While aftermarket revenues could contribute an upward 30-50% of existing revenues, many OEMs are not prepared to gain from it. Most OEMs fail to meet their service level agreement which subsequently leads to decrease in customer loyalty and negative word of mouth. Why does this happen? It is simply because they do not manage their weakest link in the chain, dealers.
The major reasons why dealers fail to deliver an effective after-market service. One is the lack of agency and incentive alignment. Dealers find managing post-sale operations cumbersome and are just happy to skim the revenue from fresh sales only. Many dealers lack the necessary skilled resources, inventory but just gloss over service commitment. Secondly, Lack of comprehensive supply chain management, and ineffective SOPs from OEMs compound the matter further. So it is quite common to see customers waiting for a free vehicle pick up promised by OEM and also an unreachable dealer service desk. Customers planning to drop their vehicles at dealer showrooms and catch their Monday morning work schedule, beware! You may end up waiting in the lobby for hours. Dealers of many world class OEMs are woefully short of qualified human resources. Spare parts unavailability or delay in shipping spare parts is a common problem. Lo, that is not the end of agony, even after getting the vehicle well past the promised delivery date; customer must be prepared to see recurrence of earlier complaints or some new larger issue surfacing after the service.
What is the way out for OEMs? Incentivize service and parts business for your dealer. Invest in basic training and evaluation of dealer staff across after-cycle process. Invest in your own resources not just at sales cycle but at after-service cycle also. Manage parts availability and protect grey market penetration.
If you are a dealer, bring down the walls within your organization. Too many departments working at loggerhead with each other does not help you. Ensure information flow & communication happens seamlessly and data visibility is high. Adopt SOPs as they help you to know the productivity and revenue generation opportunities you may be currently missing. Training and employee engagement is very crucial to effectively gain cost advantage. Drivers, technicians, bay engineers must be incentivized for ownership, initiative and quality of outcome.
Banu Priya P
Junior Consultant – Marketing