Dealership Courtesy Rides: Uber vs Shuttle, or Both?

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It's not unheard of in recent years for small, medium and large dealerships to abandon their internal shuttle services in favour of going with Uber or other taxi services instead. On the face of things, letting a ride-hailing taxi service like Uber take care of transporting customers or your staff to and from the dealership is an attractive proposition.

The dealership doesn't have the expense of buying, running and maintaining a fleet of its own vehicles, it doesn’t have to worry about fuel consumption, and it sub-contracts the bulk of the organization of transport to an outside source. 

Unfortunately, like with most things in life, convenience comes at a price. Outsourcing customer transportation to Uber or other taxi services may appear attractive on the face of things, but dealerships that have done it are starting to realize how much more expensive it can be than running their own shuttle service.

During our research, while developing the Hop-Drop shuttle & valet management software, we spoke to the fixed-operation manager of a large dealer group that had been using Uber instead of running its own shuttle service for over 2 years. The manager confirmed that using Uber had turned out to be a lot more costly in purely financial terms than the alternative of running a properly optimized internal shuttle service. In fact, we were told by the group that runs 8 dealerships that the: "Uber cost is killing us, and customers still complain about their rides" 

That cost isn’t going to reduce anytime soon either. The cost of using an Uber is heavily subsidized at the moment to try and fight off competition from the likes of Lyft, but that position can not be sustainable in the long-term, so costs of using the service are only going to increase.

While interviewing multiple dealerships as we were developing the Hop-Drop platform, we learned that many had never really bothered to accurately track the total cost of the shuttle service they were offering. The result was that the cost usually tended to get mixed with other administrative costs and therefore didn’t stand out as an area where considerable savings could be made. Because dealerships typically don’t track the overall cost of their shuttle operation separately, it would be easy to make the mistake of thinking using Uber or other taxi services such as Lyft instead of an internal shuttle service would be cheaper. 

There is an old saying of "out of sight – out of mind" which is probably applicable here when it comes to why some dealerships have adopted the Uber option over running their own internal shuttle system. Dealerships – especially service departments – have enough to worry about keeping customers happy. If they can take one headache out of the equation, such as customer transportation, surely that's a good thing, right?

Owning the Experience

Well, not necessarily. Look at it from the customer's point of view. When they make a booking for their vehicle to be serviced or fixed with a dealership, everything that happens from that point with the transaction will be seen by the customer as being the dealership's responsibility. A customer doesn’t care if some part of the experience is being taken care of by a subcontractor; it's all up to the dealership as far as they will be concerned.

If the taxi driver is late, it's the dealership's fault. If the driver of the vehicle that picks up or drops off the customer is rude, it's the dealership's fault. If a ride doesn’t turn up in a timely manner for the customer, it's still going to be the dealership's fault. If anything goes wrong, even if there is nothing the dealership could have done about it, it's the dealership's fault in the eyes of the customer, and rightly so.

The dealership is totally responsible for the whole customer experience, regardless of any mitigating circumstances, so why would a dealership risk their reputation in the hands of someone else? 

Some aspects of what a service department offers might need to be outsourced, such as painting and dent repairs if the dealership doesn’t have its own body shop. If opting for Uber over your own shuttle & valet service was massively cheaper for the dealership there might be a case to be made. However, when dealerships are finding that Uber works out to be considerably more expensive and it means putting their valuable reputation in the hands of another business and its employees, it doesn’t look like such a good idea after all.

Best of both worlds?

It would be inappropriate to suggest a dealership should shun something like Uber completely. Uber can be an extremely useful element of a flexible, integrated and optimized customer transportation system. Even if a dealership is running a tight ship with an efficient and highly organized internal shuttle & valet processes by using simple yet advanced solution like Hop-Drop, there will be times (hopefully) when ride demand will outstrip the supply of available shuttle drivers.

Drivers can be off sick, or shuttles can get caught up in traffic. None of that is a good look for a service centre, so having a backup plan in place would be the smart thing to do. Using Uber if and when required can be done anytime by anyone with an account and a smartphone, but the whole thing would be a lot more efficient and professional if Uber was integrated into the software used to run and monitor your internal shuttle & valet program. All that and much much more can be done with the Hop-Drop trip optimization platform.

Anyway, if you think about it in some detail, using Uber doesn’t allow a dealership to abdicate all aspects of customer transportation and its associated overhead costs in any case. The dealership will still need someone to coordinate pick-ups and drop-offs, and the dealership will still need to have drivers and vehicles for other tasks. 

When a shuttle service isn’t run as effectively and efficiently as it could be in a dealership, the obvious need to keep service customers happy can sometimes take valuable resources away from other areas of the dealership that can prove to be incredibly costly.

Anyone who has ever worked in a dealership will have seen service advisors having to leave their post to help with pick-ups or drop-offs in emergencies, which can then lead to a situation where incoming calls take longer to answer or don’t get answered at all. Saving that one customer could lead to losing another or more, which obviously isn’t good business.

