Are you be­ing served?

Show­rooms and work­shops are bat­tle­grounds as car brands vie for the last word in cus­tomer loy­alty

Herald Sun - Motoring - - Cover Story - JOSHUA DOWL­ING NA­TIONAL MO­TOR­ING EDI­TOR joshua.dowl­ing@news.com.au

ARE you sit­ting down? Here’s some shock news. The car in­dus­try has re­alised cus­tomer ser­vice is the key to its fu­ture suc­cess and per­haps it hasn’t al­ways got it right in the past.

Scep­tics could say they’ve heard it all be­fore but this time we’re as­sured it’s dif­fer­ent.

Most of the big brands now ac­knowl­edge that th­ese days, apart from the de­sign of the ve­hi­cle and the badge on the nose, there’s not much to dis­tin­guish cars. Most new mod­els have sim­i­lar lev­els of safety equip­ment, crea­ture com­forts and fuel econ­omy, all for a sim­i­lar price — which is why cus­tomer ser­vice is the new bat­tle­ground.

The top 10 brands and most luxury mar­ques are in the mid­dle of over­haul­ing the way they treat cus­tomers be­fore, dur­ing and af­ter pur­chase, from the way you’re greeted at a show­room to how quickly a war­ranty claim is fixed.

Ford and Holden are fac­ing their largest re­struc­tures to date, given the com­ing clo­sure of the fac­to­ries that built their for­mer top-sell­ing mod­els.

“As the car mar­ket be­comes more frag­mented, and the big brands that used to dom­i­nate no longer dom­i­nate,” says Holden ex­ec­u­tive direc­tor of af­ter­sales Michael Fi­laz­zola, “more com­pa­nies are re­al­is­ing that when prod­ucts are very sim­i­lar ... a cus­tomer’s ex­pe­ri­ence is what dif­fer­en­ti­ates their loy­alty.”

Late last year Ford em­barked on a mul­ti­mil­lion-dollar

over­haul of its show­rooms — us­ing Ap­ple stores as the bench­mark. It took the un­prece­dented step of re­train­ing all sales staff at its 200 deal­ers na­tion­ally, dis­tribut­ing more than 1000 iPads for use by cus­tomers, and stream­lin­ing the ser­vice checkin process by email­ing own­ers a fixed quote be­fore they hand over the keys.

Ford deal­ers are also in the process of ap­point­ing a concierge to greet cus­tomers.

“I don’t want you to quote me say­ing (we’re) go­ing to put the cus­tomer first. To me that’s like dis­cov­er­ing your thumbs,” says new Ford Australia boss Graeme Whick­man.

“Peo­ple have ex­pec­ta­tions based on their ex­pe­ri­ence at a com­puter store and that has left an im­pres­sion on peo­ple’s minds and we’re go­ing to try to live up to that and ex­ceed that. We need to do a bet­ter job, we want to do a bet­ter job.”

Ford sales staff are be­ing schooled to take a gen­tler ap­proach rather than try­ing to crunch a deal.

Al­most ev­ery car brand has drive-away pric­ing on its web­site so buy­ers al­ready have a good idea what they’re up for be­fore they get to a deal­er­ship.

“Cus­tomer re­quire­ments and ex­pec­ta­tions are in a dif­fer­ent space now and we need to change with them,” says Whick­man.

As it strives for greater trans­parency, Ford is giv­ing buy­ers ac­cess to the same de­tailed data the car in­dus­try uses in­ter­nally when com­par­ing mod­els.

It’s a brave call. The data com­par­isons go into much more de­tail than what is typ­i­cally avail­able, for ex­am­ple whether a car has a full-size spare tyre or stan­dard rear-view cam­era.

It’s de­signed to lay each car bare to the cus­tomer, be­cause the com­pany knows the truth is only ever re­ally a click away.

Com­pli­cat­ing the in­dus­try

over­haul is the fact that all but a hand­ful of deal­er­ships are in­de­pen­dently owned. The maker has lit­tle con­trol over what hap­pens once a ve­hi­cle is off the truck and in the dealer’s hands.

To change this level of in­flu­ence on how an owner is treated, many car brands are rewrit­ing dealer agree­ments so that in­de­pen­dent cus­tomer ser­vice au­dits count to­wards the dealer’s bonus scheme.

In other words, if the deal­er­ship scores poorly for cus­tomer ser­vice, it pock­ets fewer bonuses.

As the in­dus­try clam­bers to over­haul cus­tomer ser­vice from the show­room to the work­shop, more than ever you’re go­ing to be asked to fill out “a quick sur­vey” af­ter you’ve bought a car or had it ser­viced.

Other out­lets have a long road ahead. A Mazda dealer re­cently quoted a Carsguide reader $500 for a rou­tine ser­vice on a CX-5 — this should have been $294, ac­cord­ing to the capped price ser­vic­ing scheme — and the cus­tomer didn’t know un­til they queried the cost with us.

At least one lead­ing brand is so con­cerned about over­charg­ing on capped price ser­vice deals that it is rewrit­ing agree­ments so a dealer’s en­tire an­nual bonus is voided if a sin­gle cus­tomer is over­charged.

At­tempt­ing to bill a cus­tomer an ex­tra $50 on a ser­vice could cost the dealer $2 mil­lion in in­cen­tives.

Capped price ser­vic­ing, in­tro­duced by Toy­ota in 2008 but since fol­lowed by the rest of the top 10 brands, was the start of the shift to mak­ing the deal­er­ship ex­pe­ri­ence eas­ier for cus­tomers. But, as Carsguide has re­ported, not all capped price ser­vic­ing deals are cre­ated equally.

Toy­ota, Holden and Hyundai are among the cheap­est, with ser­vice costs rang­ing from $600 to $800 over three years. Nis­san and Subaru are at the other end of the spec­trum, with ser­vic­ing costs in ex­cess of $2200 over the same pe­riod on cer­tain mod­els.

Many capped price ser­vice deals ex­pire just be­fore bigticket items are due to be re­placed, leav­ing the cus­tomer with a big bill af­ter years of price cer­tainty.

In­dus­try in­sid­ers say push­ing the dearer ser­vices out­side the capped pric­ing scheme is not an ac­ci­dent.

Lit­tle won­der the con­sumer watch­dog, the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion, has taken an ac­tive in­ter­est in ser­vice pric­ing.

The schemes that were de­signed to take the guess­work out of ser­vice costs have wan­dered a lit­tle off script at some deal­er­ships.

Deal­ers make most of their profit from parts and ser­vice (typ­i­cally more than 50 per cent, ac­cord­ing to in­dus­try an­a­lysts Deloitte), about 30 per cent from fi­nance and in­sur­ance, about 15 per cent from used cars, and only about 5 per cent from new car sales.

In some ser­vice cen­tre wait­ing ar­eas across Australia, tea, cof­fee and bis­cuits have been joined by raisin toast and muffins.

But is a spot of brekkie, free Wi-Fi, a loan car or shut­tle bus enough to take our minds off the bill? Time will tell.

Over­hauls: Gone are the greasy garages for Ford, main pic­ture, Holden, right, and Hyundai, top right

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