understand why.

Independent shops will do whatever they can to resolve your issues. One of the key conditions is that if your vehicle has an issue that should be seen by the dealer, the shop will tell you. Great customer service and communication skills are essential at a dealership and independent shops

Let’s figure out what causes dealerships to lose customers to independent shops.

Five Reasons Why Dealerships lose their Customers

The “Make an Appointment” Process

The first issue is setting the appointment. There are times where the customer will show up to their dealer without an appointment, and experience long hours, waiting for service. Not to mention the time you will spend after the service even starts! 

You often can’t wait days, or even weeks, for work to be done on your vehicle. And yet if you’re at the mercy of the dealership, you might have to. Local independent shops tend to have more flexibility and availability in their hours. Some even have more weekend and evening availability, making it easy for those who work and have families and events throughout the week.

Valued Perception

A lot of times independent shops have a higher, effective labor rate and a higher gross profit percentage of parts. Dealerships perceive that it’s because of the price. The dealerships are lower on price, but they’re still losing to the independents who have a higher margin. 

“The reason is not the price. It’s the value perceived of the price because we think that we’re selling oil changes and we’re selling emotions.” 

Customers need to feel like people, and should understand that we genuinely care about them. Independent shops will greet you by name and treat you like a close friend, not just another car in the service line. 

The Priority Of Servicing Customers

“In a car dealership, the service in parts departments are afterthoughts. The only business independent shops are in is servicing customers.”

In a dealership, most of the time, the service department can depend on warranty. The customers will come either way. That’s not the only business, it’s an afterthought. 

However, at independent shops, there’s more ownership and a lot more genuine care for the customers.They don’t have the other streams of income. Service manager training will guide you on how to effectively communicate with your customers. 

In a dealership, there are other streams of income: new car sales, used cars, finance, insurance and extended warranties. Independent shops are all about their parts and service. Customers are the business.

Parts is a One-Trick Pony

You’re more likely to have a better dealership experience when you’re looking for assistance with a recall or warranty issue. They’re helpful for car sales. However, they’re not always the best place to take your car.

With our issue of supply chains, dealerships would rather give a customer a loan car for a month, to avoid them going somewhere else for parts. Most of the time, an independent shop will have many different options for customers, and ways to source parts. 

Independent Shops are Masters of Advertising and Marketing

Independent shops differ in ways that a dealership doesn’t experience often. Dealerships have a built-in customer base. Marketing is not their key focus, as customers have to come there for warranty. 

Service managers will also help provide data from customer insights in order to figure how to market the shop. Making sure your team is motivated and ready to perform an effective customer service strategy.

“When you think about marketing, you think about how expensive it is to get and keep a customer. It’ll help you put more care into the customer also.”

Independent shops work 10 times harder to get customers than dealerships do to keep their customers. They use up to 8% of their annual revenue on marketing.

In Conclusion

As we were making this list, we are assuming guilt also. We’re a part of this industry too so we understand. However, the truth is the truth. Whether it hurts to know this or not, we have to use this information to help better ourselves. We can use these steps to better our dealerships and independent shops.