Ken Cumming Aftersales Development Manager

Ken Cumming

Aftersales Development Manager

How to improve absorption


Absorption = Aftersales Direct Profit Total Overheads

In order to improve

OR

Total Overheads - reduction

• Key focus since 2008• Deep cuts throughout industry• How much more can you realistically cut and still flourish?



OR

Focus on Aftersales Departmental profit

Focus on Aftersales Departmental profit

Bodyshop DPParts DPOther DPService DP

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How to grow service department profit

Service Direct Profit

• Cost reduction • Margin Improvement• Volume Increase

Cost Reduction

• Staff– Service advisors– Technicians

• Systems

Margin Improvement

a. Labour rate increaseb. Discount when invoicing

Margin Improvement

a. Labour rate increase

Simple to doImmediate impact

Margin Improvement

• Your customers may be shopping around – what are they being offered? Know your competition– Get on “fast fits” marketing list

• Do your staff believe you offer value for money– Get them to check the market- staff perception– Customer perception

• Price the job not parts and labour

Margin Improvement

a. Labour rate increaseb. Discount when invoicing

Margin Improvement

b. Discount When Invoicing

• Wrong time to negotiate- work completed• Who authorises discount?

• Does it improve customer satisfaction?

Negotiate at the time of booking!

Workshop Loading

Taking the booking

• Price clear and bold on the job card• Price agreed at booking- confirmed at drop off• Additional work agreed and annotated on job card• Final invoice matches everything agreed….reduced

discounting

But who should do take booking?Take it away from the advisors

Workshop loading

Do you operate a “call centre” or split the role?

Specialist peopleDifferent skill set to advisorNever ‘too busy’ to make callsLeaves the customer facing team facing the customerFill to capacity

Margin Improvement - summary

• Price to your market place- research• Split the advisor and CRM role (call centre?)• Negotiate at the time of booking• Compare price on the job card to invoice price and

discuss any differences • 1-1’s with all staff by service manager

Volume Growth

Only 2 opportunities

• Get more customers through your door• Get more out of those that already visit your business

Getting more customers through your door


• Lapsed customer campaigns• Press adverts• Special offers

Do they really attract new customers or even old ones back?

You don’t need more customers- you need to hold on longer and stronger to the ones you have.


Wikipedia describes customer retention as:

• The activity that a selling organisation undertakes in order to reduce customers defections.

• Successful customer retention starts with the first contact an organisation has with a customer and continues throughout the entire lifetime of a relationship.


What is the key to customer retention?

ACTIVITY - Ask for it and explain why!

• Ask your sales customers to come back for servicing, MOT and repairs

• Ask your workshop customers to come back again.

Does every customer leave your dealership with a strong message and reason to come back?

Customer Retention

Much of our retention activity is driven through the database

Who in your business is responsible for the database?

Everybody?....... Then nobody!Make one person responsible for policing it.

Do the basics everyday with absolute conviction.

Make sure every customer on the database has a ‘plan’

Database management

Initial Daily Monthly

What state is our database in?

Was every customer created correctly?

Cars sold last month- do they all

have MOT and service dates?

Was every vehicle created correctly?

Cars sold 11 months ago- did

they all have MOT and service dates?

Did every customer that we saw have their information

updated?

AT NO COST…just daily routine and focus

Database Management

Third Party data cleanses…..

Fixes the symptoms but not the disease

3 – 4 years later …pay for another cleanse unless you fix the root cause.

These are worth it IF you have sorted the root cause and want to shorten the time lag

Database Management

Using your database to get more customers through your door.


The sales Funnel


The Sales Funnel

Contacted

Booked

Contactable

The Aftersales Funnel

LEAKAGE

The Decision Tree


Have a SHARED plan……

Have suitably trained people ready to handle the objection


• How big is your opportunity– What customers are due to have work done?– Check the ‘customers due’ list from your DMS

• What is your success rate on getting them booked in?• How many customers object and say no? Why?• What can you do to improve it?

