How to drive trust by taking care of customers: A Roadmap for Success in the Oil-Change Industry
By Ramon Portilla , Founder of HumanX Insights and Vidyanand Krishnan , Founder of Innovin Labs .
The landscape:
In 2023, as the inflation rate for used cars surged over 35% and new cars increased by 22% compared to pre-pandemic prices, it became evident that car ownership remains a cornerstone of American life. Statista reports that nearly two-thirds of Americans value owning a car, highlighting the significance of this asset in our society.
Yet, with car ownership comes a slew of expenses.
The American Automobile Association (AAA) estimates that car maintenance costs alone for an average American fluctuate around $800 annually, not including insurance, license, registration, and taxes. ?Moreover, one in three drivers struggles to afford unexpected repairs, leading to delays in routine maintenance for approximately 8% of drivers!
Among the essential maintenance tasks recommended by the industry to protect car value and reduce long-term maintenance expenses, oil changes reign supreme. The oil change service industry in the US alone generates a staggering $11 billion annually, employing over 70,000 people across nearly 30,000 locations (IBIS World).
The Customer Experience reality:
However, despite the industry's pivotal role in safeguarding customers' investments, there's room for improvement in delivering exceptional customer experiences. According to J.D.Power's 2023 Aftermarket Service Index Study?, overall satisfaction in automotive services, particularly quick oil changes, has declined. Leonard Martin from J.D.Power emphasizes the importance of aftermarket service facilities enhancing customer loyalty by prioritizing ease of doing business.
The J.D.Power report indicates a significant drop in satisfaction across the industry segments, with quick oil changes experiencing an 18-point decline, followed by full-service maintenance and repair with a 7-point decrease, and the tire replacement segment falling by 6 points. This decline underscores the urgent need for the industry to refocus its efforts on improving customer satisfaction and loyalty.
Beyond statistics, there's an emotional bond between individuals and their vehicles, as cars encapsulate cherished memories and experiences. We were just reminded about this bond in the Chevrolet Holiday 2024 TV campaign, one of the most emotional advertisements we have seen. Recognizing this, it's imperative for the oil-change industry to prioritize customer experience (#CX) and the role their employees play to regain its significance and standards.
So, how can the industry revitalize its approach to CX? Like any retail business, it begins with understanding customer needs and pain points at each location, followed by analyzing trends across markets, regions and the entire fleet.
Leveraging immediate customer feedback:
Taking a hands-on approach, Vidyanand and I delved into customer feedback from Google Maps reviews, a valuable and actionable data source. With 90% of consumers reading online reviews and 88% trusting them as much as personal recommendations (BrightLocal), leveraging this feedback can substantially enhance loyalty and drive traffic, no pun intended!
Our analysis revealed and validated several key insights:
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A cost effective and actionable solution:
In response to our findings, Vidyanand and I developed the Minimum Viable Product (MVP) for a solution aimed at addressing these challenges. This scorecard empowers front-line employees and unit managers in making immediate decisions to improve service, thus building customer trust and driving business.
Designed for a specific location, the snapshot gives managers a comparative analysis of its standing vs. the nearest competitor, the nearest competitor fleet, their Fleet Average, the Best in Market, and the Average Market.
?It also highlights the top strengths and key actions for improvement.
Tools like this help organizations drive a better “Human Experience.” By delivering better customer and employee experiences, you will achieve higher customer and employee retention – in other words, your most important goal: loyalty.
By embracing innovation, leveraging customer feedback, and fostering a customer-centric culture, oil-change providers can retain their relevance while cementing their position as leaders in the automotive service sector.
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