Are you missing out on the aftersales opportunity?

Car dealerships are experiencing healthy sales figures right now, with data from August showing new motor vehicle sales rose by 3.2 per cent year-on year.

With this result is especially pleasing given flat economic conditions, one aspect of a dealership’s operations that could benefit from more attention is aftersales.

Dealerships are often so focused on selling cars it’s easy for them to overlook the aftersales opportunity available to them. But servicing and parts would actually contribute up to a half the business’s profit. This potential means aftersales services cannot be ignored.

One of the barriers to leveraging a business’s aftersales potential is the view that it’s not a business development function. Rather, it’s perceived as being a product. Given the potential for aftersales to increase a business’s profitability, it’s worth challenging this mind-set.

The first step is to identify exactly what the aftersales opportunity is for the business. This involves examining the customer database to be able to identify pockets of potential. It’s likely this will produce both big and small opportunities, both of which will be valuable to the business.

Once the business understands the opportunity the next phase is to work out a plan to grow the aftersales component of the business. Importantly, if the business really wants to drive returns from this department it will require the support of the whole management team.

It’s also important to provide training and coaching to aftersales staff to give them the confidence to make progressive steps to improve sales from this side of operations.

Additionally, it’s vital to give staff the time to be able to work on this aspect of the business. This can be challenging given how busy car dealership employees are. Which is one of the reasons why management needs to support this initiative.

Another critical factor is to ensure staff are aiming for achievable results. Try to ensure performance targets set for this aspect of operations are achievable, to set up staff for success.

Importantly, this should include programs to incentivise staff to grow the aftersales business, a well as a clear communication strategy around the project. Another essential ingredient is a commitment to measure the strategies that are working, to help focus sales staff’s attention on the tactics that do produce results.

For instance, it’s important to understand what the current success rate is for the service reminder process. Another key measurement tool is a review of how many lapsed customers have been repatriated to the business. That way, staff have data at their fingertips to identify the best way to consistently repatriate customers.

Focusing on aftersales delivers a quantifiable revenue benefit for the business. But that’s far from the only benefit. Building up the aftersales business is a way to increase the overall value of the business and improve the dealership’s competitive position.

It’s also a good way to develop shining stars within the business and give them a reason to stay with the dealership.

It’s worth talking to advisers who have extensive experience in this area to find out the best way to grow the aftersales side of a dealership’s operations. Working with experts allows the business to make the most of this often overlooked aspect of a dealership’s business.

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