Reminder Process

Reminder Process

• Benchmark your success rates with other sites and look for improvements

• Are the reasons for customers saying no valid?– Are all staff trained in objection handling?

Using your database to grow your business

• Back in your businesses today the workshops will have customers

• 9 out of 10 customers in workshops are there because they were invited (ask!)

• If we only invite 75% of the opportunity then we will not succeed

• If we don’t use the right people to make the call we will not succeed

• We should manage the service leads the way we would manage sales leads.

• Database quality is the cornerstone of retention

Database – Lost Opportunity reportDatabase Lost Opportunity Summary

Potential duplicate targets requiring investigation

Total 4 (Full details run ' Duplicate Targets')

Cars sold last month without future service or MOT reminder dates Potential 3 year loss*

Used Toyota 1 ... 481.24 (Full details run Cars Sold incorrect dates')

Cars seen through the workshop without future service or MOT reminder dates Nothing to report this month !

(Full details run 'Vehicles Missing Data')

Cars seen through the workshop without email address Total No Email

Toyota 450 139 Non-franchise 39 15

(Full details run 'X73 Recent targets no email')

Cars sold 13 months ago Sold Retained Actual 1 year loss*

New Cars 8 7 ... 93.37 Used cars 28 24 ... 592.88

Used Non-franchise 10 3 ... 1037.54 (Full details run 'X74 Sold Vehicle Retention')

*Figures used for calculations are based on 93.37 for a single service, 371.54 for 3 years servicing and

54.85 per MOT (for guidance purposes only). 3 year figures include 1 MOT for new vehicles and 2 for used. 1 year figures include no MOT for new vehicles and 1 for used.

The information should chase you… you shouldn’t have to chase the information

Volume Growth

Only 2 opportunities

• Get more customers through your door• Get more out of those that already visit

your business

Getting more work out of the customers I see

Every manufacturer has a health check

• VSR• VSC• Health Check• etc

Getting more work out of the customers I see

• Hot prospect• Plan the conversation• Second face

– Duty of care call

• Don’t sell - offer good advice• eVSR systems

The structure of the service department

Structure

Key success to this is the role of the service manager• No longer the most technical person on site• The key to success is management of the team• Stay out of the office and work with the team• Customer service is key• Staff coaching and development is critical to success

– Very few can do it or actually do it

Service Manager as a coach

• Visuals of performance– Department and individuals

• Team talk– YTT– Quick (5 mins)

• Individual 1-2-1’s– Weekly and monthly- different focus– Regular

• In the diary • 5 areas of strength 1 area of improvement

Review document

“Top Gear” style leader board

How do Improve my absorption?

Can one person do all that is now required?

Or should we look at the responsibility – Front of house manager– Workshop/technical manager

In Summary


How to Improve Absorption

• It will not improve by itself– Its needs activity – not “focus”

• Pick the area you believe you can grow– Who, What, When, Where, How– Milestones– Lead and lag indicators

• Someone needs to own and be responsible for it.

What will be different to yesterday?

Key actions

• Find out your areas of weakness and strengthen them- fact not feeling !

• Make the performance visible - Department and individuals• Regularly review team and individual performance against the required

level • Review Database focus – single owner outside of aftersales• Review Reminder activity – draw it out and look at it • Remove workshop loading from the service front desk• Prepare for health checks and second face them– who is best?• Make sure every job card has an agreed price on it• Measure your used car retention- Sales dept should be aware• Ask how many hours have been sold with the same frequency of asking

how many cars have been sold. (how many hours booked in for tomorrow?)

In Summary

Aftersales is a simple business complicated by many views and opinions on how to make it work

Here’s mine……… 3 areas for absolute dedication

• Database• Reminder activity• VHC/VSR/Additional work

Driven through a motivated manager and an able team that knows what is expected of them.

Thank you

Ken Cumming Aftersales Development Manager

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