The same thing can happen with the sales department. Sales representatives can be drafted to do pick-ups and drop-offs before, after, or during work hours. This can lead to them coming in late, leaving work early, or having to leave the lot or showroom during the working day. It doesn’t take a college degree in advanced calculus to work out that missing a vehicle sale because a salesperson has been drafted in as a driver is going to be a big loss to the dealership's bottom line.

Valet Vehicle Pick-up and Delivery to Win Back a Lost Customer

Just like insurance companies always appear to be more concerned with attracting new customers than retaining the ones they already have, a lot of car dealerships understandably put an incredible focus on getting new service customers through the door. Nobody in the auto industry needs to be told how hard it is and how expensive it is to find new customers, but how much time and investment is spent on keeping those customers once they've become a customer of the dealership?

Of course, attracting new customers and retaining existing customers can require different tactics, but there are plenty of things a dealership can do that will help with both. When it comes to the service department, customer service is everything. It really is the be-all and end-all as far as keeping existing customers loyal to the dealership is concerned, but a great reputation for delivering the very highest levels of customer service will also help to attract new business as well as allowing the service center to charge a higher rate.

While the sales side of the business can attract and keep customers by offering the best deals in the area, service departments are like an entirely different business and a more holistic approach is usually required. 

In this article, we're going to look at a scenario where a service department gets the chance to impress someone who has recently used the dealership for servicing but has been using another shop since the last time they used the dealership. This is an opportunity that needs to be seized upon by any dealer that gets the chance, and we're going to show how can help you impress a returning customer and keep them coming back to you in the future.

Lost Service Customer

The service department has been having a bit of a slow time lately, so the head of the department has decided to instigate a new initiative to try and identify previous customers who haven't used them for a while and to try and win back their business. Simply cold-calling, emailing or texting every lost customer might have some effect, but it's a time-consuming exercise that isn’t without cost and it definitely needs to be carefully targeted.

Some customers may have sold their vehicle and bought another brand and are now using the dealership they bought their new vehicle from. Some may have sold their vehicle and not replaced it, others may have moved out of the local area, but there's a good chance the majority of lost customers will have gone elsewhere due to one of two reasons; price or customer service.

This particular customer we are going to look at has been going somewhere else because they can get their serviced for less than they were paying at the dealership they had been using. The service advisors have identified the customer, they have their contact details on file, and their records show the former customer's car is probably due for its scheduled service.

The Service Manager’s Challenge

A lot of service managers will throw their hands up in the air and admit defeat at the very idea of trying to win back a customer who has started using another service center that's cheaper than they are. It's easy to admit defeat when you can’t compete on price, right? In purely dollars and cents terms, it's difficult – if not impossible – for a dealership to compete with a different business operating in a way that allows them to charge a much lower rate. However, they can only charge a lower rate for one reason, and that reason is that they don’t offer the same service.

It's very unusual for two businesses to offer consumers the exact same product but to charge vastly different prices. Although two garages might both offer to do a 60,000-mile service for a Ford F-150, what the customer actually gets as part of that 60k service could be vastly different at the two service centers.

Some people might think a 60k service for a certain car is the same wherever it's carried out, and as long as they get that stamp in the service book then the one offering the cheapest price will get the business. Of course, that's not the case at all, and if you are the dealership that's charging more than the competition you need to identify why you can't (and shouldn't try to) compete on price alone.

CSI Score and Competitive Advantage

There are many reasons why dealerships charge more for servicing and repairs than some of their local competitors, but most of the time the customer basically gets what they pay for. It's a dealer's job to understand what it is that sets them apart from the competition and take full advantage of the extra benefits they can offer.

Let's be brutally honest here for a moment before we go any further. Nobody actually likes getting their car, truck, SUV or van serviced or repaired, and they like paying for it even less. That's why most people will grab the chance to get it done for a cheaper price, but the one way a dealer can win back a lost customer without capitulating on price is to make the whole experience as smooth, easy, convenient and stress-free as possible for the customer.

When it comes to making a service booking as convenient for the customer as you can, getting their vehicle in for the work and back to them when it's finished as efficiently as possible is a big part of making them happy to pay a little more. It also helps with those all-important CSI scores too, and every service department and dealership knows just how crucial CSI scores are these days for many reasons.

CSI scores affect the profitability of the whole dealership because the manufacturer doesn't deal directly with the customer; they rely on dealers to do that for them. Low CSI scores as a result of poor customer feedback reflect badly on the brand, so manufacturers use CSI scores as a way of monitoring how a dealer is representing them and penalizes bad scores. 

A poor CSI performance can cost the dealer tens of thousands of dollars, and any customer on any day could even be a mystery shopper employed by the manufacturer to see for themselves the kind of service they're delivering.

