What proportion of your new registrations are electric vehicles? How much revenue do you currently generate per workshop visit? And how many of your customers still come back once their vehicle is more than three years old? Anyone who doesn’t know these three figures is groping in the dark. After all, the workshop business has traditionally been the cash cow of the car trade. It loses its substance at precisely the moment when new sales systems start to erode the trade’s profits in the new car business too: the manufacturer sells, the dealership acts as an intermediary. The manufacturer is only indirectly affected by the decline in the workshop sector: it sells fewer parts to workshops, but at the same time benefits from higher vehicle prices. The dealerships, on the other hand, bear the brunt – and have most of the levers for change in their own hands.
The fact that after-sales profits are falling is not a question of ‘if’, but of ‘when’. In Norway, Denmark and Sweden, the proportion of electric vehicles amongst new registrations has already surged in recent years. There, the consequences for garages have long been clearly visible. In Germany, there are significant differences between brands, but the rule is simple: The higher the proportion of electric vehicles among a brand’s new registrations, the faster traditional garage turnover declines.
You should resist the obvious impulse: many garages are increasing their hourly rates – particularly for work on electric vehicles. In the short term, this compensates for the loss of revenue from parts sales. In the long run, however, this leads to a lack of understanding, as customers already believe their electric cars no longer require any servicing at all. The reliable metric is therefore a different one: revenue per workshop visit, multiplied by the number of visits and the length of time the customer remains a customer. This is precisely where the sticking point lies, because
- customer loyalty traditionally begins to decline once a vehicle is three years old,
- when customers switch to supposedly cheaper, independent garages or
- no longer adhere to the recommended service intervals.
There are four measures you can take to effectively counteract this.
Measure 1: Show the customer via video what is happening to their vehicle.
The most common unspoken customer request is: ‘I want to know what I’m getting for my money.’ Invoices, whether on paper or issued digitally, rarely answer this question. Often, it is not at all clear exactly what the mechanic has been working on with the vehicle. A short video, sent digitally whilst the car is still in the workshop, satisfies the customer’s request immediately. The customer can watch the video whenever they like and see on screen what they might otherwise miss at the counter.
From a business perspective, such a video is, above all, a cross-selling and upselling tool. It is far easier to explain a rust spot that the customer can see with their own eyes than to describe it over the phone. Equally important is the reverse scenario: show the brake pads that are still in good condition too. In this way, you build trust, and your customer understands that you aren’t trying to talk them into buying something they don’t need at all. Management benefits in two ways: Customers are more satisfied and turnover increases.
How can you implement this measure?
The workshop management establishes binding process standards and empowers staff to apply them. It is also essential to ensure that the technical solution operates reliably and is integrated into the dealer management system . The success of this measure can be measured precisely: industry-standard solutions break down customer satisfaction and additional turnover right down to the level of the individual employee. This allows you not only to see whether the tool is working, but also who has mastered it and where there are still bottlenecks in the chain of intake, referral and follow-up.
Measure 2: Bundle your services into a subscription.
Tyre changes and storage, a guaranteed courtesy car, discounts on spare parts, and complimentary car washing: Businesses that bundle such services into a monthly loyalty programme report significantly more customer visits per year and around forty per cent higher turnover compared with similar customers who do not use the programme. The model therefore has multiple positive effects: on revenue per service and on customer retention. For customers to accept such a programme, only two conditions need to be met:
- The monthly fee must be noticeably lower than the value of the services included.
- The customer must be able to recognise the benefit of the service subscription at a glance.
The effort involved in implementing such a subscription is manageable. You need
- a technical platform that combines the services and makes them available to customers,
- a CRM system for managing memberships,
- a billing system for managing monthly subscriptions and
- an interface to the dealer management system.
Even better is a service subscription if you also want to offer additional services from external partners such as petrol stations or car washes . In that case, you’ll need to be able to settle the revenue generated from such services with your partners. The good news is that you don’t have to reinvent the wheel. There are already ready-made software solutions on the market that you can use for a subscription model, including a partner programme.
How can you tell if the measure is working?
Record the turnover per workshop visit and the number of visits per year, separately for members and non-members. The difference is your additional revenue. It is the only key performance indicator that justifies the investment. System development and integration usually pay for themselves within twelve to eighteen months at the latest.
