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Dealers must embrace change in aftersales departments

Franchised must move out of their comfort zone to embrace change in their aftersales departments,according to ICDP managing director Steve Young.

The ICDP conducts research for the automotive retailing and distribution. Young, also a judge for the AM Annual Awards, explores aftersales against a backdrop of ‘disruptive change’ and considers the franchised proposition in the face of the independent challenge at this year’s AM Aftersales Conference.

Taking place at the Crowne Plaza, Heythrop Park, Oxford, on April 8, the conference seeks to establish clear signposts which will illustrate how franchised dealers can gain traction in a marketplace which has seen a dramatic reduction as a result of the recession, more reliable vehicles which require fewer services and the onslaught of the independents and fast fits.

Drawing on data and research from the ICDP, Young will open the conference painting the current picture while taking a glimpse into the future.

He said: “It’s not all doom and gloom. Franchised dealers just need to recognise that they must break out of their comfort zone of servicing mainly the cars that they sold over the first few years of their life.

"That business is not assured in the future, and even if it were, the volume will not support a typical workshop.  Dealers need to be more focused on retaining the car and the customer longer into the vehicle life.  They then have the opportunity to grow their business, even as the total market shrinks.

“We can see that the existing structure of automotive retail is changing at a rapid rate which is throwing up opportunities and challenges. We hope by shedding some light on the market changes as a whole, we can help dealers reconsider their approach so they optimise their chances of being one of the winners, by broadening their customer base and reducing their overhead.”

Some manufacturers are already introducing methods in a bid to safeguard future business for their network such as introducing a minimum annual service but this only reduces the rate of decline in the face of improved technology and reliability.  Service plans and telematics will help to improve retention in the franchised networks, but independents will fight back with their own products.

Dealers also need to tackle other challenges such as using different ways to maintain customer relationships.  As visits to dealerships reduce both during the buying cycle and for aftersales, there is less of a chance to create loyalty.  It means aftersales managers need to have an offer which captures more of the potential aftersales spend, and utilise good processes and digital innovations to communicate this to their current and potential customers.

According to ICDP figures, consumers are extending their online research to aftersales with almost half (46%) in five major European markets conducting price sensitive searches before servicing. Furthermore, motorists are increasingly requesting non-OEM parts or asking for dealers to fit parts they have sourced themselves. Meanwhile, the independents are particularly active in the online arena embracing new ways of communicating with customers and prospects, and benefit from a perception that they are always lower cost than a franchised dealer.

Young said: “Customers view dealerships as a hurdle they have to jump as part of the sales process, just the place they go to sign documents and collect their cars, but are not building loyalty. Therefore, aftersales teams need to be connecting in a meaningful and compelling manner with their customers and prospects if they are to be one of the winners in a market which overall will have more losers.”

Tickets are available to dealers and manufacturers, with a limited number of supplier tickets on sale. To book, please contact Nicola Baxter on 01733 468289, email nicola.baxter@bauermedia.co.uk or visit www.aftersalesconference.co.uk

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Comments

  • Jon Epton - 29/01/2014 16:12

    As the pressure on aftersales grows, they need to find new and more creative ways to attract customers. Added value offers help dealers overcome the customers reluctance to use franchised dealers for repairs or servicing. One such offer that is bringing customers back into dealerships is where we at Xvision work with aftersales managers to offer customers OEM standard parking systems at attractive rates when they visit the dealership for any other work on their vehicle. The combination is proving attaractive and plans are now in an advanced stage to make this offer to a larger audience.

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