With predictions that 2010 could be an even tougher year than 2009 as the scrappage scheme ends, dealers need to look at different ways to make a profit. One of the best ways is to focus on Aftersales which can contribute towards half the average dealer's profit.
"Mazda has a relatively high proportion of sales to private owners, whose loyalty to the dealer network's service operations provides a solid foundation for Aftersales income," says Steve Jelliss, Aftersales Director at Mazda Motors UK.
"It's a good area for dealers because it relies on the cars already in circulation and not new sales, so when sales become weak it keeps them going. My team looks to support dealers with complementary programmes, for instance our Digital Service Record system which logs services online and provides an actionable database in-house," adds Jelliss.
For Mazda's 151-strong network, service and parts typically contributed 50 per cent of gross profit in the first nine months of this year. "Service and parts contribute the same amount of profit for the dealers as they get from new and used car sales," highlights Jelliss.
Mazda is so convinced of the benefits of focusing on Aftersales that it is running a pilot project to prove the theory to the skeptics.
Jelliss says that the trial, involving a sole franchise dealer and one of Mazda's 14 nationwide business managers, aims to look at the dealer holistically rather than focusing on sales charts.
"We want to see where the dealer can do better. For example: Is the Service Receptionist offering air conditioning checks? What additional services might interest the customer? Dealers need to look for opportunities when a car is in for routine maintenance work or other attention."
"Dealers have a duty of care to their customers but that responsibility is also a revenue opportunity," comments Jelliss. Initial results are encouraging with monthly revenue growth reported from June to September 2009 and September's Aftersales revenue 43 per cent higher than average monthly revenue before the start of the pilot project.
"It's all focused on customer care, flagging up what needs to be done or what can be done in the future, whether it's selling new tyres or replacing brake pads that might be worn out before the next service is due."
The key though is to make sure these opportunities are followed up with the customer. "That's what makes the difference," concludes Jelliss.
This approach also helps explain why Mazda has come top for the Automotive Sector in the UK Customer Satisfaction Index published by the Institute of Customer Service. Mazda's score in the twice-yearly service was 10 points higher than the industry average and three points clear of its nearest competitor.Published 29 December 2009