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Car servicing is changing for the better


Car companies are bending over backwards to get you into their dealerships. Why has it taken this long?

Are you sitting down? The car industry has come to the realisation customer service is the key to its future success and perhaps – just perhaps – it hasn't always got it right in the past.

You're forgiven for being skeptical given we've heard it all before, but this time we're assured it's different.

Most of the big brands now acknowledge, apart from the design of the vehicle and the badge on the nose, there's not much that distinguishes cars these days.

Most new models have similar levels of safety equipment, creature comforts and fuel economy, all for a similar price – which is why customer service is the new battleground.

Every one of the Top 10 brands – and most of the big luxury marques – are in the middle of overhauling the way they treat customers before, during and after the car-buying experience, from the way you're greeted at a showroom, how easy it is to get your car serviced, or how quickly a warranty claim is fixed.

Ford and Holden are facing their largest restructure since they set up shop in Australia

To date, Ford and Holden have been the most vocal about their changes, but others are set to follow.

With the factories that once produced the majority of their sales closing within a couple of years, Ford and Holden are facing their largest restructure since they set up shop in Australia in the first half of last century.

"As the car market becomes more fragmented, and the big brands that used to dominate no longer dominate … more companies are realising that when products are very similar and there's no real big differentiator, a customer's experience is what differentiates their loyalty," says Michael Filazzola, Holden's executive director of aftersales.

Holden's director of customer experience Narelle Stack says raising customer service standards "is not new" but admits there is "a new level of focus" across the company and the dealer network.

Late last year Ford embarked on a multi-million-dollar overhaul of its showrooms – benchmarked on Apple stores.

Ford took the unprecedented step of retraining all sales staff at its 200 dealers nationally, distributing more than 1000 iPads for use by customers, and streamlining the service check-in process by emailing owners a fixed quote before they hand over the keys.

Ford dealers are also in the process of appointing a concierge to greet customers rather than thrust a brochure in their hands.

We need to do a better job, we want to do a better job

"I don't want you to quote me saying (we're) going to put the customer first. To me that's like discovering your thumbs," says Graeme Whickman, Ford Australia's new boss.

"(But) people have expectations based on their experience at a computer store and that has left an impression on people's minds and we're going to try to live up to that and exceed that. We need to do a better job, we want to do a better job."

Ford sales staff are apparently being retrained to take a gentler approach rather than trying to crunch a deal.

Because almost every car brand has drive-away pricing on its website (although it should be noted, some drive-away prices are more negotiable than others), buyers already have a good idea what they're up for before they get to a dealership.

"Customer requirements and expectations are in a different space now and we need to change with them," says Whickman.

As part of Ford's plan to be even more transparent, it is giving buyers access to the same detailed data the car industry uses internally when comparing models.

It's a brave call. The data comparisons go into much more detail than what is typically available, including differences such as whether a car has a full-size spare tyre, a space-saver spare, or a tyre inflator kit.

The data also distinguishes which cars have rear-view cameras, parking sensors – or none of the above.

It's designed to lay each car bare to the customer, because the company knows the truth is only ever really a click away.

However, for all its efforts at transparency, Ford will only let you look at this information on iPads at its dealerships, whereas Hyundai offers the exact same forensic "JATO" data on its public website.

Complicating the industry overhaul is the fact that all but a handful of dealerships across Australia are independently owned, and the brand they represent has little control over what happens once their car is unloaded off the truck and in the dealer's hands.

But many car companies have changed – or are about to change – their level of influence on how a customer is treated at a dealership. Many are rewriting dealer agreements so that independent customer service audits count towards the dealer's hidden bonus scheme.

In other words, if the dealership scores poorly for customer service, it pockets less of the incentive money dangled in front of it by the car company.

Get the thumbs up from customers during independent audits and customer surveys, and dealerships stand to earn big bonuses, which will go some way to covering their vast overheads.

Air-conditioned showrooms, marble flooring and all those service bays don't come cheap. And that's before the dealer has paid anyone a wage or covered the electricity bill.

Given that Australia is the most competitive car market in the world – more brands are represented here per vehicle sale than the US, the UK, Europe and Japan – the industry is now clambering to overhaul its customer service experience from the showroom to the workshop.

More than ever before you're going to be asked to fill out "a quick survey" after you've bought a car or had it serviced.

If our experience is anything to go by, some dealer staff will ask bluntly "please give us a good score", with a hint of desperation in their voice.

Other outlets have a long road ahead. A Mazda dealer recently quoted a CarsGuide reader $500 for a routine service on a Mazda CX-5 that should have been $294 according to the capped price servicing scheme.

The customer didn't know until they queried the cost with us, but the dealer was happy to overcharge until the error was pointed out.

Isolated examples like this will hopefully be stamped out in the near future.

Not all capped price servicing deals are created equally

At least one leading brand is so concerned about overcharging on capped price service deals that it is in the process of rewriting dealer agreements so the dealer's entire annual bonus is voided if a single customer is overcharged.

Attempting to bill a customer an extra $50 on a service could cost the dealer $2 million in incentives. That is not a misprint. That's how seriously it is taking the matter.

Capped price servicing, introduced by Toyota in 2008 but since followed by the rest of the Top 10 brands, was the start of the shift to making the dealership experience easier for customers.

But, as we've reported, not all capped price servicing deals are created equally.

Toyota, Holden and Hyundai are among the cheapest, with service costs ranging from a total of $600 to $800 over three years, while Nissan and Subaru are at the other end of the spectrum, with servicing costs in excess of $2200 over the same period on certain models.

Frustratingly, many capped price service deals expire just before the big ticket items are due to be replaced, leaving the customer with a massive bill after several years of price certainty.

We have it on good authority from dealers and car company insiders that pushing the dearer services outside the capped pricing scheme is not an accident.

Little wonder the consumer watchdog, the Australian Competition and Consumer Commission, has taken an active interest in service pricing.

The schemes that were designed to take the guesswork out of service costs has wandered a little off script at some dealerships.

That's because dealers make most of their profit from parts and service (typically more than 50 per cent, according to industry analysts Deloitte), about 30 per cent from finance and insurance, about 15 per cent from used cars, and only about 5 per cent from new car sales.

Is a smiling face as we walk into a dealership enough to make us buy one brand over another?

In service centre waiting areas across Australia, tea, coffee and biscuits have been joined by raisin toast and muffins at some dealerships. What's next: croissants? Lar-de-dar.

But is a spot of brekkie, free wifi, a loan car or a shuttle bus enough to take our mind off the bill and inspire us to keep coming back?

And is a smiling face as we walk into a dealership enough to make us buy one brand over another? Only time will tell.

But make no mistake: every one of the Top 10 sellers and all the big luxury brands are in the middle of overhauling their customer service experiences.

Here's hoping they mean it this time. Because then we'll all be happy.