Inflation’s Impact on Service
- Higher vehicle prices, higher fuel costs. What does it mean for service?
- 3 tips for navigating inflation as an upcoming industry pressure.
Due to supply constraints and high demand, we’ve seen vehicle prices skyrocket over the last two years. And now we are also seeing other segments of the economy get hit with high inflation rates, none more dramatic than the energy sector.
As a very prominent example, look at the cost of fuel. What’s it like in your area? How much does it take to fill up your tank compared to a year ago? Either way, it’s at an all-time high across the nation.
What do these pressures surrounding inflation have to do with your dealership? I’d like to focus on the impact it has on service. Let’s set the stage:
Cars currently have a high ticket price, and due to this rising cost, consumers are holding onto their vehicles longer. That traditional timeframe of trading in at 100-120k miles isn’t the norm anymore. In fact, the average age of a vehicle on the road today is 12.2 years – the highest it’s ever been.
So as consumers take longer to trade-in their vehicle, they are more open to having that vehicle repaired. They simply want their vehicle to last. And with gas prices sky-high, they are also more willing to keep up with ongoing maintenance to improve gas mileage.
As inflation continues to be top of mind, consider the stress your consumers might be under. Focus on providing them an experience that far outweighs the service bill. Here are three tips for navigating this time of stretched budgets:
- Present service recommendations and options in a non-intrusive way
Put the power in your customers’ hands and let them select their desired services at a kiosk. Instead of interacting with an advisor and feeling pressured to purchase, which can be an unwelcomed feeling when costs are higher than normal, kiosks provide a passive presentation style. This hands-off presentation allows customers to make decisions on their own terms and at their own pace. They can review their options, including cost. Often, this transparency leads to talking themselves into spending more.
- Perform a thorough inspection
Higher transparency equals longer loyalty. When consumers are taking the time to spend money on their vehicle, especially at a time when costs are high, it’s a well thought out decision. Returning the favor with a detailed MPI encourages better relationships and builds long-term opportunities. The customer sees you have taken the time to truly inspect their vehicle’s condition, and they may be more willing to complete the repairs. And if any repairs are declined, they still present themselves as follow-up opportunities during their next visit or even in your marketing efforts.
- Build the estimate simultaneously
Not only should your inspection be carefully crafted, but there is opportunity to streamline and speed up the process when you include accurate and immediate pricing for every job you’re recommending as the MPI is completed. This eliminates the chance of misquoting. Customers will surely appreciate down to the penny quotes – no surprises later when they’ve already prepared their budget.
Despite increasing rates and prices, consumers still have necessities. Service on their vehicle is a great example; it simply can’t be ignored. So as inflation continues to make its mark on our lives, service departments may start feeling the pressure. Think about the ways you can streamline processes and improve customer experiences, before the storm takes over.