James B. Treece
James B. Treece
News Editor

The selling power of proximity

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Often the best customers are those that are closest to the store. That's true for brick-and-mortar retailers, and for F&I managers, too.

I was reminded of that when I checked out a survey conducted in August of automotive-service customers by Morpace Inc., a market-research company in suburban Detroit.

The survey found that 73 percent of respondents took their vehicle in for service at the same dealership where they bought it vs. only 23 percent who took it to a different dealership. (Another 1 percent said they were unsure. Spouses?)

But why go back to that dealership?

The survey asked: "What are the primary reason(s) you selected the dealership you did for your vehicle's service needs?" The responses showed that customer care matters, but only so far.

"Prior service experience at this dealership" was the reason given by 38 percent of respondents while 30 percent cited "customer service of service department." The responses dropped to 22 percent for "special service offers or coupons" and to 15 percent for "customer service of sales department."

All those responses were far behind the 58 percent who said they chose which dealership to turn to for service because it was "close to home."

The takeaway for F&I managers is obvious: Check out your customer's home address.

If the customer lives fairly close to your dealership, the odds are better he or she will already be inclined to use your service department. That should make the sale of an extended service contract a better fit for those customers.

You can reach James B. Treece at jtreece@crain.com.

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