Although technology is revolutionising the automotive retail industry, car dealerships are still crucial touchpoints for both sales and service customers. Despite a drop in the average number of customer visits, most customers will rely on traditional dealers, especially in the decision-making phase of a vehicle purchase or the car servicing process, which is still very much an ‘offline’ necessity.
Yet today’s customers are more demanding than ever before. They have less time, more knowledge and are less tolerant about delays and bad service. If customers visiting car dealerships can’t park, have difficulty finding their way, experience delays or speak to a staff member with less knowledge than they have, their whole perception of the brand (not just the visit) will be tarnished. Unfortunately for dealerships, no matter how ‘exciting’, ‘futuristic’ or ‘seamless’ a customer journey is, a simple frustration, which a customer finds important and is ignored can be hugely damaging.
One such frustration that occurs at many dealerships is finding a customer parking space. Although some dealers are aware that customer parking is a problem, usually from voluntary customer satisfaction surveys, very little is being done about it. Without focused research, the root cause, extent and impact of parking problems can remain unclear. This means that solutions may not be obvious and the business case to motivate intervening action difficult to develop. Customers will continue to feel ignored, while dealers simply allow parking to correct itself each day as peak periods pass.
Why do customer parking problems really matter?
We recently carried out five days of research at a busy car dealership. We watched, measured and studied customer parking as well as other car movements and interviewed customers too. Almost all customers (95%) told us that parking was important to them with most (70%) saying they had not found parking easy. Almost all customers (92%) felt it had taken them longer to park than observed and many (38%) did not park in a customer designated space. Most (66%) told us that parking would influence their buying decision and we observed some customers even drive away.
In addition to having a negative impact on customer satisfaction and potential sales, parking also affected staff productivity and performance. We found at least £20K of additional cost was incurred by the high number (average 305 per day) of car movements. Over one quarter of moves were made by technicians thus impacting workshop productivity and performance. More inefficiencies were observed as staff made excessively long and avoidable walks to find and retrieve cars. Some cars were driven around the site looking for space. Studies at two very different dealership locations presented similar findings, but demonstrated that local constraints, circumstances and behaviours would create their own unique problems.
What causes parking problems at dealerships?
The root cause of parking problems is that dealership teams tend to focus on their own individual activities rather than the needs of the customer. There is a lack of shared understanding of how parking demand presents itself and no communication or management process to allocate spaces at peak times. Parking demand is complex and always changing. Interventions are unplanned and usually reactive and required regularly, especially during peak times and when large deliveries arrive. Official and unofficial rules develop, without considering space with the customer in mind. Sales (and staff) cars are left in customer spaces and the process for moving service cars at peak times is often too slow. Valet staff create their own system, increasing the number of unnecessary moves for technicians, who rely on the timely flow of vehicles. Dealership teams simply compete for space!
For customers visiting, the outcomes are nowhere to park, high congestion, blocked circulation routes, long walks to the entrance, difficulties manoeuvring and at worst the risk of a parking ticket.
What can I do to improve parking?
For busy dealerships, where customer parking is a big problem there are three options to consider:
- Increase available parking space
- Reduce demand on parking space; or
- Utilise existing parking space better
Procuring more space is the obvious answer but far too expensive. Reducing parking demand by moving operations off site and introducing more customer focused activities, such as home delivery, are worth considering, but would require staff time to move vehicles between different locations. The most effective and low cost option to explore would be using existing parking space better. We call this ‘Parking Flow Management’ (PFM).
How do I ‘do’ ‘Parking Flow Management’?
Start by understanding what is currently happening in terms of demand and supply. What kinds of activities are placing demand on the use of parking spaces and how is it being managed? We use observational tools and techniques to collect real data on the current situation and then communicate findings in a graphical way. We also track customers (and staff) and talk to them too, to gain a complete picture of why problems occur and possible solutions.
Once the current situation is fully understood, it’s important to quantify findings in monetary terms. This is achieved by measuring different types of ‘waste’ or activities customers would not be willing to pay for. Examples of waste could be customers waiting for a space to become available or the amount of time staff spend looking for and moving cars. Other waste is found by measuring utilisation and identifying unused space or space which is used in the wrong way.
With a detailed understanding of what is happening and what it’s costing we can then develop a model for better use of space supported by a robust business case. PFM is about unlocking free space, managing it and moving cars in the most efficient and effective way to satisfy the customer. This involves the formal zoning of all parking areas and a planned way of using each zone. Key to PFM is teamwork, a shared understanding of the cost of using parking spaces and an appreciation of the costs associated with car movements by different types of personnel.
Successful PFM is ultimately about changing behaviours and taking ownership. New staff responsibilities for planning and managing parking activities need to be developed, relevant KPI’s introduced and a plan of action for what to do when things go wrong agreed. This is not easy and should not be underestimated. We feel best results are achieved by introducing PFM as part of a broader ‘customer delight’ initiative, which looks at improving the customer journey from end-to-end, including directional signage, welcome points, waiting areas and service desks.
What are the benefits of improving parking?
If PFM is implemented as part of a broader programme focused on the overall customer journey experience, we would expect to see significant improvements in customer satisfaction as well as sales. Customers would find their parking experience easier and more enjoyable and would be less likely to abandon their visit due to lack of availability. Stronger relationships would develop between sales and service teams, with increased customer focus, resulting in more recommendations and sales referrals, leading to growth in renewals and more customer visits. Similar customer journey experience programmes in retail environments have seen sales increase by at least 5%.
Efficiency savings are likely to be more modest but easily identifiable. Though they are unlikely to raise much excitement savings should cover the costs of implementing and operating a PFM model and can be used as part of the business case for adopting PFM.
If you have any comments or insights about improving parking at dealerships, we’d love to hear from you.
Paul Purcell is the Managing Director of Konvergence, a field based research and consultancy group that uses observational research to solve real problems for real customers in real spaces – like parking!
If you would like Konvergence to help with your parking problem then please get in touch.