Coachworks: Lost Service and Parts Sales Statistics Underplay the Problem
11/01/2012

Evidence suggesting that franchised dealers are missing out on an average of £330,000 a year in lost service and parts sales underplays the issue, according to Coachworks Consulting.

Online PR News – 01-November-2012 – UK – Evidence suggesting that franchised dealers are missing out on an average of £330,000 a year in lost service and parts sales underplays the issue, according to Coachworks Consulting.

Last month (SEPT) one of the leading suppliers of eVHC software estimated that retailers were missing out on £1.5 billion of turnover annually by failing to sell service and parts for items identified by VHCs – equating to £330,000 per dealer.

However that figure does not take into account the thousands of vehicles that never receive a VHC in the first place.

Automotive business improvement specialist Coachworks estimates that on average only 85 per cent of vehicles coming into the workshop – excluding PDIs – are subject to a condition check.

Karl Davis, Managing Director at Coachworks, said: “That’s typically the real figure we find when we audit VHC completion during our in-retailer visits on assignments such as growth appraisals.

“But every outlet should be aiming for 100 per cent to fulfil duty of care obligations and to maximise opportunities to sell.

“Anything less than 95 per cent VHC completion as an absolute minimum could compromise retailers in today’s litigious society and fiercely competitive business environment.”

Mr Davis said too many Dealer Principals invest in state-of-the-art software and hardware and then fail to capitalise on it.

He said: “The true potential of eVHCs and other software is only tapped if the technology is embraced from the top down.

“Dealer Principals can’t abdicate responsibility once they’ve signed off the purchase order. They need to know that input and output data is robust, they need to be able to see the story behind the front page headlines and they need the ability to introduce cultures and processes that maximise opportunities.

“When arguably one of the biggest suppliers of eVHC software finds that only a third of red or amber work is actually sold, the industry has to take notice.

“There are certainly benefits of eVHCs over traditional VHCs. Real-time reporting, analytics and automatic data capture can be powerful tools, freeing up time to actually sell products.

“But we’ve dealt with hundreds of dealers who are missing out on significant aftersales revenues even when they have state-of-the-art systems.

“From a duty of care and business point of view, every vehicle coming into the workshop should have a condition check and the owner given an opportunity to buy from you – not from another retailer.”

Coachworks has a 10-year track record of improving profitability on the back of software that is already in use. There should be a daily comparison of retail job cards versus completed VHCs, Coachworks says, and the value of red and amber work sold should be compared to the amount of red and amber work identified.

In addition, Coachworks believes, retailers must know how much work has been identified by individual technicians and how much of that work has been sold by individual advisers.

Mr Davis said: “The technician should be loading the revenue pipe and the advisor should be selling it.

“When you consider that more than 50 per cent of profits come from aftersales for most retailers, and that absorption is dropping towards 50 per cent, there can’t be many more important things for a business to get right.

“Some software providers make most of their money from simply licensing the product. But technology is not a standalone solution – it can only accelerate good people and processes.”

For more information, visit http://www.coachworks-consulting.com/ or call 01335 324325.

ENDS

Press release issued by David Johnson, Shepherd PR. For more information, or to arrange an interview, call 01335 368020 or email david@shepherd-pr.com

Notes to Editors

Coachworks Consulting delivers no-nonsense, tailor-made leadership coaching, change management, growth appraisal and training and development programmes to the automotive industry.

Customers include leading manufacturers and dealerships in the UK and Ireland.

Coachworks consultants are experts in automotive business improvement and they are happy to act as industry commentators.