Could an extended MoT-free period shorten your profit margin?

Could an extended MoT-free period shorten your profit margin?

In January the Government unveiled plans to increase the first MoT date for new cars from three to four years. If approved, the changes could come into effect as early as next year. As reported by WhatCar.com, transport minister Andrew Jones has said that the proposal has been devised to ‘bring the MoT test up to date’ in order to help save motorists money and time. Indeed, it is estimated that with over 2.2 million cars having to undergo their first MoT test each year, the change in rules could create annual savings of more than £100 million for motorists.   Dealership concerns While this is good news for consumers, the same can’t necessarily be said for those working within the automotive industry. The Retail Motor Industry Federation (RMI) is among those to have voiced concerns over the safety implications of a delayed first MoT. Speaking to AM-Online, RMI director Stuart James said: “…the benefits promoted by the government are seriously outweighed by the pitfalls. At the three year period alone this change will see 400,000 unroadworthy cars on the road for another 12 months and no official mileage recorded until year four.” Safety issues aren’t the only concern; many industry representatives have raised questions over the impact that the new rules could have upon business. For many dealerships, MoT testing and related sales makes up a significant proportion of aftersales revenue. It stands to reason that a lengthened MoT-free period for new cars is likely to result in a loss of income, from both the test itself and any subsequent repair work. In its consultation document, the Department... read more
Choosing the right sales lead management system

Choosing the right sales lead management system

In addition to staff training and dealer events investing in an effective lead management system is, for many dealers, fast becoming a way of safeguarding against poor performance. As revealed by our research, all too often dealers have gaps in their sales processes, with sales teams faltering in crucial areas such as part-exchange appraisal and customer enquiry follow-up. Sales lead management systems however can help to drive processes and structure within the showroom, ensuring these shortcuts and opportunity leaks are eliminated. As is the case with eVHC software in aftersales, it’s important that dealers choose the right type of solution. There are many options available on the market, each with their own USP, but to maximise ROI, we recommend looking for systems with the following core features:   Mobile capabilities Lead management software that enables dealers to mobilise the sales process can be incredibly beneficial in boosting overall performance. Often, one of the biggest challenges for car dealers is getting customers to sit down at the formal setting of a desk in a showroom. Solutions such as the enquiryMAX iOS app however, allow sales teams to make use of tablet devices both in the showroom and out on the forecourt. This brings an added dimension of flexibility and informality to the sales process, allowing enquiries to proceed in a way most suited to the customer, whether that’s by starting out on the forecourt with a part-exchange appraisal or browsing the new vehicles available. Another advantage of systems with mobile capability is ‘on the spot’ data access. Information relating to vehicle stock, product video presentations and supporting point-of-sale material can... read more
Black Friday events – a good opportunity to drive sales?

Black Friday events – a good opportunity to drive sales?

The recent news that car dealers enjoyed a one-day spike in sales on Black Friday shows how the sales phenomenon that started in the US around Thanksgiving is increasingly being adopted by retail businesses, including dealers, on this side of the Atlantic. Understandably, many dealers are keen to drive sales where possible. The data from volume and premium brand dealerships across the UK showed a 23% increase in the number of vehicle sales completed on November 25 when compared to the previous Friday.  Vehicle enquiries were also up on the day, with dealers seeing 5% more enquiries on Black Friday than on November 18. That’s all great news for dealers, however, a word of warning: the data shows that enquiries and sales fell one week later, on December 2, by 13% and 17%, respectively. We’ve written several blogs recently with advice and best practice on how to run a profitable event weekend. Customer events of any kind are a useful feature on a dealership’s calendar because they create a buzz in the showroom. By offering incentives such as discounts, potential customers are more inclined to make a purchase. But dealers need to ensure they are not staged at the risk of overall profitability. All too often in a frenzied drive to push sales around an event, prices are repeatedly slashed. While customers will be expecting some discounts, failure to stick to a profitable line can lead to lost opportunities and major set-backs. This same danger exists with Black Friday too. Indeed, this year, a number of retail stores were hesitant to take part, including one of the early trailblazers,... read more
‘Honesty is always the best policy’ – The importance of transparency in aftersales

‘Honesty is always the best policy’ – The importance of transparency in aftersales

