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Disruptive technologies may be seen as a threat to many car dealerships. Yet if you can embrace innovation, it unlocks ways to improve your service offering and increase your customer lifetime value.

Car dealerships are feeling the pressure, with car sales falling 6.8% in 2018 - the most since the financial crisis. The industry is not only contending with manufacturer margin squeezes, but the buying process is becoming increasingly digitised as customers move online to research and buy cars, seeking simplicity and transparency.

As new car sales decline, the key to unlocking new revenue streams will lie in improving your service offering. We look at some of the ways new technology can help you win and retain business.

1. 24 or 48 hour test drives without risk, through innovative fleet management

By the time a customer visits your dealership, they are ready to experience the car they have researched. Test drives have the ability to make or break a car purchase - something every car salesperson can attest to. But, a quick run around the block can’t provide customers with the level of insight they need to make an informed decision. They want more and for those in the prestige car market, it’s even more important.

However, extended test drives can carry risks. If you don’t protect your demonstrator fleet - from even basic driver checks and insurance, to dangerous driving and even vehicles being stolen. Only recently, the papers reported on a student that posed as a football manager to persuade dealerships to part with high-value cars on extended test drives but never returned them.

The technology: The latest fleet management software and connected in-vehicle devices don’t just track vehicle whereabouts, but can track the driving behaviour during test drives and even record valuable information regarding any incidents, should they occur. This means that you can ensure the driver is who they say they are with real-time DVLA checks, your Motor Trade policy is protected with the right day-rate insurance and should the worst happen, you can prove who was responsible for an incident.

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2. A better courtesy car experience

For dealerships looking to improve aftersale revenue, offering a great courtesy car experience is key. After all, for many motorists, having access to a replacement vehicle while their own is in the shop is more than just a nice-to-have - it’s essential.

By the same token, issues with delays or restrictions on the use of a courtesy car - or if the car itself is a poor or impractical substitute for their own - can contribute to customer attrition.

Many dealerships struggle to deliver this great experience due to resource pressures, as well as the cost of day insurance for courtesy cars due to the risk of damage, vandalism and theft, and the general lack of visibility into how those cars are used.

The technology: Car dealerships are starting to use fleet management software for their courtesy vehicles that can provide real-time driver behaviour tracking and so reduce their day insurance outlay.

3. A fully integrated customer journey – Pre and post sales including Accident Aftercare

“Potential midterm goals could include offering a seamless, digitized experience along the entire vehicle purchase and ownership experience to create stickiness and link shoppers to the dealership.”

Customers want ease, convenience and transparency of what is happening with their vehicles. If you can provide a one-stop shop for sales, services, courtesy cars and accident management assistance then you are best-placed to win this business.

And that business is growing: as McKinsey & Company reports: the combined “do it for me” maintenance-service and aftermarket-parts profit pool will grow from about $40 billion to between $42 billion and $46 billion in 2030.

However, if you’re like many car dealerships, you feel ill-equipped to fight with the big industry players to offer these services.

The technology: Car dealerships are turning to outsourced business models, where replacement vehicles, service bookings, replacements vehicles and even legal services can be provided under one roof. Some providers can provide ‘white label’ products, allowing you to brand this service as part of your overall offering.

Car dealerships need to rapidly revamp their service offering if they are to win and retain new customers and maximise their lifetime value. But for those who can do so, the digital disruption can be turned from a threat into an opportunity.

At AX, we offer a range of fleet management services to help you Manage, Connect and Protect your vehicles so that you focus on providing a best-in-class customer experience. And should the worst happen, we offer your customers a full Accident Aftercare solution on your behalf.


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