Are you being served?
Showrooms and workshops are battlegrounds as car brands vie for the last word in customer loyalty
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