The Customer Profile
For a year now, I have been asking who are you, and what are you going to be? The vehicle maintenance industry has separated into two different industries. On one side is the traditional quick lube, or as some say, the 10 minute or less service center. These shops focus on getting a customer in and out quickly. Car count is the No. 1 statistic management keeps a close eye on. The services of a quick lube have stayed consistent throughout the years with a simple philosophy — if the service can be performed in 10 minutes or less, then they will perform the service. Ask any quick lube operator what the No. 1 question is they get from their customers and they’ll say, “How long is this going to take?”
Quick lubes watch the clock and expect their point-of-sale systems to keep a stopwatch running from the time the vehicle pulls into the shop until the customer is cashed out. The traditional quick lube understands the adage that time is money, and every procedure they do, as well as every service they perform, has one goal — speed.
The oil change-plus, or quick maintenance sector, has another goal in mind, and the philosophy is also straightforward: Provide bumper-to-bumper service. The hope of our oil change-plus brethren is that they will be a one-stop shop for their clientele. Although they want to be efficient, complete automotive service is the goal, not how fast they can run the vehicle through the shop.
I will let someone else decide which method is better, but one thing I have discovered over the last year is there is room for everyone. I have also discovered both the quick lube and oil change-plus shops have one thing in common — the customer. I have had several opportunities during 2014 to have this conversation about who are the customers and what are their expectations? On several occasions I have been asked, “Have you ever written this down?” I have spent a considerable amount of time over the last six months doing some research on these customers of ours, and I have found some interesting trends that our customers have adopted as to what they want and what they will demand of us.
The last few months, this column has looked into the latest buzz phrase, the new normal. The new normal for our customer base has revealed itself in the 2014 National Oil and Lube News Operator Survey that was printed in the September issue.
According to the operator survey, our customers have proven that if we offer the products and the services, then they would prefer to buy them from us. Professionalism is the key to success in performing these services, and professionalism starts with training (more on this next month). In almost every category of services offered, consumers purchased more services in 2014 from our industry than in the past three years. Fuel related services, tire services, minor repair work, as well as fuel, air and cabin filters are among the most requested services. However, the No. 1 service our customers still want is to save time, aka, “How long is this going to take?”
What is the Customer Profile?
Never before has the oil and lube industry had to service such a diverse group of people. Training employees on how to approach and present the services and/or products to each group of the market may be a key to success. Each generation of customers has their own unique style of how they expect to be treated while in the shop. Like everything in our complicated world, there is a science behind how and why people decide to buy not to buy. The generation category they are in can be a clue as to how to train employees to communicate with them.
With the help of the Pew Research Center, a fact tank in Washington, D.C., and some of my own research, I have developed a customer profile that breaks down the different generations. Never before has our industry served such a diverse customer base, and knowing who they are and what they expect from us may help in our approach to providing better service.
The Silent Generation: Approximately 12 percent of the market is between 69 and 85 years old and has what the social science folks say are traditional values. Traditional values mean several things, but respect and courtesy are two important traits of this generation. “Please,” “Thank you,” “Mr.” and “Mrs.” are expected, and they will be turned off by anything else. Another unique quality of the senior class is they want to be looked in the eye while they are being spoken to or when they respond.
The Baby Boomers: Thirty-two percent of the market is between the ages of 49-68. This generation makes up the largest group of customers in our shops and has a quality of its own. This group is used to having things their way, and if they suspect they are being led to something that is not their idea, they will turn and run. They want choices, and they want to come to their own conclusions. Show them and tell them the information, and they will decide if they want the service or not. Interestingly, this segment of our society has accumulated more disposable income than any other group, but that does not mean they will just hand it over. These baby boomers grew up on “show and tell,” and it is still an effective way to communicate with them.
Generation X: Twenty-seven percent of the market is between 34 and 48 years old. This group has also been called the “sandwich generation,” and some would compare it to the middle-child syndrome. For the first time in our modern society, brand names do not have the same impact with this group. This segment is looking for comparable quality products at a cheaper price. Blame the big box stores, but Gen Xers are looking for price. If they perceive the quality of a product to be the same, they will choose price over brand name most of the time.
Millennials (also known as Generation Y): Twenty-seven percent of the market was born after 1980. In many ways, these “kids” are more like their grandparents (silent generation) than they are their parents (baby boomers). They will be the first generation since the American Revolution that will have fewer possessions than their parents. The Gen Y group seems to embrace the idea that less is more and bring a unique opinion to the market. In a nutshell, if it can be done with less or for less, then this group is for it. Vehicle longevity (11.4 years) can be attributed to this group because of the idea that as long as it starts and runs, they will continue to drive it.
What are the Growing Trends Our Customers are Going to Expect From Our Shops?
Vehicle manufacturers, as well as government mandates, continue to give us new opportunities — synthetic oils, TPMS, tire rotations and more frequent intervals of service, to name a few. The Corporate Average Fuel Economy standard (CAFE), an act of Congress in 1975 enacted to ward off the devastation of the OPEC oil embargo, continues to influence our industry. CAFE was and is an effort to lessen North America’s dependence on foreign oil. Most analysts have agreed that from a lessening of our dependency, the act has been successful. For shops, new fuel services — from complex carbon level analyzing systems to pour-in fuel system cleaners — have become services our customers are demanding from us.
Our customers have shown they prefer us to do their maintenance using our time-proven ideas of being quick, correct and honest. Consumers are keeping vehicles longer — 11.4 years, thanks in part to Generation Y. The longer they keep a car, the longer we get to service it and take the credit for keeping it running! The window of opportunity for our industry in the vehicle’s lifespan is three to eight years, with many industry indicators pointing toward nine- or 10-year-old vehicles. If you have not done so already, flag this group of vehicles in your point-of-sale systems so your staff will quickly realize an opportunity has pulled into the drive, and these customers are eager to do the maintenance required to keep their vehicles performing at an optimum level.
It seems whenever I have these conversations, the next question is, “Where is the industry going?” My answer is always, “Nowhere!” The oil and lube industry, both the quick lube and the oil change-plus, has become as much a part of the American fabric as the Internet. As discussed earlier, there is a place for all of us as Americans continue to drive further distances and for longer periods of time. These vehicles must be serviced. One of the more interesting points I discovered during my research is the driving habits of our youth, and by youth I refer to the 15- to 18-year-olds who are learning to drive. In most cases, when today’s youth are being taught how to care for their vehicle, the lesson is to pay attention to their “sticker” in the window. When they have issues or problems with their vehicle, the recommended solution is, “Go by the quick lube and let them take a look.”
An interesting fact of success is when you are successful, others want to do what you do. Dealerships, both new and used, as well as repair shops, have all ventured into our sector of providing oil and lube service.
The corporate world calls it “first to market.” As an industry, the quick lube model is still first. Others want what you have. Congratulations!
Join me next month as we tackle the new normal for customer expectations.
RAGAN HOLT is the quick lube advisor for National Oil & Lube News. He is available for consulting and training in the quick oil and lube industry. He can be contacted at: email@example.com