According to a recent survey commissioned by MyCarNeedsA.com, almost half of motorists are concerned about being overcharged for repair work, -particularly if using a service department they haven’t visited before. Familiarity does little to allay fears either it seems; as reported by motortradenews.com, just 28% of motorists admit to fully trusting the garage they use regularly. Such a lack of trust could have huge implications for road safety. Indeed, The Motor Ombudsman recently claimed that 38% of motorists skip taking their car in for a service altogether, mostly due to a fear of being overcharged. As an industry it’s essential that we work together to restore motorists’ faith in aftersales services. Ultimately, it all comes down to making sure service departments present work as a duty of care on behalf of the dealer, and only recommend work that is actually needed. ‘Tools and training’ Electronic vehicle health checks can play a key role in improving communication between dealerships and motorists, and are therefore particularly helpful in building levels of trust. When used during the service process, software such as autoVHC enables red and amber work to be identified, logged and presented to customers quickly, consistently and professionally. This undoubtedly streamlines operations for technicians; crucially for the customer however, eVHCs provide full visibility over any work that may be required, -showing precisely what needs to be done and why, before any repairs are carried out. As current users know, BTC recently launched an improved version of autoVHC – autoVHC v2 – and we’re proud to say that clarity for customers remains a focus for performance. The latest version has enhanced... read more
Pre-registration: why profitability hinges on sales strategy

Pre-registration: why profitability hinges on sales strategy

While pre-registration of new cars is nothing new, its prevalence within the automotive industry has been amplified within recent years. According to news reports from October 2016, up to a fifth of new cars in the UK are now estimated to be pre-registered to dealers. It’s a contentious topic and one that, for many franchised dealers, paves the way for a variety of business challenges. On the one hand, pre-registration enables dealers to meet the monthly sales targets set by manufacturers and release the bonuses that are important to overall profitability. All too often however, the risks will outweigh the benefits.  First, there’s the obligatory time gap between registration and sale. Legally, dealers must retain pre-registered vehicles for 90 days before selling them on meaning significant amounts of revenue are essentially ‘locked up’ for three months. Then there’s the negative effect that pre-registration can have on the sale of brand new stock. For many customers, being able to buy a showroom-fresh car with minimal miles on the clock at a heavily discounted price is the more appealing option, leaving new car sales facing a challenge. Likewise, the generous offers on pre-registered vehicles can have a knock-on effect on the value of used stock, driving it down even further. As CAP have stated, oversupply among nearly-new cars may ‘ripple down’ through the other age bands as older cars devalue to remain competitive on the forecourt. Ultimately, when supply outstrips demand dealers are the ones who are left to suffer. Making pre-registration work If poorly managed the entire pre-registration process can spiral out of control and damage retained margins. In order... read more
Bodyshop business is up – now dealers need to build on the momentum elsewhere

Bodyshop business is up – now dealers need to build on the momentum elsewhere

According to research carried out by ABP, almost three-quarters of bodyshops have seen an increase in repair volumes this year and are expecting business levels to continue to grow throughout 2017. As revealed by AM Online, the organisation’s annual study (UK Body Repair Industry Economic Climate report) shows that 74% of respondents have reported an increase in business over the last 12 months, including bodyshops associated with franchised dealers, with more than two-thirds also reporting an increase in their pre-tax profits. Interestingly, this demonstrates a huge turnaround from ABP’s inaugural report in 2011 when only 19% of respondents declared an improvement to profits. This is good news for the industry, particularly given the ‘Brexit-effect’, which has left many sectors with concerns over consumers tightening their belts and what this would mean for business levels. It’s a welcome change to see an air of optimism amongst automotive bodies. Indeed, ABP’s report picked up on this with the statement that “72% of bodyshops are expecting to increase their business levels in the next year, with just 2% expecting a small fall in business”. Of course, while it’s nice to enjoy healthy business levels, they can never be taken for granted. Whether it’s car body repairs, servicing or tyre sales, managers should always work towards improving the customer journey and maximising income opportunities. With that in mind, here are our top three tips for boosting performance, in both bodyshops and elsewhere in aftersales departments:   Embrace technology Choosing the right systems and tools, and applying them to aftersales, can make a huge difference to overall profitability. The use of electronic vehicle health... read more
Disrupting the disruptors: why traditional sales models still have a place in the digital age

Disrupting the disruptors: why traditional sales models still have a place in the digital age

The vast majority of today’s new car buyers rely on the internet to inform every part of the buying process. Seemingly, there’s a wide held belief that the sale is all but finalised online, with the visit to the showroom a mere formality. In line with the rise of the well-informed, self-serving customer the industry is now under pressure to shift the retail model away from the traditional car showroom to something a little more ‘fitting’. An interesting example of this can be found with Rockar and its collaboration with various brands, including Hyundai and Jaguar Land Rover, to create, as proclaimed by its creators, a ‘novel way to shop for new cars’. Developed by Simon Dixon, the Rockar concept ‘challenges the traditional car buying process in every way possible’. Consumers are firmly in control and can complete the entire journey online, from selling their old vehicle to choosing a finance option, without even speaking to a representative. Alternatively, car-buyers can visit a next-generation store, or ‘auto boutique’, situated in their local shopping centre. In suitable futuristic style, Rockar stores don’t have a large selection of vehicles on display; a couple of models and a fully immersive digital experience is all that’s required. And this brings us to the first key feature of Rockar’s approach: the ‘non-sales’ sales staff. As described on the website: “In store we have our Rockar Angels, who are car product superbrains and certainly not sales people. Chosen on personality…Rockar Angels won’t make it all about the sale, they are just simply there to help”. Another key difference between the Rockar approach and more traditional... read more
Poor sales lead management –the problem persists

