While many general managers and dealer principals come from a sales background, the aftersales department isn't often effectively monitored.
Many general managers and dealer principals will know their car sales metrics inside out. From sales performance versus sales targets to the test drive percentage, these figures can almost be recited in their sleep.
Much of this stems from the fact that most general managers and dealer principles come from a car sales background and are used to this level of scrutiny.
All too often however the aftersales department isn’t monitored as effectively.
This is despite the typical service department making up 50% of a dealership’s overall profits.
Failure to correctly monitor aftersales activity means dealerships could be missing out on revenue opportunities without even knowing.
Furthermore, teams may not be performing as well as expected. With this in mind, here are six key metrics to help you monitor and improve aftersales performance:
Average number of vehicle health checks per dealer
This is a good indication of general activity in the aftersales department, and gives a starting point for further metrics.
Knowing the monthly tally for a dealership’s VHC rate opens up the opportunity for comparison to the national average.
Consequently, managers can gauge whether their dealerships are outperforming key competitors or falling short.
Vehicle health check completion rate
The failure to complete health checks on vehicles presented to service departments means dealers are missing out on revenue opportunities.
Previously released data has revealed that the average completion rate fell from 78.2% to 73.3% in 2015 and with the average amount sold per health check standing at £70.49, this equated to a further missed yearly revenue opportunity of £105,973 per dealer.
Average percentage of red work sold
Dealers are letting too much urgently required work slip away. Red work is identified as faults that, if not dealt with, render a vehicle un-roadworthy. So if a customer decides not to have the work done via a main dealer they’re usually looking at having it carried out by an independent outfit. Once customers make this decision it’s hard for dealers to win them back. So it’s not just a case of losing the immediate sale, it also means missing out on future business.
Average percentage of red tyres sold
Tyres categorised as Red pose a serious safety risk and are likely to be illegal.
Despite this, conversion rates can be quite low so it’s a vital metric for aftersales managers and dealer principals to be able to look into.
The fact that dealers are selling so few replacement tyres raises a major duty of care question, with the threat of potential legal action another concern.
Average amount of work identified per vehicle health check
The ability to monitor the types and amount of work identified helps to set a target for sales.
Managers can track the amount of work that service departments should be selling and compare it to actual sales results.
Average amount of work sold per vehicle health check
Following on from the above metric, conversion rates are a good indicator of the strength of sales techniques and customer service levels, and also help to identify any possible skills gaps within the team.
If work is being identified but not sold then it may be a case of technicians not communicating effectively with customers to explain which repairs are needed and why.
Author: Chris Saunders,business unit director, autoVHC