When is the last time you bought a DVD in a brick and mortar store? Can you recall the days of waiting a week in between television shows, instead of binging 12 episodes in a row? This ‘Netflix Effect’ has revolutionized the way people consume media. The nearly $20 billion company offers original programming, online streaming and on-demand content – completely transforming the media services industry as we know it. Because of this, today’s consumer is becoming increasingly interested in subscription-based services, and the concept is making its way into other industries, including automotive and, more specifically, the dealer service experience.
Vehicle subscription services are a relatively new way for consumers to access mobility services as an alternative to traditional car ownership. In this new subscription-based approach, customers pay a flat monthly fee to a manufacturer or third-party provider in return for on-demand access to several vehicle models. The fee covers insurance, maintenance and roadside assistance – and just like consumers’ subscriptions to movies or music – can be turned off or on at the click of a button.
These rapid changes in mobility and customer expectations can be overwhelming, so Syncron recently set out to understand how automotive customers view the dealer service experience today and what their expectations are for the future, surveying 500 vehicle owners across the U.S. and Europe. Below are five key takeaways from the new report that automotive manufacturers (and dealers) should know as they navigate this rapidly changing market landscape:
- Customers are satisfied with the dealer service experience as it stands today. Nearly 60 percent of vehicle owners indicated that they use their dealer for maintenance and repairs today, with more than 90 percent describing their most recent dealer service experience positively.
- Interest in subscription services is high, but awareness is low. More than 60 percent of survey respondents indicated that they are unfamiliar with vehicle subscriptions, however, 57 percent were very interested when presented with the concept.
- The benefits of subscription services could be worth the added cost. Around 60 percent of respondents indicated fixed monthly cost and included maintenance and repairs as the biggest advantages of vehicle subscription services, with more than 40 percent of respondents also indicating they would be willing to pay a premium price for a subscription-based model.
- Brand loyalty can change in an instant. More than 50 percent of survey respondents lack loyalty to a particular automotive brand when making final vehicle purchasing decisions, and 40 percent of vehicle owners indicated a poor dealer service experience would negatively impact their brand perception.
- Proactive maintenance will be a competitive differentiator. Nearly 75 percent of vehicle owners agreed that if a dealer had the exclusive ability to send a notification that a specific vehicle part was about to fail and could preemptively schedule the repair, they would be encouraged to use the dealer for service moving forward.
It’s not so much a matter of if, but when, customers will overwhelmingly demand subscription-based services. Auto manufacturers must begin equipping their dealers today to prepare for a proactive service model. This new research report aims to inspire and motivate auto manufacturers to do just this as they navigate today’s ever-changing customer expectations and prepare their businesses for the seismic shift to the subscription economy.
Download our new research report to learn more about how customers’ rising interest in the subscription economy is revolutionizing the automotive dealer service experience.