Better service or lower price?

Automologist, LILY, finally answers a pertinent customer service question by using Big Data.

Following my earlier article on How to use Big Data in the auto industry, let’s further explore if customer service is really more important than price. Of course, everyone wants top service at low prices but these two often exist at inverse proportions. It is thus important for auto service centre owners and operators to know which one of these that the customer prioritises.

We shall look at two categories of auto service centres: those without an online presence; and those with an online presence but lack focus.

Google conducted a study to discover the consumer’s preference in the auto aftermarket service and maintenance. The research period was between May to June 2013 with pools of 500 to 2,000 respondents from ages 18 to 44, from the USA. The study gathered qualitative data from online focus groups via videos, post, images and a series of hangout, and quantitative data via a survey poll.

If you are not from the USA, don’t think that this does not apply to you. Bear in mind that the internet has created a “de-borderisation” era and there are some common consumer behaviours across the world; unless your country has zero internet penetration at all, yet, if so, you would not be reading this article at all…

Back to the research. It indicated that 81% of car owners felt that quality service is more important than price; low prices for sub-standard quality saves money, but causes customers to spend more time and money in the long-run.

Unless auto aftermarket companies have bottomless coffers and can flood TV and radio, and clutter ads and billboards proclaiming their brands, many car owners actually cannot remember the service centre’s name. In the same survey, when car owners were asked, “what service chain comes to mind when you think of vehicle service?”, 59% of the respondents admitted that they couldn’t remember the centre’s name!

The respondents said that “they are all basically the same” or “it is somewhere across the street, I don’t remember what’s their name…” One out of three car owners will go to their family mechanic if it is a serious issue; otherwise, they will just pop into whichever centre that is convenient. If their ‘usual’ mechanic is very busy, they will simply engage another, even though the survey actually showed that 42% of respondents have a favourite mechanic/shop (see graph below).

There are actually 70,000,000 searches every month on Google on aftermarket services. I do not know the algorithm behind this, but Google has translated this into 525,000 customers a month and subsequently the referrals from this group will generate another 100,000 customers! Wow!
Another astounding statistic is that there are three hot search topics for video content. The downloads related to these three topics alone equals to ONE year of video content!
The statistics reminds us that having an ONLINE PRESENCE is VERY IMPORTANT for aftermarket service providers. There are a few types of car owners that will go online:
  • The Searcher – They will conduct online searches, read reviews, and compare prices between different websites.
  • The Routine Maintenance – They will search for the nearest, hence, most convenient shop.
  • The Do It For Me (DIFM) trying to Do It Yourself (DIY) – This consists of 43% of the population. They will search online to gauge the difficulty of the task before deciding whether to engage professional help or take it on themselves. In Asia, there may not be many who would DIY, but we might be moving towards this culture as consumers are getting more knowledgeable and educated, and labour cost is escalating.
  • The Regular Service – This group of customers will mosey over to the next nearest shop if their regular centre is too busy for them.
  • The Stranded Car Owner – When their car breaks down, they will search the internet to find the nearest mechanic available.
  • The Advocate – These are a service centre’s advertisers! When they experience something good, they will recommend it to others, write online reviews and before you know it, their entire family will become the centre’s loyal customers.
The research also indicate that 73% of the Routine Maintenance customers will return to the same centre for subsequent major repairs, unless they had a bad experience.
The chart below implies that the DIFM group will still do the research like the DIY group does; 40% of car owners will search to find out how the repairs should be done before sending their cars in, therefore, mechanics, please do your work well, explain the problem and the solution to your customer, show them that “you know your stuff”; the customer is like an examiner in the examination hall!

“The examiner” will not just stop at your proposed solution; the research indicates that 62% of these drivers will research the mechanic’s recommendation via online video (8%), by checking with another shop (13%), by visiting the website of another shop (13%), by searching via phone/tablet (15%) or searching via computer (51%). The customer will be the examiner that writes the report card – one in four car drivers will post a review when they find a mechanic that provides great services.

In the event of a breakdown, customers will whip out their mobile devices and search for the following:

These Stranded Car Owners can become lifetime customers of a centre if they found it in times of need.

In conclusion, there are three pieces of nugget for service centre owners to bring home from Google’s research; they are (1) Car Owners are yours to be won (2) Differentiate yourself in the digital world (3) Don’t forget your presence across mobile devices.

We know “Big Data, Bigger Challenges”. My next article will expound data application in actual operations within a service centre, with some freebies for you to launch your online presence, if you do not yet have one.

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