The battle for the biggest slice of the after-sales market is certainly heating up. Kwik Fit and Halfords (who recently acquired Nationwide Autocentres) are offering very competitive servicing deals and car dealers are, quite frankly, struggling to compete.
The notion has always been that franchised dealer servicing is much more expensive, but worryingly for some customers there doesn’t always seem to be any uniformity when it comes to making price comparisons.
We recently encountered a service manager whose dealership is part of a group in the midlands area who told us that one of his customers, when asking for a quote on a 40k service was given a price by him which was £60 less than another of his branches. This obviously undermines the integrity of the business but also makes suspicious customers lose confidence in what they are being told.
The important thing we believe is that customers want and deserve transparency, they want a quoted price for the work they want carried out and they want to pay what they have been quoted, which is often sadly not the case.
It is no wonder that customers, who reluctantly have to use main dealer servicing whilst their warranty is in force but as soon as the first MOT is due they revert immediately to the perceived ‘Fred in the shed’ operation, who are likely to be far more flexible with pricing and often have much lower overheads.
So the challenge for franchised after-sales operations is to maybe speculate a little. Give up some margin to gain more volume and present the extras they can offer such as courtesy cars and valet facilities or collection and delivery to offer a premium service which the customer appreciates but with an invoice at the end of the process that doesn’t reduce the recipient to tears.
Of course as the new car market shrinks there will be less late plate cars to be maintained so dealers who capture drivers of 3 year plus cars are more likely to eventually acquire the car back when the customer upgrades.
The theory is that if the car has been properly maintained, and has been enjoyed by the customer, who in turn has confidence in the brand and the dealer, he is far more likely to have loyalty to the product and the dealer who has worked hard to deliver a value for money experience.
Not really that difficult, is it?