Happily ever aftersales: maximising revenue opportunities

Aftersales is a revenue opportunity for dealerships that isn’t being explored as much as it could or should be. Recent research conducted by the CitNOW Group has found that 70% of retailers feel their aftersales teams could be doing more to maximise their revenue. 

Now is as good a time as any to identify performance gaps in aftersales and find easy and quick ways to maximise revenue. Ongoing changes around electrification, challenges in recruiting and retaining skilled technicians, and the rising cost of living are all having an effect. In this blog, we’ll highlight some of the best ways to ensure your aftersales operations are reaching their full potential, based on findings from our own data and trend analysis.

Retailer opportunities for innovation and change 

Our research has found that there are three particularly pressing challenges in automotive retail right now:

  • Technician resource: research by the Institute of the Motor Industry has found that there could be as many as 160,000 vacancies across the sector by 2031, and that 16% of these would be for vehicle technicians. That’s why it’s so important to maximise existing technician resource and minimise wasted time.
  • Consumer spending: amid the rising cost-of-living customers are naturally becoming more conscious and cautious about their expenditure. For example, Nationwide Building Society research has found that almost half of consumers have put off repairs to their cars because of pressures on their finances.
  • Business overheads: the cost of doing business has gone up, from equipment purchasing to energy prices and everything in between. The pressures this puts on budgets across a retailer’s operation makes it harder to find the money to invest in staff training, stock and infrastructure.

It’s for these reasons that many retailers – as our recent research and trend analysis has uncovered – are evaluating changes they can make. They’re exploring innovative ways to increase revenue and customer retention, including optimising technician and advisor time; proactively encouraging regular maintenance appointments; and using technology to drive efficiencies for the aftersales team. 

Small changes, making a big difference 

To underline the difference that these changes can make, our recent research looked into aftersales data to see how some retailers have been standing out with exceptional performance.  

The best-performing retailers have found substantial gains in conversion rates of red repair work improving conversion by 11% quarter on quarter during 2023, to an average conversion of 62.7%.  Similarly, they have also improved technician utilisation rates, where technicians are able to get more jobs done each working day. The top-performing locations improved their technician utilisation from 84% to 92% on average in just 12 months: for an average retailer, this means completing up to 377 more jobs per workshop, per year. 

All of this makes a material difference to the bottom line, and if the average retailer were to perform at these levels, could mean an estimated extra £124,825 in service and red work opportunities. 

Unlocking success: How top performers achieved results 

How were these retailers able to generate such huge savings and efficiencies in practice? Consistently delivering superb aftersales performance starts with technology and using the solutions at your disposal to the best possible effect. Three practical and effective ways that we recommend include: 

  • Benchmarking: using solutions like REALinsights to evaluate current performance allows you to understand where there are challenges and opportunities to focus on. That way, you can measure your operation against other retailers in your dealer group – as well as wider industry averages – and give yourself realistic goals to work towards.
  • Monitoring: establishing standards and objectives for aftersales teams and staff can both clarify responsibilities and boost performance. CitNOW Workshop and RTC can help here by tracking eVHC completion rates (connected to the corresponding video) so that time spent per vehicle can be analysed.  

The same principle can also be applied to sales advisors and pinpointing when they should contact customers for the best chances of success. For example, we’ve found contacting customers on Mondays results in a 31% conversion rate, against just 19% on Thursdays. It’s also important to record decline reasons accurately, helping with training and business proposals, and to take advantage of upselling opportunities.   

  • Utilisation tracking: working out technician throughput rates allows you to fill in any gaps and maximise their productivity. The starting point of this process is to ensure systems, data and processes are integrated (such as scheduling, part pricing and tyre costs); assign tasks to technicians based on skills and experience; and put the right lines of internal and external communications in place. 
In summary

It’s vital to set realistic targets for improving your aftersales, and that starts with  understanding your current performance levels in relation to market conditions. Based on this analysis, you can then take practical steps to enhance aftersales revenue through team controls for monitoring, efficient work allocation systems and effective communication. 

To find out how technology enables these changes, and how you can seamlessly join the dots from performance to revenue, explore CitNOW Group solutions in more detail here.