2:26 pm, December 12, 2024
Higher costs and the switch to electric vehicles means the business of aftersales has taken on a new level of importance, two leading industry figures have said.
Speaking on Car Dealer Live, Wessex Garages managing director Chris Wiseman and Jeremy Evans, CEO of Marketing Delivery, explained the increased challenges dealers are facing with their aftersales operations, and how having effective communication channels to customers is vital.
‘I think aftersales is more than important than ever to a dealership,’ Wiseman said in the video post at the top of this story.
‘Long gone are the days of dealers looking at absorbance of 100 or 80%. There are so many factors coming in which makes aftersales more important, but we really have to take a methodology of working harding but achieving a bit less.
‘Unfortunately, we are impacted by the cost of franchise – this is primarily what the problems is in absorbency – courtesy cars, customer expectations. And we’ve become really good at selling service plans, but then, of course, this impacts on what we can retain out of labour sales, and that’s not keeping pace with what we have to pay for technicians, recruitment and everything else.’
Wiseman heads up Wessex Garages – a very successful dealer group with numerous sites across the west of England and South Wales.
It hold franchises with Nissan, Kia, Hyundai and Mazda, as well as running an aftersales operation with Mitsubishi, and is therefore experiencing the challenges that many dealer groups are currently facing.
‘The cost base is significant at the moment and it’s only going up. We’re having to squeeze more and more out of the margin.
‘But you add onto this what ZEV Mandate is doing to the supply of cars and sales departments have become even more unpredictable and more susceptible to market change.
‘So, aftersales has always been the stability in a business, and I think it always will be but it’s got to change.’
The rise of electric vehicles is causing headaches for dealerships’ aftersales operations, too, believes Wiseman.
‘I’m not convinced that the headaches are any more than the problems we I’ve just mentioned, but certainly, when it comes to training, that’s an issue for us and OEMs. The problems we get with an EV are totally different – they’re not mechanical problems but software issues.
‘Longer term, the time between service intervals will have an impact – we’ll see longer gaps between services. We’ve got to be careful that we don’t just manufacture reasons for customers to come in to a dealership. We’ve got to put value around that.’
He added: ‘We’ve still got north of 35 million ICE cars running around on the roads at the minute, so there’s still plenty to go add our teeth into. So I don’t think that the full impact, even with the brands that we represent, has been seen just yet. But of course, that’s going to be a slow, gradual curve with the uptake of EVs as we progress over the next 10 years.’
In the video, Wiseman explained what the key is to keeping workshops busy – and that’s having a ‘robust’ process of communicating with database thanks to having a strong database, and making sure technicians are retained and upskilled.
‘Having that database is the lifeblood of a business like Wessex Garages,’ said Jeremy Evans, boss of automotive marketing software firm Marketing Delivery. ‘Keeping it clean and up to date is crucial.
‘I sat in on one of our reviews with Chris and his team a couple of months ago, and we talked about the number of calls being made to people who don’t own the car anymore. We looked at how we could help, how we could pick that up and look at dates with DVLA and the various different agencies that record that stuff, because we don’t want people in dealerships wasting time for only people who haven’t got a car anymore.
‘We don’t want to send emails out to people who don’t own the car or have had the MOT done elsewhere, because it just winds people up if they receive emails that are inaccurate or are not relevant to them because the dates held are wrong. So, we do as a lot of work on keeping that data up to date so that when we do send the comms it’s with accurate data.
‘That data revolves around things like, what type of vehicle is it? If we know the customer is driving an EV, then it’s maybe a different contact plan from the ICE car customer. We can segment that, we can look at the data, see what it says about that customer, and pick them up. That contact plan for an EV customer will be different to a contact plan for an ICE customer.’
Being clever with communication with customers can really help a dealership, too.
Contacting customers 60 days before a due date means they will be able to book a time that is convenient for them, for example, or combining service and MOT reminders with recall data can bring customers in through the door.
A combination of email, SMS and phone calls is an effective strategy for service reminders, says Evans, but having the right software that works for a particular’s dealers customer base is also vital.
Elsewhere in the interview, the conversation included how effective email and text messages can be, and adapting processes for better solutions. You can watch the full video at the top of this story.
