How to boost aftersales profitabilty in 2009.

How to boost aftersales profitabilty in 2009.

The article below was first published on the motortrader.com website earlier this month and highlights issues that we at motortradesolutions.net are seeing in the areas of the automotive industry that we cover. Read on to the end as if you are facing similar difficulties in your aftersales operation motortradesolutions.net may have the remedy.

Independents more flexible than franchised sites in recession.
Friday, 03 July 2009 motortrader.com

Independent garages have generally adopted faster to the recession than franchise dealers, according to research by Network Automotive, the motor industry consultancy. According to Network independents have led the way in reducing headcount where necessary, responding to changing customer needs and adopting new marketing strategies.

"Independents tend to be smaller businesses with centralised management, so it's no surprise that they have been able to react to the tougher economic conditions faster," managing director Colin Bruder said: "In contrast franchise dealers are larger with more complex management structures and have the added complication of manufacturer involvement. It takes more time to bring about change."

Customers haggling on price
Bruder said an emerging trend is that customers are now more likely to haggle over the price of servicing jobs.

"For all kinds of work, customers now want to haggle over the price. If you quote £200 for a service, they might counter with £180 and you arrive at £190 as an agreed figure. "Independents can handle this kind of thing easily - often the owner is very hands-on and may even be taking the booking. For franchise dealers, though, this has been more difficult to deal with. Service managers often have their hands tied by menu pricing and do not have the power to negotiate on price. Some have lost business because of this inflexibility."

Bruder said independents have also been more aggressive on marketing price cuts on used cars than franchised sites. Ends.

Whilst it’s true that independent and privately owned business can adapt quicker than say a large PLC operation it is true to say that you have to understand the plight of the aftersales manager these days.

For too long the parts and service departments have propped-up the accounts of most franchised dealerships and in today’s marketplace the sales department is making even less contribution to the overall picture, so the managers of the aftersales department are feeling the heat. However he/she is probably running a leaner service and parts operation than before with less resource front-of-house. In the midst of this, the labour margins are under pressure because customers are ‘shopping around’.

So what does an aftersales manager do? Let the business walk?

Well there are several elements to this, first of all are the service advisors ‘selling’ the benefits of going to a franchised dealer? The answer is probably not, because they are under severe time constraints and when was the last time they were trained or coached on handling objections? I guess that it if ever happened before, it has not happened for some time.

In some ways they may even be glad not to get the booking because it only adds to the pressure they find themselves under.

If you let the business walk you are potentially never going to see them again (even when things get better) and worst of all you are almost certainly watching the next car sale for your dealership walk out the door too.

So now the Aftersales Manager is now asked by their boss what he/she is going to do to increase business and profitability, because the dealership “needs it”. Often they are asked how they are going to market their department – and when are they going to find any time to do that!?

Well help is at hand, because motortradesolutions.net is owned and operated by leading motor industry professionals who understand the pressures that you find yourself under, but are also dedicated to helping you succeed.

They have developed a suite of products and methods that give you the tools to generate increased service department traffic and help you capture the drivers of older vehicles. Sales training for service advisors is also part of the portfolio and motortradesolutions.net also have some added value products which can be used to generate incremental profit whilst also providing an outstanding value service to your customers.

And finally, are you selling all the parts and accessories that you could? Do you have some ageing or obsolete parts stock that you’d like to get off your inventory? Would you like a 24 hour online shop that’s easy to manage and operate? We can help with that too.

Motor Trade Solutions are able to help any size of business from independent retailers and traders to large dealer groups and Plc operations. For further information visit our website or to discuss your requirements please contact us or just call our team for an initial discussion on 0845 658 6880 and start making an impact on your business.