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Under guarantee: Now’s the time to be proactive

The last quarter of 2007 trading is now well upon us and most areas of trading have lived up to budgetary expectations.

However, there is recognition and fear of a changing wind with a downturn in both footfall and consequently vehicle sales, particularly in the used car sector.

In addition to a downturn in people visiting showrooms to buy vehicles, September saw a significant downturn in aftersales traffic with predictions that things are only going to worsen during the last quarter.

All of this brings fresh impetus to the ‘Retention is our future’ debate. Increasingly aftersales divisions within dealer groups are having to cope with the let’s make profit today culture which so commonly rears its head. The consequence of this culture sees products with little retention value being marketed and sold ahead of products such as warranty that present excellent retention values.

Clearly, from a commercial perspective profit today is an absolute prerequisite but this cannot be to the detriment of the dealer’s long-term viability. The future is very much in our own hands and yet again, I find myself saying that the time has come for the dealer networks to open their eyes to this gestating problem and become proactive instead of reactive – before it’s too late.

Warranty as a product still has value within the retail customer's eyes, and if it has value in their eyes then it has a price. If it has a price then it should deliver a front end profit today with the consequential benefits of delivering further customer touch points and income streams tomorrow.

Retention without question is absolutely pivotal to the future success of any franchised dealer; warranty without question provides a mutually beneficial tool to assist us in increasing the retention of customers.

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