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The New Rules of Service Customers Expect Today | NY Auto Forum · Auto Collabs

• 0:00
  All right, I am standing here with Stuart Strope, VP of customer service- Success... success, success, uh, with J.D. Power here at the New York Auto Forum hosted by J.D. Power and NADA.
• 0:13
  I wanna thank our friends at Force Marketing for allowing us to come hang out and have these great conversations.
• 0:18
  We were talking just before, and I got so excited 'cause you were like, "Look, we're gonna talk about service today."
• 0:24
  And this is such a passion for me because I think that it's everything about continuing to keep customers, uh, in the loop.
• 0:32
  Um, where, where's the data pointing to for dealers that are thinking about, "How do I maintain my customer database?" Yeah.
• 0:40
  We've got some really interesting new data to that effect in our customer service net study that we d- we just released a, you know, a big annual update on that. Right.
• 0:50
  And as you would expect, Kyle, you guys talk about it all the time, that there's, you know, it's not necessarily a new thing, but it's certainly an increasing emphasis in terms of customers expecting transparency i- in the process, right?
• 1:03
  Sales, definitely service alike.
• 1:06
  So what we're seeing around that is, uh, an increase in the percentage of these customers who are getting photo, video evidence around recommended service from their dealers, which is great. They love it. The- Yeah...
• 1:18
  satisfaction scores are 50 points higher, you know, when that happens. Goodness. But it's still only about 44% of premium customers are getting it, only about 26% of mass-market customers. Interesting.
• 1:31
  So those numbers are way up over the last four or five years, but still, in absolute terms, less than half the market. Well- So still a huge opportunity for a lot of stores.
• 1:41
  I think it's interesting because you think of companies, uh, that kinda came out with these photo and video tools really in the, like, th- 2013, 2014, was some of the earliest versions of them for the service department.
• 1:53
  Yeah. And so we're what? 12 years beyond that and still only seeing those percentages. Right. We talk about this a lot, that, that as a technology begins to get scale- Yeah...
• 2:04
  consumers have a different level of demand on that. It's the table stakes for the industry today. Exactly.
• 2:09
  And it seems like at 40 per- 40-plus percent in premium and the 20-plus percent at, at, at mid-market brands, you're s- you're getting to that tipping scale point- Yeah, yeah...
• 2:18
  and it creates a new level of table stakes. How are you encouraging dealers to kind of, like, meet the demand of those table stakes? Yeah. I mean, first of all, we're trying to show them that, that fact, right?
• 2:29
  That this is becoming more of, like, cost of entry, something people are looking for. You know, obviously, customers now are more tech-savvy, more equipped with information than they've ever been.
• 2:42
  They absolutely are looking for these types of, of tactics, you know, and ways of communicating.
• 2:48
  Uh, so you know, right off the bat, it's just about highlighting that, that opportunity that we see and i- in turn, kinda highlighting how, you know, at those numbers, to your point, it's becoming table stakes. Right.
• 2:59
  But we've still got half the market where it's not happening, so there's still opportunity for some dealers out there to really differentiate by doing this in their market.
• 3:06
  You can still almost be an early adopter, depending on the market especially, right? Exactly. Yeah.
• 3:10
  So, uh, you know, the other, the other piece of this, the, the consumer demand table stakes, uh, is, is from, you were talking to me about these direct-to-consumer brands, the Teslas, the Rivians, uh, that are, that because they don't have the dealership network, are creating another layer of table stakes for us.
• 3:28
  What's happening in those lanes? Yeah. That's been kind of fascinating to watch play out. Uh, we've got an increasing number of these D to...
• 3:36
  You know, former D2C customers, almost all Tesla customers at this point, who are trading those vehicles in now and coming back into franchise brands.
• 3:47
  Now, you know, what's happening with that dynamic is they're coming back into, I guess, what you would call a traditional service type of, of model.
• 3:55
  What's interesting is we are seeing lower satisfaction scores from that group of customers. Interesting. Yeah.
• 4:01
  And a lot of that relates to their perspective on the facility, which, given the fact that, you know, 32% of Tesla service events actually aren't in the facility, they're- Right...
• 4:12
  they're mobile, versus about 3% on the industry at large. Probably just having to go to the store in the first place is, is, is causing- Is a friction point. Yeah... some of that dis- It's a point of friction.
• 4:23
  So interesting challenge, interesting opportunity.
• 4:26
  We're gonna have more and more of these D2C traders coming in, figuring out ways to kind of adapt the different options that we make available to them to turn that story around, turn 'em into advocates versus people who are, are kinda at this point being a little bit less satisfied with the experience.
