Automotive Aftersales Process
Posted on 2nd October 2024 at 17:09
Background
Talking about aftersales processes for me is like going back to my roots. With almost 35 years’ experience within the aftersales arena, I think I’m reasonably positioned to talk about some of the challenges faced by aftersales departments along with some well-tested solutions.
During my automotive career, I’ve spent time in multiple different roles: technician, supervisor, manager, trainer and consultant. All of which have built my skills to navigate what is often seen as a complex process.
Firstly, lets break the illusion that aftersales is complicated - brave statement right there! Fundamentally at its heart it is sales; the key difference being what it is you are selling. When you look at what is usually described as sales within the automotive industry it’s about selling vehicles - whether new or used - and while there are some additions to this, like selling finance and service plans,
it is mainly about the large chuck of metal that people normally have a strong desire to buy.
When it comes to aftersales it does get slightly more complicated regarding what it is you’re selling. Time, parts, and service plans are obviously some of the key products. But you’re also responsible for ongoing reputation that leads to customers not only coming back to your business to buy their next vehicle but also the influencing of them buying the same brand of vehicle. The old phrase “sales sell the first vehicle, aftersales sells every one after that” is certainly not untrue! It’s also worth noting that in the main, customers have less desire to spend their hard-earned money on their aftersales experience as opposed to their sales experience.
Another key consideration is aftersales departments are more often than not the largest department in the dealership. This means that there are more people and therefore by default likely to be more challenges. Whether you’re thinking about the vehicle repair, the supply of parts or the customer interaction, each element is based on people and their willingness to follow set processes.
So, what goes wrong?
The temptation is to start listing the myriads of problems experienced but we’d be here for a long time working through each of them so I’m going to stick to three key things: delivering profitability, customer satisfaction and people.
Delivering Profitability
Profitability for many businesses is a challenge and an aftersales department is no different. For the more experienced people reading this (that’s a polite way of saying the ‘older’ ones amongst us) you may remember the days of 100% overhead absorption. For the uninitiated, this is when the money you make from your aftersales department covers 100% of the costs associated with the running of the whole dealership. This reality became a distant memory many moons ago and now is seen as something that is about as attainable as finding the Holy Grail. For so many manufacturer dealerships, they would love to see 80% absorption! This is due to the increasing costs of running a dealership: wages, energy costs and in particular the cost of franchise, basically the bigger the ‘gym palace’ the bigger the cost!
While there is profit made from the sale of parts, the main profit stream is from the sale of the technician’s labour. This means that the efficiency, productivity and utilisation of the technician is critical and sadly this is where it often goes wrong.
There are many examples where technicians just don’t work fast enough and therefore you’re unable to sell all of the time available but all too often the technicians are impacted by inefficiency in other parts of the aftersales process. For example, time is all too often wasted with the technician trying to obtain more information about the customer complaint or waiting for additional parts required to be authorised. This leads to either downtime on the job or inefficiency due to the vehicle being taken out of the workshop then needs to be brought back in later.
With some critical focus on the booking stage of the process where time can be invested in gleaning as much accurate information from the customer as possible, some of the downtime can be avoided. Likewise if there is structured effort placed in the preparation for the customer arrival, it is possible to identify a significant amount of customer requirements during their upcoming visit so therefore both the parts can be made available and more importantly an upfront conversation can take place with the customer regarding the ‘potential’ of what might be required during the service/repair leading to a more efficient process for the technician.
It's worth recognising that time can only be sold once. If a technician loses 15 minutes due to inefficiency in the processes, the time cannot be sold again it’s gone forever.
There is then the balance between selling additional work (namely work required to keep the vehicle in the best working order possible, usually identified as a result of a Vehicle Health Check or VHC) and the customer not being left feeling like they have been ripped off. While there are lots of things that can be done to support this, the main one in my opinion is transparency in the process (I’ll come back to this shortly).
Having a clear structure for the technicians to follow with regards to the identification and sale of additional work is at the heart of improving profitability in this area. The classification of the identified work, usually described as Red, Amber and Green, is critical. This is what feeds into the building of trust with customers. If we take brake wear as the example, it’s so important that all technicians are making the same judgements. Trust is undone extremely quickly when customers are told that their brakes are 90% worn and require replacing only to get a second opinion that contradicts this.
