More than an afterthought
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It is a constant battle to stop operators defecting to non-franchised workshops once the vehicle is out of warranty
Words: Steve Banner Boosting aftersales revenue in what
remains a tough economic climate is a challenge for franchised truck dealers, but it is one they have to rise to if they want a healthy long-term future. In particular, they have to ensure that operators do not drift off to independent non-franchised workshops once the vehicle concerned is outside its warranty period or in the hands of the second or third owner.
That involves putting together cost-effective maintenance packages that do not bust the customer’s budget, says Russ Warner, aftersales director at West Bromwichbased Scania dealership Keltruck.
“For example, we offer a lot of ixed-price repairs, such as clutch replacement, that work out cheaper for operators than buying the parts over the counter and doing the job themselves,” he says. “Something else we do, where appropriate, to keep costs down for customers is to it recycled Scania parts instead of new ones.”
Second-hand spares
These second-hand spares have been removed from trucks earmarked for disposal and can be reused without compromising safety.
Keltruck, which has 21 depots, sells more than £1mworth of these annually. They tend to be bought by budget-minded hauliers who do not buy new Scania parts if they can possibly avoid it and as a consequence they represent useful extra business for the dealer.
“We’ve gone the menu-pricing route and offer recycled parts too,” says Robert Spittle, MD of truck operations at Iveco dealership Guest Group. “Aftersales is where the proit is and we’ve got to get rid of the mistaken perception that franchised dealers are expensive to use.” Representing Iveco across the West Midlands, the East Midlands and north Wales, Guest acquired Sherwood Truck & Van earlier this year.
Dealers wishing to retain customers have to offer as many services as they possibly can at one location. That way, the operator has no reason to go elsewhere. Based in Berkeley Heath on the A38 in Gloucestershire, Isuzu Truck dealer Collett Transport Services (CTS) is also an agent for Wabco, Knorr-Bremse, Edbro, Farid and NTM, says director Andy Collett.
“We’ve recently become an Isuzu pick-up dealer too and we’ve just taken on responsibility for Isuzu truck sales in Bristol and Bath as well as Gloucester,” he says. “In addition, we run a big hire leet of around 130 municipal vehicles.” Keltruck runs accident repair and reinishing operations at its Newark and West Bromwich sites. The latter is also an Authorised Testing Facility (ATF), as are the company’s Burton-on-Trent, Worksop and Cardiff depots, and they are not short of customers wanting annual tests.
As well as providing a muchneeded service, an ATF attracts hauliers to the site who might not have gone there otherwise, and has the potential to generate spin-off business for the workshop.
Workshop managers like to know, with a reasonable degree of certainty, weeks and months ahead how much work will be coming through their doors.
Contracts
Maintenance contracts make forward planning much easier because they mean that operators are guaranteed to come back to the dealership for service work for several years to come. They help make running costs easier to predict, but they can be dificult to sell in uncertain times, says Warner.
“Not all customers want to make the commitment,” he observes.
Collett homes in on something else truck dealers must do: publicise themselves at every opportunity.
This year, CTS has become the main sponsor of the Bristol International Balloon Fiesta, which has resulted in acres of publicity for the dealership’s logo. Collett has acquired a balloon and is about to become possibly the only dealer principal in the country to hold a balloon pilot’s licence.
CTS runs its own waste management show at its premises. “It’s a bit like the show held by Londonderry Garage at Northallerton,” he says.
“Exhibitors at the most recent one that we organised included Mercedes-Benz, Dennis Eagle and Terberg, as well as Farid and NTM,” he continues. “There were 36 stands and we pulled in exhibitors from as far away as Chesterield.” Running a leet’s workshop on its behalf can be a useful source of revenue for a dealer.
As well as allowing the operator concerned to cut costs and tap into the dealer’s expertise, it potentially gives the dealership an extra location that can help it offer better coverage of its area. If it is permitted to use the site to look after vehicles run by third parties, as well as those of the leet concerned, then that generates extra income and helps both the leet and the dealer keep costs down.
CTS looks after vehicles for Morrisons and runs out-based facilities at the retail giant’s locations in Droitwich, Swindon and Willand, not far from Tiverton in Devon.
Replacement work
“Morrisons is, however, opening a big site at Bridgwater, which means we’ll have lost all that work by early next year,” Collett says. “We’re now hoping to take over the running of one or two council workshops given our municipal involvement.” “One thing we do is to act as parts partners for local authorities such as Dorset and Poole,” says Mike Fennell, MD of DAF dealership Adams Morey. That means the Southampton-based irm in effect runs the parts departments for the council workshops concerned.
“Our parts sales overall are better than they were last year, but we’re not doing quite as well as we expected,” he admits. “We’re facing a lot of competition from independent factors and we’re only too aware that a lot of our customers are buying solely on price.” There are ways of retaining parts business however.
“We run a loyalty card scheme for our parts customers,” says Spittle. “We’re planning to use it, not just to reward them for their total spend with us, but for the amount they spend on certain items – air ilters for example – over particular periods of time.” Adams Morey has managed to raise its hourly workshop labour rate, says Fennell, something that by no means all dealers have been able to do. He feels the increase is justiied given the quality of support the company provides and the hike in costs it faces.
“We’ve been under some pressure from big operators to reduce our rates rather than put them up, but at the end of the day we cannot afford to be busy fools,” he observes. “I know of some businesses that have slashed them and are struggling to stay aloat, or are not with us any more.”
He has no intention of allowing Adams Morey to share their fate. ■