How franchised dealers can win back oil change customers from independents

By Debbie Kirlew

A recent Trend Tracker report makes scary reading for franchised dealers – more than 30% of motorists with vehicles aged 0-4-years take their cars to the independents for oil changes and top-ups.

Cheaper prices, convenience, easy-to-find information on websites and, of course, longer service intervals – all are among the reasons motorists give for turning their back on the franchised sector when it comes to oil.

According to the Castrol Professional data in the report, 31.9% of oil changes (excluding top-ups) among the 0-4-year vehicle age group took place in the independent sector, which now captures 68%* of the entire oil change market. Although this coincides with a decline in the total number of oil changes in the UK – 70.3% of drivers in 2005 had an oil change carried out on their cars, but in 2011 this had fallen to just 59.7%.

Research from Mobil 1, however, suggests the existence of an oil change market ripe for the picking.

Of 1,000 UK drivers**, one in five (19.4%) check their engine oil when an instrument panel warning sign has already activated, by which time engine damage can already be caused. Almost two-thirds (60.2%) changed their oil once a year at most, while 8.6% hadn’t changed their vehicle oil in two years and 45.7% had no idea of their vehicle manufacturer’s recommended oil change intervals.

Chris Sturgess, chairman of the Sturgess Motor Company, which operates several franchises in and around Leicester including Kia, Jaguar, Volvo, Land Rover and Hyundai, said: “Dealers do need to educate customers on the use of good quality oil and the reason we have a certain oil partner. As far as the customer is concerned, oil is oil. They don’t understand or feel any inclination to understand the qualities of a high-tech oil compared to a cheaper version.”

However, Sturgess, along with most dealers, accepts that educating the customer on the merits of premium oil will not stem the migration of motorists to the independent sector.

“People will continue to defect from the franchised sector because, rightly or wrongly, they perceive to be better value for money, especially when cars become older.

“The franchised sector needs to be selling a much better ‘value’ message. We eat, sleep and breathe the brand we represent and we need to be telling our customers we are the brand experts. After all, it is to us the independents turn when they have a problem with a certain make or model of car they can’t fix.”

Marc Smith, general manager of Total Lubricants, said dealers must carefully consider how health checks and upsells are approached, because, if done poorly, they can drive a customer away. However, correctly presenting the benefits can show customers that a franchised service is not about being the cheapest, but the highest quality.

As well as generating leads and customer data for dealer partners, Total Lubricants offers tools such as calculators, which service advisers can use to show customers the longer-term savings of using a premium oil, typically a 3.5% improvement in fuel economy. For a customer spending £75 a week on fuel, it will equate to an annual saving of £136.50. “It’s about creating value for yourselves and showing value to the customer,” Smith added.