An Aftersales Strategy To Build (y)our Business Mark Squires
An Aftersales Strategy To Build (y)Our Business Mark Squires Chief Executive Benfield Motor Group
Crazy Economics Problems with the Franchise Dealer...
An Aftersales Strategy To Build (y)Our Business Mark Squires Chief Executive Benfield Motor Group
Crazy Economics Problems with the Franchise Dealer Offer
Failure of Marketing
Key Market Trends
RETAIL SMR MARKET VALUE 1987-2013
Source: Castrol Trend Tracker
Market Background • • • •
Absorption 56.5% Labour GP% stable at c. 76% and Parts GP% stable at c. 22% 23.6% fall in 0-4 year old licensed cars between 2004 and 2012 Franchised dealer SMR real revenues: – fell 10% 2007 – 2011 – rose 3% 2011 – 2013 – Independents up 4% 2011 – 2013
• Dealer average invoice value - ? • SMR transactions which include MOT and/or tyres: – All – Independents – Franchised dealers
53% 77% 15%
• Independent outlets outnumber franchised dealer outlets by 3.5 to 1 Sources: Castrol Trend Tracker; ASE
Crazy Economics i. ‘Free’ vehicle health checks ii. Service plan economics
Crazy Economics i. ‘Free’ vehicle health checks ii. Service plan economics iii. Who controls Pricing?
Price gap between franchised dealers and independents is closing
Source: Warranty Direct
2006
83%
2014
44.9%
Crazy Economics i. ‘Free’ vehicle health checks ii. Service plan economics iii. Who controls Pricing? iv. Service interval confusion v. Price match folly (& discount control) vi. Courtesy car conundrum
Business Class for Ryanair Prices
Problems with the Franchised Dealer Offer
VFM =
Q P
Customers are seeking … … right first time, on time, every time … trust … convenience
The difference in quality…
Failure of Marketing
Competitor Marketing
Servicing Stop
Halfords
Halfords
Asda
Asda
Targeting Segment
Issues
Action
0 - 3 yo
3rd year retention issue – 60% retention; 15% not serviced; 3 ̃ 0% changed vehicle; extended service interval distortion
Defend
3 – 6 yo
Weaker retention. Direct competition with Strong, targeted Independents & Nationals. Strong enough proposition to retain pitch to own customers? Mitigate defection Independent Loyalists.
6 – 10 yo
Small proportion of used cars sold by Franchised Dlrs ( 1 ̃ 5% of used car mix)
Low priority
Franchise Dealer Marketing
Arnold Clark
Arnold Clark
Out of warranty pricing example
NFDA Standards • Used Car standards
• Aftersales standards
The Trusted Dealers 10 Points of Difference With the increasing sophistication of today’s vehicles it is paramount that your technician has been trained by the people who make the cars. Our specialist expertise will often prevent faults from becoming breakdowns and speed up any diagnosis and repairs required.
You will find franchised dealers offer much better value for money these days. We won't always be the cheapest, but actions such as re-aligned parts pricing, budget parts lines with many brands, simple menu pricing for regular servicing and regular wear & tear items such as brakes & tyres, and service plans to help you budget mean we offer surprisingly good value for money, especially when you take into account our expertise and the extra services we offer. We also promise that the prices we quote will be transparent with no hidden extras.
If ever a vehicle develops an inherent fault our manufacturer partners will let us know. The factory informs us directly of all safety recalls and helps us ensure your vehicle always roadworthy. Today's vehicles contain many electronic systems which are subject to software upgrades by the manufacturer from time to time. We have the access and technology to upgrade your vehicle when your car is serviced by us
It’s increasingly common for a car to be able to tell compatible diagnostic testing equipment what’s wrong with it or at least reveal the symptoms. This knowledge combined with manufacturer-supplied specialist tools means we are more able to quickly and effectively solve your mechanical problems than anyone else.
When it comes to selling your vehicle in the future, there’s nothing more reassuring than a fully stamped service book or its online equivalent. A fully maintained vehicle is also more likely to benefit from goodwill claims when out of the manufacturer’s standard terms of warranty.
Any work undertaken at a Trusted Dealer is subject to a 12 month parts and labour guarantee giving you peace of mind around your service or repair
Every Trusted Dealer is pleased to offer courtesy services such as vehicle collection and delivery, undertaking the work while you wait and loan cars. Most of our dealers now offer free WiFi access, as well as pretty good coffee and somewhere comfortable to sit. Wherever possible, we’ll also try to wash and vac your car to put a bit of sparkle into the job!
Every Trusted Dealer is pleased to offer courtesy services such as vehicle collection and delivery, undertaking the work while you wait and loan cars. Most of our dealers now offer free WiFi access, as well as pretty good coffee and somewhere comfortable to sit. Wherever possible, we’ll also try to wash and vac your car to put a bit of sparkle into the job!
We work to the most stringent standards concerning the quality of work, training and customer service in the industry with regular auditing by our manufacturer partners and the oversight of our trade body, the NFDA. It’s important that parts and lubricants meet the technical specification for your vehicle. Failure to do so can have unforeseen implications for wear and tear on your vehicle and create potentially expensive repairs in the future. As franchised dealers we carry a large cross section of genuine parts and are also able to order others direct from the factory, usually for next day delivery to reduce any inconvenience where a vehicle is awaiting parts.
Food for Thought 1. Shift the battleground away from Price. 2. Question the giveaway culture. Is it possible to put the genie back in the bottle? 3. Build Value, don't Buy Loyalty. 4. Develop and define a more intelligent and segmented proposition around Customer priorities - genuine expertise, genuine parts, trust & convenience. 5. Seize your digital territory - before someone else does. 6. Introduce Product Category Management. 7. Simplify Pricing. Blended Margins. 8. Give Aftersales Marketing the priority it demands.
