Article

The Aftermarket Vs. The Dealer: How To Compete And Win

August 2006, Auto Dealer Today - WebXclusive

by Don Reed - Also by this author

If you are a new car dealer or an independent dealer with a repair facility you compete every day with the aftermarket service facilities in your market area. One would naturally assume that the dealers’ service and parts revenue is continually growing by leaps and bounds because they continue to sell more new and used vehicles. However, the aftermarket has no such source for new service customers, so they must be struggling to maintain market share. Research shows us that, in fact, just the opposite is happening.
Based on the Bureau of Economic Analysis figures for 2004, the independent general mechanical repair facilities generated total sales of about $32 billion. If you add in specialty repair facilities, oil change facilities and transmission repair facilities, the total is closer to about $45 billion in total sales generated by about 79,695 independent aftermarket repair facilities. These facilities serviced more than 216 million motor vehicles including 70 percent (118 million) of warranty vehicles whose owners chose to take their vehicle to an aftermarket service facility for maintenance versus their dealership.
 
According to the National Automobile Dealership Association, approximately 21,650 new car dealers generated about $30 billion in labor and parts sales. Now combine the aftermarket with the dealers and we have a total market volume of about $75 billion in parts and service sales with the dealers getting about 40 percent and the aftermarket picking up a whopping 60 percent. Don’t you think it’s about time for dealers to go on the offense and reverse this trend? Here are some ideas on “How to compete and WIN.”

Train your service advisors to meet and greet your customers in the service drive with a smiling “Good morning, afternoon or evening”. Go to the vehicle with the customer and conduct an interactive walk-around of the vehicle looking for needed maintenance along with a maintenance menu showing recommended maintenance based on time of ownership and/or mileage. Inspect all fluid levels and make additional recommendations based on what you see. Then train your advisor to inform the customer that your technician will perform a courtesy inspection of their vehicle at no charge, which will help keep their vehicle in like-new condition and maintain their warranty. They need to allocate 15 minutes per customer to complete this process.

Next, train your advisors to include something at no charge on every repair order. Some examples would be: check all fluid levels at no charge, wash vehicle at no charge, check tires at no charge, 27-point courtesy inspection at no charge, inspect air filter at no charge, etc. Many dealers are already performing these services, but they don’t train their advisors to print them on the repair order as NO CHARGE. The aftermarket does!

An active delivery of the vehicle by the advisor back to the customer is essential to ensure effective communication between the customer and their advisor. A thorough review of the three C’s will provide the customer with a clear understanding of what was diagnosed and how it was corrected. Additionally, after a review of the maintenance performed on this visit, the advisor can now make an appointment for their next scheduled maintenance. Make certain the customer’s vehicle is brought to the customer, which means that you should never hand the customer their keys and point them toward the parking lot.

If you have your advisors repeat this process 100 percent of the time with 100percent of your customers, this is what happens:

Sales per repair order will go up a minimum of $50 per RO

CSI will be the best it has ever been

Customer pay repair order count will increase by a minimum of 10 percent per month

Customer retention will improve dramatically

Service absorption will move toward 100 percent

New and used vehicle sales will go up

The dealer gets a higher ROI (Pay raise!)

This is all about being different! You must exceed the customers’ expectations! You have to build value in the minds of your customers in order for them to continually choose to return to your dealership instead of going to the aftermarket. Remember there are 79,695 aftermarket choices available to your customers, while there are only about 21,650 dealership choices. The aftermarket is more convenient with almost four times the number of locations that are open usually seven days a week, offering more available hours per day. They will be happy to service your customer’s vehicle “today” or “tomorrow.” The aftermarket is all about convenience! How does your dealership measure up? There is a $45 billion market out there. Why don’t you get your share, now?! You can compete and win.
“BIG THINGS ARE ACCOMPLISHED ONLY THROUGH THE PERFECTION OF THE MINOR DETAILS”

Vol 2, Issue 9

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

On-the-Point

Jim Ziegler
Objects in the Rearview Mirror

By Jim Ziegler
The past is right behind us and the future is coming fast. The Alpha Dawg plots a course for your store’s success and shares advice for Elon Musk, Johan de Nysschen, and pre-owned managers.

The Big Talent Drain

By Jim Ziegler
The Alpha Dawg tackles the shortage of talent in the managerial ranks and reflects on Amazon’s rumored foray into vehicle sales, the imminent used-car correction, Hyundai’s plan for the Genesis brand, and the untimely passing of Tammie LeBleu.

A Faster Horse

By Jim Ziegler

Strangers in the Mall

By Jim Ziegler

Opening Observations

Over the Curb