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Honda dealers lead the market in retaining service customers

Honda’s franchised dealer and service network once again leads the way for retaining customers for routine servicing in the UK.  Honda has held the top spot for servicing retention since 2006.

The latest findings from the 2014 Castrol Professional Car Servicing & Repair Trend Tracker report, released today, show that 38% of all Honda owners surveyed for the latest Castrol Professional-sponsored report took their car back to a Honda franchised dealer for its most recent routine service.

This result is marginally lower than last year’s, when the Japanese brand recorded 40.3% servicing retention for cars of all ages.

Dealer networks for the three premium German brands also scored highly.

Mercedes-Benz managed an impressive 4.5 per cent point year-on-year increase to 37.8%, rising from fourth to second place, and overtaking Audi (35.3%) and BMW (32.3%).

Toyota completes the top five, retaining 29% of customers for routine servicing. The average for owners of cars of all makes is 24.8%.

At the bottom of the table are dealer networks for Renault (16%), Peugeot (19.4%) and Ford (19.7%).

For cars less than four years old, Honda still captures a high proportion of servicing work (67.7%), although it’s Mercedes-Benz that takes the lead, capturing 71.4%.

The average in the franchised sector for service retention of cars within this age range is 56.5%.

Trend Tracker analyst Chris Oakham said: “The type of customer plays a role in overall servicing retention. Among others, Mercedes-Benz, Honda and Toyota tend to attract a relatively mature and conservative customer base, which may be more likely to return to a franchised dealership for routine servicing than younger, more cost-conscious owners of other brands.”

David Cox, managing director of Cox Motor Group and Honda dealer council chairman, said: "This report really reflects the hard work that the Honda dealer network and Honda UK have jointly put in over the last few years.

"Many successful initiatives from Honda and huge focus on all aftersales areas from the dealers have kept customers coming back and the profit generation has been impressive."

The initiatvies include, he said, competitively priced servicing for older (three years plus) cars, tailor-made service plans to suit individual customer needs and three, four and five-year service plans.

Nigel Head, head of marketing, Castrol UK & Ireland, said: “This latest research highlights the broad spectrum of customer retention levels across manufacturer networks, and, more importantly, which marques have been able to drive year-on-year improvements.

"Many dealers already have the tools at their disposal to further improve customer retention, with customer offers and aftersales programmes tailored for budgets of all shapes and sizes, and cars of all ages.

"However, the key lies in consistent and targeted communication and customer engagement to shift deeply-entrenched consumer perceptions that franchised dealers are more expensive and therefore offer less value than other alternatives such as independents and fast-fits.

“Franchised workshops need to articulate, and repeatedly explain, the added value that they can offer over other outlets to shift consumer perception.

"In reality this is not a quick fix, and relies upon consistent execution across all of the consumer touchpoints – both before, during and after the maintenance/service work being undertaken.

"Ultimately, motorists are more likely to return to a dealership in the future if they’ve been treated well, feel that they’re getting the best possible value for money, and are left in no doubt as to what they’re paying for.”

The latest findings from the report also highlight a number of other franchised dealer networks successfully retaining high levels of servicing custom, though they are excluded from the final Trend Tracker rankings due to low sample sizes in relation to higher-volume manufacturers.

Kia, whose sample size has grown rapidly in recent years, retained 41.6% of all servicing custom, up from 35.3% recorded in last year’s report. This result is believed to be aided by its industry-leading seven-year warranty.

Mini’s ‘tlc’ service plan continues to help the brand capture a strong 38.6% of servicing work, while Suzuki successfully captures the highest proportion of routine servicing work among cars over 10 years old (15.6%, versus an all-marques average of 4.7%).

Oakham said: “While new car buyers are no longer legally tied to a franchised dealership for the sake of the manufacturer’s warranty, Kia demonstrates clearly that a longer warranty motivates owners to return to the dealership.

"Comprehensive service plans on new cars, such as Mini’s ‘tlc’ package, and extended warranties are increasingly popular with new car buyers with the trends suggesting they can enhance servicing retention for dealers.

“Many of the factors behind servicing retention are beyond the control of dealers, though the operational excellence of a franchised workshop can have a hugely positive influence on motorists. There is no single answer to the question of improving retention, but dealers are able to offer extended warranties and competitive service plans in order to drive aftersales footfall.”

There are a number of complex factors behind the variation between brands in retention of routine servicing custom, though one key reason is the reliability of the cars in question. 

Reliable cars tend to lead to less inconvenience and fewer unwelcome shocks when routine workshop visits are carried out.

“The enviable reliability record earned by many Japanese brands – and, increasingly, a longer-than-average manufacturer warranty – are great motivators for owners to return to the franchised workshop for routine servicing,” said Oakham.
“Premium brands are also able to command greater customer retention, in part due to the greater financial outlay required to purchase a vehicle in the first place: manufacturer-recommended servicing is seen by many owners and fleets as a way to protect a sizable investment.”

** Although every effort is made to ensure the consumer survey sample is representative of the UK car parc, the results for marques with smaller car parcs are often volatile year-on-year, and thus less accurate than the much larger samples of volume car manufacturers. This is because smaller samples, while representative in terms of numbers, cannot always be balanced in terms of characteristics such as models or ages of cars.

The consumer survey conducted to compile the Castrol Professional Car Servicing & and Repair Trend Tracker report 2014 asks 1,000 motorists every month, “Where did you last have your car serviced?” The report then breaks down servicing habits by marque or country of origin of the car owned; by the age of the car; and the type of service provider or source used for the last service.

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