• 4:41
  Yeah. Well, and, uh, you even think, if you haven't been to a Tesla store or the shop, uh, even not that 32% that are getting the mobile service, when you go to these places, they are dialed in. They're customer-centric.
• 4:53
  The, the, the, the welcome is a lot different experience than a lot of the, the, the retail stores that I've been to at least. True. Yeah.
• 4:59
  And so you're, you're, you're pressed up against the demand f- for customer experience on both sides, right? Absolutely. Yeah. That's... Yeah.
• 5:06
  The, the, the other thing that, that is, is constantly in the market is where are people going for that first one, two, three services?
• 5:15
  And we, we talk a lot in the industry about the third parties, the independents- Sure... the, the Jiffy Lubes, the Valvolines, but there's another dynamic entering the market because of the demand for location, right?
• 5:28
  Absolutely, right. Convenience is king.
• 5:31
  And kinda what we're seeing in the data is we've got about one in four service customers within that first critical three years of ownership that are actually getting their service somewhere other than where they bought the vehicle.
• 5:43
  Okay. And a lot of that can be explained away by convenience, geography, right? That maybe they were gonna get a, a great deal on, on the, on the car, so they drove further away, get service more, more locally.
• 5:54
  But that's not always the case. About 20% of the time, it's for other reasons.
• 5:58
  There were some issues with the sales experience or the pre- prior service experience or something.And what we're seeing, and why that's kind of important, is those customers that are getting service other than at their selling dealer are, are posting lower satisfaction scores.
• 6:12
  They're paying a little bit more when it comes to customer pay, uh, scenarios. Yep. And the process execution is actually a little bit less- Interesting... in terms of the KPI.
• 6:23
  So yeah, it just seems like it's really highlighted an, a really interesting opportunity for dealers. If you can identify these customers who didn't buy there, in effect, they're kind of like conquest opportunities.
• 6:34
  Yeah. Lean into those people. I, I... You treat them as, like, VIPs. Yeah. Treat them better, not, not worse, if anything, right? I, I know a group, a dealership, Mohawk Chevrolet. They, they, they're out...
• 6:46
  Uh, uh, Andy Gelcher's on the GM Dealer Council. But they have this thing, they call it the plate swap challenge. Yes.
• 6:51
  And it, and it's not just fun for the customer, but it's, it's actually something that internally they can rally around, saying, "Look, hey, if that person has a different plate frame, there's an intensity around which, uh, uh, uh, at which we consider that customer a net new opportunity for our store."
• 7:07
  And you think about the net new opportunity on service and the cost of that versus the cost of acquiring a customer from conquest on, on sales is, is a totally different value proposition for a dealership. Great point.
• 7:18
  And then when we talk about that two, three service, service visit, and when we see retention rise by 30% because of a thir- three-time service visitor, now all of a sudden you've taken that cost of acquiring a customer all the way to the sales department, right?
• 7:31
  Absolutely. I mean, uh, to your point, the long-term financials on that, you know, the value, customer lifetime value in those scenarios, much more optimal.
• 7:40
  If, you know, once you've got that person on board, you can keep them in place there. The, the numbers, the numbers look fantastic, relatively speaking. What's the outlook for the next year?
• 7:49
  What type of data or what type of things are you encouraging customer, uh, uh, dealers as the next year unfolds? And we've got some dynamics in used EVs coming into the market.
• 7:59
  We, uh, on the sales side, uh, we're starting to, to, to look at much m- many more people look at mobile service, um, as an option because of technology available. Yeah. Where are you pointing this, the skis?
• 8:10
  Yeah, I mean, one thing we're actively doing at J.D.
• 8:13
  Power is trying to work with our clients to help connect all the data together with them, for them, so that they've got a more holistic view on the overall ownership experience, right?
• 8:25
  It's like, I think historically our industry has looked at something like product quality as just being over here.
• 8:32
  You know, only the engineers and, and the product planners potentially want to look at this, and then we're going to look at this experiential data over here. Only the retail teams are going to want to look at that.
• 8:42
  Those things, customers don't do that. Reality is they're tightly coupled, right? Yeah.
• 8:46
  They're very tightly connected, and they, they both absolutely influence the, the customer's overall perspective on whether or not they're going to buy from that brand again, go to that dealer again.
• 8:56
  So we're trying to really break down those, those silos and connect these data sets way more than I, I think the industry has historically. And it's, it's already turning up some interesting things, for sure. I love it.
• 9:08
  I think that, that, that, that the world of AI, the, the context models that are out there, the big data that we're starting to realize is, is much more interconnected than we normally had it. Absolutely.
• 9:16
  It's a big deal. Absolutely. Thank you and J, J.D. Power for giving the industry that and- Thank you, Kyle... always great to have you on. Definitely. Always. All right.