Timing of the Vehicle Health Check (VHC) is another consideration with the identification of additional work. I personally remember when VHC was first introduced in the late 90’s and the confusion that ensued when carrying one out at the same time as carrying out a scheduled service. This is because to all intents and purposes, you are checking things that you were going to check during the service anyway so therefore you would tend to process the paperwork at the end of the job. This often subsequently led to the late authorisation of additional work and inefficiency of the technician as they have already returned the vehicle to the car park, only to have to bring it back into the workshop, impacting on the time that was available to sell during that day!
Basically, the early steps of the aftersales process should be focused on the technicians’ ability to carry the work out with the least amount of disruption. I’ve worked with businesses where the ambition is that the vehicle is brought into the workshop once, taken up on the ramp once and taken out of the workshop once, as opposed to it coming in and out several times and going up and down on the ramp multiple times. This forms the backbone of lean working principles.
Customer satisfaction
Trying to be profitable while delivering a high level of customer satisfaction is something that many businesses struggle with. It’s relatively easy to take customers’ money but to do this while ensuring they want to come back again is a different ball game!
I’ve not worked with a single business that doesn’t intellectually know that customer satisfaction and profitability are intrinsically linked but all too often the focus is more on profit and less on customer satisfaction. In part this is down to how business performance is measured and the weighting given to financial performance. Additionally it can also be down to how individuals are incentivised to perform; the ‘the more the business earns, the more you earn’ approach can drive the wrong
behaviours if there is no counter balancing measures. It should be about earning money for the right reasons, not just for the sake of it, in my opinion.
Often a ‘balance scorecard’ can be used to measure performance. This attempts to ‘balance’ the need for customer satisfaction, profitability and quality all at the same time. Like anything, it is not a perfect solution as there is often a disproportionate amount of effort placed in trying to ‘work’ the system (if you know, you’ll know!).
One of the underpinning elements of customer satisfaction is knowing what your customer needs are - but it doesn’t stop there if you want to achieve greatness in this area. It’s very much about doing the things that you don’t have to but you want to. I recently read on a friend’s LinkedIn post that the opportunity with customer service is the difference between what you will deliver for your ‘normal’ customer versus what you will deliver for a customer that is famous. This succinctly puts what I’ve been trying to say to businesses for many years!
In my experience, businesses that truly place the customer at the heart of what they do are more likely to have better profitability and also have a higher rate of staff satisfaction. And remember, people generally like to do nice things for other people. Sadly, in many cases, the perceived cost of delivering higher customer satisfaction prevents the required mindset shift to enable this to happen.
There are also clear links between customer satisfaction and requirement for repeat repair, where a customer has to return to the workshop because something wasn’t fixed the first time. More often than not this negatively impacts their experience and while there are numerous reasons for this happening, it’s all too often because the business didn’t prepare fully for the customer’s visit.
It's very much about delivering on what you have agreed or promised, and wherever possible going above and beyond, whether it’s remembering that it’s your customer’s birthday and giving them a hand-written card or hoovering the Audi logo into the boot carpet pile of their A3 during its service wash - both of which I’ve seen and both in high performing businesses. These are the things that stand you apart from the opposition, creating great moments that are memorable. The old saying “people will forget what you said but they won’t forget how you made them feel” is as relevant today as it’s even been!
People
The glue that holds everything together!
Undoubtably the main reason that things go wrong within an aftersales process is because people don’t do what they were supposed to do, they are not clear on what they’re supposed to do, or they don’t focus their ‘care’ in quite the right place.
It’s important to remember that people generally don’t go to work to do a bad job, sometimes it happens because we are flawed beings.
People need to know what it is they are expected to do, what the processes are that they should follow and how much autonomy they have to stray from the processes when needed.
Communicating clearly what is required of people can be time consuming and therefore can be rushed, but understand that “clear is kind, unclear is unkind”. People's moods can change from day to day, influenced by their work environment and the
level of trust they have in their colleagues. These factors shape how they feel, which in turn affects how they carry out their tasks. Ultimately, our emotions drive our behaviour.
Clearly defined roles and responsibilities, combined with good management and leadership underpin how people feel about carrying out their role and therefore impacts how they perform (watch out for an upcoming blog about management and leadership!). Always remember, happy staff = happy customers.
You may have heard of the phrase ‘Customer First’. This is something that I don’t personally subscribe to - while you may want to promote this outwardly to your customers, I believe you should put staff first and customers second!
Summary
Even though I said at the start that aftersales wasn’t complicated, like anything it has its complications due to lots of ‘moving parts’. That said, with the right mindset it is possible to ‘have it all’: good profitability, great customer service and happy staff. You just need to be willing to invest your efforts in the right place!
Dave Bownes
Director,
Haynes Oliver Limited
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