Measure 3: Bring the workshop to the customer.
The simpler the maintenance tasks, the less the journey justifies the effort. A mobile service turns this logic on its head: a team of mechanics with a fully equipped service vehicle carries out the work in the company car park, on the building site or outside the customer’s garage – right down to an oil change. You can offer this service either free of charge or at a price that reflects the time saved for the customer. It is particularly appealing to drivers of electric vehicles and to companies whose fleet must be constantly available.
You benefit from a mobile workshop service beyond the individual job. Your catchment area expands beyond your current radius, customer loyalty to your specific car dealership increases, and competition within your own brand becomes less intense. Added to this is a selling point that rarely features in job adverts: The profile of a mobile service technician appeals to staff who no longer want a traditional workshop job and value the freedom of working independently.
How can you implement this measure?
For this approach to work, management must invest in
- a suitable service vehicle,
- software for booking appointments and route planning,
- a smooth supply of spare parts,
- on-site payment options and
- a tool for measuring customer satisfaction after the job.
In addition, technicians must be trained in customer service. In the workshop, they do not usually have direct contact with customers, as this is the responsibility of their colleagues in the service reception area. For a successful mobile workshop service, technical and interpersonal skills must therefore go hand in hand. This is by no means a given.
How can you tell that the measure is working?
When evaluating the mobile service, treat it as if it were an additional service bay: number of jobs, turnaround times, turnover, and additional revenue from cross-selling and upselling. According to existing business cases, it becomes economically viable from as little as two to three customer orders per day. The prerequisite is that the route is planned at the start of the working day and the vehicle is stocked with spare parts – including typical additional items such as windscreen wipers. Anyone who sets off without this preparation loses their margin on the road.
4. Measure: Put together service packages centred on batteries, tyres and charging.
With electric vehicles, the focus of servicing shifts to the battery. A regular battery health check, together with measurement of battery efficiency, is therefore an obvious bundle. This not only allows you to generate revenue. For lease returns and used car purchases, such a check simplifies pricing.
However, the battery is not the only wear-and-tear part. Because the brakes are used less frequently, they can corrode or cease to function properly. Axles, air conditioning and heat pumps need to be checked regularly anyway. The regular wheel change , including storage, is one of the strongest customer retention tools there is. This service combines well with battery and wear-and-tear packages.
Charging management is a product category in its own right: Wallboxes, charging cables and charging software must be checked regularly. Here, too, the key strategy is the subscription model: a BEV Mobility Package with monthly or annual payments. For vehicles past the three-year mark, we also recommend specially configured spare parts packages at more favourable prices – precisely where customer loyalty traditionally begins to wane.
How can you implement this measure?
The good news is that you already have almost all of these services in-house. The challenge lies in intelligently bundling the individual services, setting competitive pricing and actively marketing the bundles.
How can you tell if the measure is working?
The measure of success here is not technical, but sales-related: monitor the sales rate per service adviser, set clear targets and, where necessary, use incentives. Without targets, you can neither control nor measure market penetration.
Take action now!
Not all the measures outlined require investment. To lower the barrier to visiting a workshop, you can adjust four further factors without purchasing new systems:
- Simple appointment booking process, accessible both in person and online
- Digital pre-check-in: The customer fills in a form themselves before dropping off the vehicle
- Pick-up and drop-off service
- Fast-lane check-in for customers who are in a hurry and willing to pay for priority treatment
Each of these tools contributes to the same objectives as the four major measures: more service cycles and stronger customer loyalty.
Without commitment from senior management, measures remain ineffective
Due to electromobility, a garage is losing around a third of its service and maintenance turnover, and the proportion of electric vehicles will continue to rise. These losses cannot be offset by higher hourly rates, but rather by higher revenue per service, more services per year and longer-term customer loyalty to your business. Video messaging, loyalty programmes, mobile workshop services and BEV packages all contribute to precisely these three factors.
Whether these measures are effective is not determined at the time of their introduction. Their success depends above all on management’s commitment: senior management must discuss these issues in meetings, monitor the relevant key performance indicators and use them to make the right decisions. Anyone who launches such programmes and then simply lets them run has invested, but has changed nothing.
