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Dealer principals increase micro management

Dealer principals are micro managing their businesses more in reaction to the volatile market, according to research by Castrol Professional.

Castrol Professional carried out 40 face-to-face interviews with a panel of dealer principals working at a variety of franchised sites, from solus operations to super group outlets, to gain a better understanding of life at the UK motor trade.

The findings show that many senior management figures are now micro-managing key areas of their business, for example by placing all invoices, no matter how small, under the microscope.

In response to the slump in new car sales, the vast majority of dealer principals have also shifted much more of their focus to the aftersales department as a means of maintaining or driving revenues.

According to the interviews, many dealers now have an intimate awareness of aftersales KPI data, such as workshop hours sold, efficiency and average invoice value, which dealer principals admitted were not previously regarded as such important indicators for the health of the business.”

Recent reductions in headcount, which were reported by many of the people interviewed on the panel, have also had an impact on dealership management structures.

Many lower- and medium-level managers now fulfil dual or expanded roles, for example having combined new and used sales, or service and parts management responsibility.

While redundancies are inevitably undesirable, some DPs report that the resulting management changes have helped them accelerate a move away from conventional compartmentalised business structures, thereby facilitating improvements in operational efficiency.

Adrian Brabazon, Castrol franchised workshop and OEM marketing Manager for UK & Ireland, said: “It is clear that the uncertain economic climate has led to a shift in emphasis from new car sales to aftersales.

“The need for franchised dealers to retain customers and fight for each and every piece of business has meant that many dealer principals are placing renewed focus on the resourcing of the service reception. More of them are evaluating whether service reception staff have the right skills to effectively sell work to the customer and employing new processes and systems to enable staff to follow up on deferred work.”

Brabazon said that even through dealers were focusing on running the business in “survival mode” many are already preparing for when the upturn comes.

He said: “For instance, some have been investing in new initiatives to safeguard service income, such as launching a new mobile technician service to diagnose faults on customer cars before they come into the dealership, to maximise workshop efficiency.

“The focus on improving aftersales processes, upsell and customer service training has also been reflected in significant sign up to Castrol Professional’s market leading programme solutions in recent months.”

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