When service becomes a choice

It's the conventional wisdom of new car buyers; purchase the car and have it serviced for the duration of the warranty by either the dealer that sold it or a selling dealer closer to home. Then, once the warranty has expired, take it to a reputable non-franchise repairer that will do the job for a lower price.

More recently, dealers AND some of these non-franchise repairers have been losing business to companies that commit to providing a service in line with the manufacturer's recommendations for less than the dealers' service department will charge.

Toyota, a company with a dealer network that stands to lose a lot of business, launched Toyota Service Advantage last year (more here). The company's objective was to retain new car buyers as service department customers for the dealers. A dealer principal with a lot of service and parts customers is a happy chappy.

But the Toyota program only applies for the duration of the warranty. After that, it's back to the standard pricing schedule for servicing.

Wouldn't Toyota prefer to retain customers for the duration of their ownership of the car rather than just the duration of the warranty? Honda does...

The Carsales Network put that question to David Buttner, Toyota's Senior Executive Director for Sales and Marketing and he agreed that it's a small but elemental aspect of Toyota's on-going plans to increase the existing brand loyalty out there in the marketplace.

"It's a huge missed opportunity," he agreed, but Toyota seems to be waiting for customers to be hooked by the Toyota Service Advantage before extending the program beyond the standard warranty period.

"Toyota Service Advantage gives us more opportunity for dialogue...to talk to the customer," he said.

Buttner is of the view that dealerships (all privately owned in Toyota's case, unlike Subaru), need to "treat the service department like a shearing shed and not an abattoir".

Better to be fleeced than slaughtered, indeed.

Despite how that remark appears, Toyota is -- according to Buttner -- very supportive of the dealers and the dealers are similarly in broad agreement with Toyota's long-term goals.

"The dealer network is as important as the customer," Buttner tells us, "[they] have invested $100 million over the past three years". That money has been spent on maintaining a unified corporate approach to doing business; what is known within the company as "The Toyota Way".

Toyota reciprocates by employing dealer liaisons working out of regional offices right around Australia, to support the dealers.

It's the dealer network and Toyota's close relationship with the dealers that will lead to ultimate success -- or otherwise -- for the Toyota Service Advantage. And if successful, by which we mean Toyota retains the majority of service customers throughout the warranty period, then can it be too much to expect that the program's next goal will be customer retention beyond the warranty period?

Already, Buttner believes that the service program as it stands will spawn imitators from within the ranks of Toyota's competitors.

"We have no doubt we'll be followed," he says, "but it gives us an advantage right now".

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