Unfortunately, although getting the vehicle in and back with the customer as smoothly and efficiently as possible is a great opportunity to deliver great customer service and increase those CSI scores, it's also an area where things can irreparably go wrong and have the complete opposite effect to the one you want.

Servicing Mr. Walker Vehicle

Mr. Walker doesn’t actually exist and he, therefore, doesn’t really have a Ford F-150 or any other vehicle for that matter, but giving a name and a vehicle to our fictional example might help you to visualize our little scenario. Of course, if any real Mr. Walker is reading this who does happen to have a Ford F-150, we assure you our character is entirely fictional and any similarities with yourself are purely coincidental.

Dealership records show that Mr. Walker bought his Ford F-150 from the sales department as a one-year-old used car with 12,000 miles on the odometer three years ago. He brought it in for its second (24k-mile) service a year later, but he hasn’t been seen since. He may well have sold the car by now, but he might still have it, and if he does he must be getting it looked-after somewhere else.

Before a service advisor or the service manager contacts Mr. Walker to see if they can win back his business if he still has the car, it makes sense to review the records to see if there is anything that needs to be considered so they can tailor an offer that might convince him to give them another go.

The records show that Mr. Walker works office hours Monday to Friday at a job located more than 20 miles from his home, so he needs his car to get to and from work. Making sure he isn’t inconvenienced – or worst of all – him having to take time off work to get his car serviced – could be key here.

When the dealership contacts Mr. Walker, he confirms that he does still have the car, it is about to need its annual service, and he has been going to another shop because they are cheaper. When asked what service he gets from the other garage, he admits that the work on the car is all he gets. While there's a comfortable waiting area with coffee and free Wi-Fi, there's no shuttle or valet service, and he's not always guaranteed to get his car back the same day.

It's obvious to anyone that there's an opportunity to win Mr. Walker back here, so as well as a little discount on the usual price of a 60k service, the dealership tries to seal the deal by offering Mr’ Walker a courtesy valet vehicle pick-up and delivery service by sending someone to pick up the car from the customer's home and bring it in for repair then drive it back to the customer when repair is done. The dealership guarantees they will get the car in and back out the same day and make any arrangements necessary so Mr. Walker isn’t inconvenienced and he doesn't have to take any time off work to bring the car to the car in himself.

Mr. Walker agrees and an appointment is made for the following Tuesday. The dealership arranges for a valet driver to pick up Mr. Walker’s vehicle at 8:30 and brings it in for service. Mr. Walker likes this level of flexibility and the fact that no matter what, he'll be leaving work at the usual time and he'll be back in his own car soon afterward. Essentially, to win the customer back the dealership is giving the customer the convenience of having their car fixed without leaving their couch. 

What could possibly go wrong with vehicle pick-up and drop-off?

If this agreement is made between the front desk of the service department and the customer and details are then written down on bits of paper on a clipboard for others to action, there's any number of ways this could all go horribly wrong.

Who is available to make the run? How is that person going to get to the customer's home in the first place? In the shuttle vehicle or a loaner vehicle? Is the shuttle driver even available? Who is available to bring the car back to the customer after repair is done and When? How is that person going to get back to the dealership? How do we communicate about all this with the customer? What do you do when a customer's availability changes and you need to change the plan? You start chasing things. Your costs go up. You spent so much resources so the customer never leaves the couch, and yet the customer is not satisfied.

There are lots of ways things could get messed up and the newly won-back customer could be left high and dry without his car and an irreparable blow to the dealership's attempt to win him back for the long term. Even if you only have a very limited experience of service departments and customer service, you're sure to be able to imagine any number of ways it could come to pass that Mr. Walker might not end up getting the kind of customer service the dealership intended if there wasn't a system in place to make sure he did.

Solution: Valet Vehicle Pick-up Delivery Software

Just managing drivers, vehicles and their scheduling in a very small operation is challenging enough, especially when something goes wrong, which it often does. If you have a business where there's more than one vehicle to work on per day, delivering the kind of customer service you'd like to deliver and getting the kind of CSI scores you need requires help. That help can come in the shape of HopDrop valet software, which is a system that makes managing a valet service easy, flexible and efficient.

Type in the customer’s address, time preferences, and whether the customer needs a loaner then HopDrop proprietary dispatching technology will take care of the rest. HopDrop will scan the availability of valet drivers, shuttle drivers, and loaner vehicles to create the most optimal plan to prevent overbooking. The system then automatically communicates trip information to drivers in HopDrop App and to customers through SMS so everybody is kept in the loop. At the end of each trip capture rating, and feedback from customers to monitor service quality. The system shows you where your drivers are at any time and you can rearrange schedules or routes on-the-fly to cope with changing situations and circumstances. You can also include notes for drivers so they are aware of any special circumstances, such as the special needs of individual customers.

There are so many ways valet services can go wrong, but HopDrop is an affordable software solution that helps you deliver the kind of customer service that will improve the efficiency and profitability of your business, as well as those all-important CSI scores.