Vehicle Health Checks key to incremental profits in 2012
Vehicle Health Checks are proving to be the key tool for generating incremental franchise dealer profits in 2012, according to new findings by leading dealer management software specialist Pinewood.
The company says that from research covering its own franchise dealer user base, VHCs have been found to be more effective than any other aftersales tool – such as warranties and service plans – when it comes to increasing margins.
Neville Briggs, managing director, said that the finding was unsurprising but underlined the importance of VHCs in an aftersales market that continues to be extremely tough.
He explained: “A VHC enables a dealer to potentially extract the most potential profit from any vehicle in their workshop by ensuring that they take a structured approach.
“Of course, this is not just about profitability but also provides a high level of service to the customer by providing them with a comprehensive picture of their vehicle’s condition. The use of VHCs has now reached a point where most customers expect to receive one when their vehicle enters the dealership workshop and appreciate the information that it provides.
“VHCs should not be seen as a cure-all for dealer aftersales profitability – other tools such as warranties and service plans remain very important – but they can be the keystone.”?
Briggs added that a properly managed VHC sales and marketing programme could ensure that the dealer maintained a relationship with the customer over months and years.
He said: “A VHC lets the dealer build the relationship almost seamlessly over time. On a particular car, if they have found that the brake pads will be worn in roughly six months, then they can contact the customer and warn them at that time. Then, they will have the opportunity to carry out another VHC and perhaps find further work that the customer may consider.
“At a time when dealers are placing strong customer links at the top of their agenda, a VHC enables them to show the customer exactly how strong their aftersales care can be and help them to keep their vehicle in the best condition.”?
Pinewood added a VHC system free of charge to its Pinnacle dealer management software at the end of 2009 and has achieved a very high rate of penetration among dealer users.
Briggs continued: “In most cases, the additional profits generated by using the Pinnacle VHC are, in effect, paying for or exceeding the entire monthly charge that we make for using the DMS at a particular dealership. They can be an extremely productive tool if used in a structured and disciplined way.
“What we have found is that, over time, the dealer becomes better and better at using the VHC and that margins rise.”?
About the Pinnacle Vehicle Health Check
The Pinnacle VHC allows technicians to gather information about each vehicle reviewed in the workshop either on paper or direct on a workstation into the DMS. For further enhanced functionality and ease of use, Pinewood offers optional integration via an iPod Touch or similar handheld device.
Service desk staff are then prompted by Pinnacle to check with the vehicle’s owner whether the work identified by the technician can be carried out. If accepted, it is automatically added in the DMS to job cards and parts ordering.
Pinnacle customers are familiar with unrivalled reporting functionality, with VHC providing detailed reporting analysis allowing dealer managers to track the results of using the system, and act upon the new rich data source.
Briggs underlined the advantages of using the Pinnacle VHC compared to the standalone, third party vehicle health check systems that are often used by dealers.
He said: “These third party systems rarely integrate fully with each dealer’s DMS system, if at all, and obviously cost more to use than adopting the Pinnacle VHC. The advantages for existing customers in using our system are obvious.”?