The predominance of distress purchasing of oil means dealers are missing an opportunity to improve bottom-line profits through focused sales training and pro-active customer communication.
Around 65% of oil top-up sales are distress purchases, mostly at petrol forecourts and supermarkets. The dealer network and independent workshops make up the remainder.
Joanna Mitchell, Mobil 1 marketing manager, said: “For top-ups to succeed as a P&L line, dealers need to adopt a ‘from the top down’ programme of best practice, training and education.
“The current economic climate is the perfect environment for dealers to evolve from a ‘sales operation’ into a service provider, delivering support and solutions to existing customers.
“Many service advisers have shied away from selling top-ups on cost and pricing grounds. However, research shows that 73% of customers do not see the price as that important.”
Communicating customer benefits
Points to stress to customers:
- The performance of fully synthetic oils help to reduce engine wear and prolong the life of the engine
- The sale of top-up oil offers peace of mind should the oil light appear
- A new engine from a franchised dealer will cost from £3,000-£5,000
Is top-up really worth it?
To discover the potential of focused top-up activity, consider the following:
- What is your annual volume of oil sales?
- If we assume 4.5 litres per service, how many services would that be?
- What percentage of your workshop is dedicated to retail customers?
- How many services does this equate to?
- How much profit do you make per litre of top-up?
- Work out your dealership’s annual profit opportunity by multiplying the answers to the last two questions.
Education and training
Educate your staff and your customers to the benefits of carrying a top-up pack and buying premium grade oils.
A knowledgeable and persuasive customer service team will optimise top-up profits.
It should be part of any aftersales best practice. Senior management must commit to regular training for key staff.
Message to the consumer
By explaining the peace of mind benefits and ‘prevention better than cure’ through dialogue and point-of-sale material, service advisers can convert additional sales and improve profits.
Premium synthetic motor oil:
- Offers enhanced fuel economy
- Provides increased wear protection for long engine life
- Is formulated to help keep cars running like new
- Provides outstanding cleanliness and deposit control
- Fast starting at low temperatures
What you need to do
A knowledgeable and persuasive service adviser will boost customer acceptance and provide powerful arguments to help sell high-margin, high-quality lubricant brands
As workshops see customers less frequently, the initiation of progressive customer retention strategies is vital to the success of a business.
Improve customer buy-in with greater brand presence; customers who recognise and have a visual
affiliation with a brand are more likely to be comfortable buying it.
This is an extract from our new book, ‘The AM Guide to Running a Profitable Dealership’. For more details, visit the supplement section at the AM shop
Case study: Southgate Group
The Southgate Group comprises eight Mitsubishi and Peugeot dealerships in Hampshire and Dorest.
Group managing director David Moulton has stocked the Mobil range since 1996.
Moulton said: “We have never been afraid to promote the fact that we pride ourselves on using the best, most technically advanced oils on the market across our dealerships.
"We regularly train our aftersales teams on the benefits of high-quality oil.
“The owners of our high-performance Mitsubishi Evolution models and the new-generation Peugeot HDi FAP diesel engines see significant improvements in performance and economy by using the Mobil 1 products.
"These benefits ensure our customers have become more diligent in checking oil levels, enabling us to sell more ‘top-up’ products.”
The agreement provides the Southgate Group with interest-free funding in return for supplying Mobil, together with point-of-sale material and training.
With 150 employees and 48,000 litres of oil sold every year Moulton ensures his staff are trained and briefed on the benefits of selling oil.