How can dealers identify revenue and performance wins in a cooling market?

A buoyant period for the automotive sector, of strong used values, price increases and busy workshops, has passed and it’s time for dealers to maximise all revenue opportunities by focusing on the basics – and using all the data available.

CitNOW’s presentation at Automotive Management Live 2023 used findings from a survey sent to more than 1,000 UK dealers, plus its ‘real insights’ BI tool to compare market data with dealer data.

Aftersales

The CitNOW dealer survey revealed 70% of businesses were not maximising aftersales opportunities down to the impact of the cost of living crisis on consumer spending, increasing business costs, problems recruiting technicians and the growth in the EV parc.

But the top performers managed to improve their performance throughout 2023, increasing red work conversion 11% quarter on quarter to 63%, compared to an all-respondent average of 49%.

Technician utilisation has improved 10% also, up to 92.8%, compared to the survey retail average of 81%.

“We believe this extra performance is worth about £170,000 per rooftop per annum,” said Oliver Parsons (pictured right), director of customer success UK, CitNOW Group.

Factors that led to this success included:

• Getting the EVHC completed as soon as the car is in the workshop so by the time the car is on the ramp there is an improved chance the customer has approved the highlighted work. Improving technician utilisation can add 377 more jobs to a workshop in a year - £125,000 of extra service and red work
• Monitoring the technician completion rates of electronic vehicle health checks (EVHC). For top performers it’s more than 95% compared to an average of 87%
• Tracking if a video is included with each health check. Including a video leads to an 11% increase in conversion
• Measuring how long a technician spends on an EVHC. The “sweet spot” is 10 – 15 minutes
• Checking service bookings are being made at the right time of the week? Mondays are the best time with 31% conversion on outbound calls, compared to 19% for Thursdays
• Analysing the reasons why customer are declining suggested work. 38% of declined work in the CitNOW dataset didn’t cite a reason
• Ensuring your systems are integrated. Can you get parts and tyre prices quickly with little or no delay in logging into multiple systems.

Sales – stock strategy and lead generation

The top performing dealers in the CitNOW survey were doing the following:

Analysing the age and mileage of their stock, constantly comparing it to the rest of the market

Tracking vehicle desirability and customer buying trends to inform stock choice

Having a target turn rate for stock, and identifying vehicles that fall outside it

Analysing make and model mix and key differentiators in vehicles that could be affected by market fluctuations.

Callum Wood (pictured left), group sales director, CitNOW Group, said that in analysing the data from its ‘real insights’ platform, 78% of vehicles needed “some type of price attention when compared to the market data”.

“Some of this could be pennies difference or a few pounds. But in some cases the differences can be quite significant. We found that typically 40% of stock needed a price adjustment of more than 2%, up or down.”

CitNOW worked with a retailer to introduce a stock strategy. It measured days in stock and gross profit per unit (GPPU).

“After the stock strategy had been introduced and refined, the GPPU increased by £250 per vehicle. But also, the days to sell for each vehicle on average reduced by 25%.

Lead management

Looking at the data CitNOW holds and retailer feedback, there are four areas to focus on:

1. Photography – ensure consistently high-quality images with each vehicle with a process to achieve it quickly and efficiently. Having helped a major dealer group introduce a consistent image policy, it saw a 74% increase in website visits and a month-on-month increase of 1,000 leads.
2. Video is a “key differentiator”, making a difference to the quantity and quality of enquiries in response. Including a video with an online ad reduced days in stock by an average 35%
3. Communication – give customers a choice of channels from a contact form to live chat, WhatsApp, SMS or an app
4. Create a “seamless journey from enquiry to first contact to purchase”.

Wood said 24% of enquiries come outside of working hours.

“Having a system in place to manage evening, bank holidays and weekend enquiries is really important.”

> Join us at Automotive Management 2024 on November 13. Register your interest.