Why aftersales should never be an afterthought

Welcome back, and best wishes for 2022!  At present the new year looks pretty much like the old year, but we can only live in hope that the coming months will see our way out of Covid impacts on us all personally and professionally, and chip shortages specifically on the new and used car markets.  As I look at our research programme outputs for the coming year, there will be more on sales networks, a major output on used cars, updates on the Block Exemption Regulations, and much more.  However, we have some significant aftersales-related outputs coming as well.  Amongst other things, we will be updating our projections for the market development to 2030 for both repair and maintenance and crash repair, and looking at how market shares might shift between the franchised and independent sectors.

Despite aftersales being a major profit generator for both car manufacturers and dealers – sometimes making up the majority of profits – it is often treated as the ‘poor relation’, as an afterthought.  The more glamorous sales side of the business gets the limelight, and the top jobs rarely go to people from the aftersales functions.  Given the challenges of delivering an excellent experience to drivers and repairers in aftersales, that positioning is arguably unfair.  The individual requirements for aftersales are more variable, the potential for the unexpected surprise is greater, and in the case of workshops and bodyshops, the need to maintain utilisation across the different skills and facilities is key to success.  For the franchised sector, aftersales customer satisfaction is also an important driver of loyalty to the dealership for future sales.

I was reminded of this when I took my son’s car in for the annual MOT (roadworthiness) test.  This is the first and only car he has ever owned, now twelve years old, and for the last nine years has been serviced by an independent garage, Jackson & Phillips, close to where we lived at that time.  We have moved house twice in the intervening years, but remained loyal to the same repairer despite an increased travel time.  It is also the same garage that I have used for other cars on the ‘family fleet’ including for tyres on younger cars, so I have had a longer relationship with this repairer than I have had with any franchised dealer.  When I was there in December, I noticed that they had just won a national award from Aftermarket magazine for the ‘Top Garage’ nationally in the category for over 10 employees.  I knew how I felt about them, but admit I was surprised to see their performance validated in this way.  I therefore thought about what they do well, and how it compares to other repairers in my experience.

Perhaps the most important is that whatever job they do, they do well and have always delivered a first-time fix.  This ranges from diagnostics on younger vehicles to work on my 50 year old classic.  I never had my Tesla serviced anywhere, but they were early in building the skills to work on high voltage systems, having a number of Mitsubishi PHEVs on their books four or more years ago.  They brought tyre-fitting in-house over ten years ago, and recently tried offering smart repair through an on-site contractor.  Their costs are reasonable – labour rates are not the cheapest, but are slightly below the local average, and they always look at repair vs replace and alternative OE-quality parts to find the best solution.  Tyres are priced within a few pounds of the cheapest available, typically delivered within a day by Stapletons, one of the major UK wholesalers (also used by many franchised dealers and OEM tyre schemes) and they are an approved fitter for the leading online tyre retailer, Blackcircles.  They have access to multi-brand repair and maintenance information through their garage maintenance system providing information straight to the technicians through individual iPads.  Follow-ups for ‘amber’ work and MoT anniversaries are timely.  They are registered on the dominant 1link platform to carry out work for fleet customers at agreed rates.  Premises and the customer waiting area are tidy and presentable, without being excessive, and they offer a collection and drop-off service from the local railway station.  They offer menu pricing at three levels, and for those customers who need it, they have a fix now, pay later, deferred payment scheme.  When Covid struck, they closed for six weeks, then reopened with comprehensive measures in place and used to protect staff and customers.  In short, they have looked at all the levers they can pull and taken action.

They are not only a good example for other independents but serve as an example of the comprehensive ‘no stones left unturned’ approach that it will take to win in the increasingly competitive aftermarket that we face in the next few years.  Service and repair operations per vehicle per annum will decline due to technology change and reliability improvements.  Crash repair volumes will drop due to ADAS effects.  Repairers will need to keep up to date with the technology changes in order to be able to retain their existing customer base, and potentially win new customers from other repairers who hold back on the needed investments.  As dealer networks are restructured, many of those who are terminated will enter the independent market, and existing smaller independents will professionalise by joining one of the franchise networks to access virtual scale.  Repairers like Jackson & Phillips will win in this environment.  The same is not guaranteed for anyone in the aftersales business who is asleep at the wheel.