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Six ways car dealers can increase upselling and boost profits

By Richard Yarrow
Selling the physical car, new or used, is obviously an important revenue stream, but with a raft of add-on products to entice the buyer, it need only be the start. Everything from GAP insurance and warranty cover to service packages and paint protection can be valuable sources of income for the business if you can get the customer to say yes. What’s best practice to do that? We speak to the experts to find their secrets to success.

 

1: Service plans

Vantage Motor Group has 19 centres, 11 of which have been acquired in the past 18 months. Covering six brands, Toyota is its core business and two-thirds of customers buying a car take a service plan, with an average duration of four years.

Andrew Hunt, group aftersales manager, said the business moved to an E-dynamix system in November 2011. “It’s easy to use and customer-focused,” he said. “Take the options; we can build in anything we want, make it bespoke for different models and discount items in a very dynamic way, including by the age of the vehicle.”

In the early days of service plans they were sold at the combined retail price of each element, but admin charges meant customers were actually paying more. Now everything is discounted, so from a cost of ownership perspective it’s cheaper and more appealing.

Success for Vantage has come by communicating that, so each quote clearly states ‘you’re going to save £x’ by signing up. On occasions, Hunt said customers actually take the computer over from the salesman and start building the package themselves by picking what they want.

Secondly, there are no hidden charges. Almost all customers pay monthly, but if they don’t have a service they get all their money back.

Sales are incentivised and Hunt said sales growth has also come because Vantage staff believe in the product – so much so that several are actually using it themselves.

Service plans are now available across the group, with quantifiable results.

Retention is up and workshops have seen an increase in business from customers in ownership years four and five.

“The average plan value has shot up because we’re in the driving seat,” said Hunt. The average value is £231 per service, but if you take out the options – air-con service, etc. – the service value is £156. Options give us another £75 per service. That’s crucial.”

Next: Paint protection



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