Poor sales lead management –the problem persists

Earlier this year we carried out some research into customer engagement and dealership management of the customer journey – specifically the level of contact following an initial customer enquiry. Our data revealed some very interesting insights. From questions posed to 2,500 consumers, analysis revealed that 35% were still searching for a car, despite having been flagged up as ‘lost sales’. This undoubtedly points to a degree of lethargy on the part of dealers, yet it seems the problem was more deeply rooted than a neglectful approach to data input. Our data indicated that dealers were falling short in four key areas of the sales process: the test drive, part-exchange appraisal, financial advice and follow-ups. In short, customers were being allowed to leave the dealership without having gone through any of the processes that might have allowed them to gain a rapport with the sales staff or add some impetus to make a purchase. Although this initial research was carried out over six months ago (based on statistics for Q4 of 2015), recent reports suggest many dealerships are still failing to recognise the need for, or indeed adopt, a process driven approach to sales. Just a few weeks ago, MotorTrader highlighted how often many seemingly ‘lost’ customers do not hear back from sales staff as a result of their original enquiry. To gain a clearer picture of dealership behaviour, we decided to replicate our lost sales analysis using data from May – September 2016 and a larger sample size of 9,685 customers, drawn from UK visitors to two prestige brands. Worryingly, the figures show continued poor performance when it comes... read more
Driving revenue for aftersales: Introducing autoVHC v2

Driving revenue for aftersales: Introducing autoVHC v2

BTC are pleased to announce that an upgraded version of autoVHC is now available for customers. As current users know, our autoVHC software aids technicians during the service process, enabling red and amber work to be identified, logged and presented quickly, consistently and professionally in order to enhance the customer experience and increase parts and labour sales. Indeed, since 2007 the solution has helped generate more than £750 million in incremental service business for franchised dealers worldwide. Our latest version of autoVHC –autoVHC v2- builds on this functionality through a number of key enhancements. For example, the software incorporates a new technician mobile app featuring in-built video and photo compression, which allows for improved media uploads. We have also introduced a performance dashboard to enable managers to monitor activity within aftersales departments. Crucially, users will be able to configure their own targets and use these to evaluate business performance for key metrics such as the average number of vehicle health checks performed, vehicle health check completion rate and the average percentage of red work sold per vehicle health check. As discussed in a previous blog, the typical service department makes up 50% of a dealership’s overall profits; it’s important that General Managers and Dealer Principles are able to scrutinise aftersales activity to ensure revenue opportunities are not being missed. With enhanced functionality, we’re confident that the new software will make it easier for managers to assess overall performance and implement improvements to business processes where needed. Other key features of autoVHC v2 include: New stable data centre environment -ensures greater system reliability Real-time sales process monitoring -simplifies the identification... read more
3 steps to avoiding a used car sales backlog this autumn

3 steps to avoiding a used car sales backlog this autumn

It’s less than a month to go until the launch of the new 66 plate and the signs are looking positive for healthy sales figures. Indeed, recent reports  indicate new car registrations have risen 0.1% to 178,523 units in the month of July, despite uncertainty caused by June’s Brexit vote. As Sue Robinson, director of the National Franchised Dealers Association commented: “many dealers have experienced an improvement on retail demand in July compared to the immediate post Brexit situation. The UK remains a large market for the EU and performance for the year ahead is expected to be in line with market expectations”. In the run up to September 1, many sales teams will offer tempting deals for trade-ins in order to encourage customers. While this may help to give new car sales an extra boost, a flurry of activity during August and September can often have repercussions further down the line when it comes to used car sales Once into October and November, many dealers find themselves left with a backlog of used cars; a combination of existing used stock and the new crop of trade-ins. This is far from an ideal situation, especially as used car sales traditionally slow down in the run up to Christmas. So, how can dealers solve the backlog conundrum? Really, it all comes down to careful forward planning in a few key areas. No time like the present As well as pushing new vehicle sales, August should be a time to address existing used car sales. It sounds obvious, but it’s important to sell what’s already at the dealership and keep the... read more