Suzuki GB is working with its network of car dealers to improve the efficiency and profitability of their workshops. The manufacturer is concerned that around a quarter of the network is failing to capitalise on the potential earnings from aftersales.
It has enlisted consultancy TTL Automotive to work with its retailers and improve results. Based on TTL’s i-pop (internet performance optimisation pro-gramme) solution, a Suzuki
Performance Enhancement Pro-gramme (PEP) provides each dealer with a benchmark for aftersales KPIs and indicates how the workshop compares to those benchmarks.
James Richardson, Suzuki GB national aftersales manager, said: “We recognised that service managers have often been promoted from the shop floor by a dealer principal with a sales background who does not necessarily understand aftersales.
“Aftersales managers are often kept in the dark about best practice in areas such as efficiency or CSI. So we were looking for an online best practice guide.
“Getting the right people following the right processes will make a successful business.”
Richardson said around 70% of the 160-strong network of Suzuki dealers and authorised repairers are using PEP to some extent. None are compelled to use it.
“Suzuki is not a “big stick” franchise, but more about working hand-in-hand in partnership with dealers,” Richardson said.
Nevertheless, Suzuki zone managers can view their dealers’ performances through the PEP, which displays below benchmark results clearly in red and strong performances in green, split by monthly, three-monthly and year-to-date results. PEP also indicates monthly improving or worsening
performance, so a decline can be discussed immediately and coaching put in place.
PEP incorporates a toolbox, which suggests processes and best practice which can be implemented within the workshop to improve performance and aftersales managers can input their action plan for the zone manager to review and monitor progress.
For further support, TTL Automotive is running a series of regional PEP review workshops. These identify particular strong and weak areas and collect ideas to move dealers forward.
Asked what benefit Suzuki GB gets from the programme, Richardson is quite open: “We’ll sell more parts and that’s good for us, and in driving up dealers’ performance we’re helping them still be here tomorrow.”
Key efficiency drivers
- Labour gross profit as a percentage of retail sales (benchmark 75%)
- Parts gross profit as a percentage of retail sales (benchmark 22%)
- Retail hours sold as a percentage of total hours (benchmark 70%)
- Recovered rate as a percentage of retail labour rate (benchmark 80%)
Identifying missed revenue opportunities
William Blackshaw is one aftersales manager who is particularly enthusiastic about the Suzuki PEP tool. He’s come up through the ranks at his family’s dealer group, Blackshaws Garages in Northumberland, since starting as an apprentice nine years ago.
The PEP tool has helped him identify that the workshop missed out on £35,000 potential extra parts and labour gross profit in the first half of 2009, despite achieving 99.9% overall efficiency, measured by total hours sold divided by hours attended.
His challenge is to bring the workshop’s retail hours sold closer to the benchmark of 70% of total hours. Blackshaw said: “As a dealer you don’t want to be showing performance is down to the zone manager, so that drives you to push it back up using the guidance from the programme. Using the PEP tool we’ve identified a way to follow-up lost service and MoT business.
“The perception within our town was that we were too expensive. So we’ve changed our marketing to promote that we are specialists with factory trained technicians, and have changed our pricing slightly to be more competitive.”
His staff are developing a greater focus on customer satisfaction and identifying opportunities for immediate or deferred extra work. PEP had identified customer communication as another weak area. Now customers are better informed when their car will be ready. The business is already improving – in 2008 it ranked 70th in the network on CSI, but this year has climbed to 22nd.