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Protecting Aftersales Revenues in the Connected EV Future

Impact of EV on the after sales revenues

The advent of Electric Vehicle engines (EVs) and the growth in the connectivity of vehicles has implications for the profitability of franchised motor dealerships. In the conventional business model, dealerships are reliant on routine and relatively predictable aftersales and part sales activity for optimising dealership net profits. However, a fully electric car does not need service and maintenance like a car with an internal combustion engine does - there is no oil to change and there are far fewer moving parts. How will EV affect the aftersales revenues? EVs have less wear and tear, less servicing requirement, less warrantable repairs – all representing a reduced opportunity for aftersales revenue and the challenge for motor dealers will be to find replacement revenue streams. However, reduced traditional service revenue opportunities may be offset by improved customer retention rates, which would have a positive impact on aftersales revenue and net profits. Improvements in customer retention is proven to improve dealership profitability.

How will EV affect the automotive after sales revenues?

What about impact of EV on the after sales revenues? Advances in engine technology, changes to mileage service intervals, refinements to fuels and lubricants, a technologically evolving hybrid engine market and the huge advances in the connectivity of vehicles have already led franchised dealerships to develop new strategies for optimising aftersales business. The increase in consumer demand for full EVs has accelerated this even further and maximising service customer retention is more important than ever before. Thus, seasonal health checks, menu price servicing and special offers, once textbook examples of innovative marketing strategy, are now giving way to targeted, smart upselling of personalised products and services and this will become the routine aftersales activity of the future. How to protect EV's after sales revenues? Targeting products and services to a particular vehicle and owner increases the likelihood of success with upselling. In addition, personalisation of communications (emails, SMS) helps to ensure customers feel special and valued by the business. It is much easier and more cost effective to sell more to existing customers than to increase the number of new customers. Dealerships should be doing both, but the former approach is widely regarded as an effective means to retain customers and promote repeat sales of product and service. If it is operating correctly, an increasing number of customers will return to the dealership to replace their cars and will return to ‘service’ them there too. This core principle will remain unchanged in the new product frontier which comprises EVs and connected vehicles. It is therefore vital that dealerships measure and analyse customer retention, a complex task in the absence of data analytics. The RWA Service Retention dashboard illustrated in Figure 1.0 below is one of the key Business Intelligence (BI) tools which provide customer retention information in real time. These BI reports provide insights into vehicle throughput, vehicle fall-off and customer retention rates across all brands, and on new and used vehicle sales. What about protecting after sales revenues from EV?

Figure 1.0 Real World Analytics Customer Retention Report

Impact of EV on the after sales revenues

Protecting after sales revenues from EV

The ability to upsell is an important skill when dealing with vehicle service requirements, and more so now, with EVs and connected vehicles and a focus on personalisation of the customer journey. The identification of upsell opportunity and the analysis of data around this is critical for success. How to protect electric car after sales revenues? Existing dealerships who may be struggling with the offset in service activity should ensure that they are future-proofing their business by creating windows of opportunity. Such upsell opportunities will include battery testing and recharging, high voltage electric cabling checks and works, tyre replacement, windscreen wiper replacement, suspension checks, brake checks, steering checks, wheels and lights and all associated works, as well as manufacturer-led campaigns; but the personalisation of offerings will be an important component of the success of this strategy.

The RWA Vehicle Health Check (VHC) Summary dashboard illustrated in Figure 1.1 below is a BI tool which assists dealership aftersales personnel with the identification and analyses of upselling opportunities. It provides key insights on workshop throughput analyses, the conversion of sales opportunities across the amber and red categories of identified works and a dynamic pipeline view of deferred opportunities.

Figure 1.1 Real World Analytics VHC Summary Dashboard

How will ev affect the after sales revenues

How will EV affect the after sales revenues? BI tools based on data analytics provide dealerships with insights about what motorists need and when they need it, and it will direct how dealerships adapt their operations to respond accordingly. These tools are key to matching the right consumer to the right experience, and so, presents dealerships with genuine opportunities to meet customer preferences. The insights provided by RWA BI tools help dealers make their service offerings cost-effective and efficient, while optimising parts stock levels to meet customers’ needs in a timely manner. Furthermore, dealerships which also incorporate personalisation of targeted offerings will protect customer retention, after sales revenues and ultimately the profitability of the dealership.

About Real World Analytics

Real World Analytics provides a cloud-based Business Intelligence (BI) solution that helps you become a complete data-driven dealer group. By bringing all your data into one place and delivering actionable insights to different levels in the business, everyone has the right information at the right time to do their job efficiently. The management will be presented with executive dashboards where they can drill down to the details for further investigation. Your managers in the outlets get reports such as DOCs delivered to them automatically so that they can action issues on the spot. The solution is designed to help you stay on top of your business with all the information you need at your fingertips.

To find out more, visit our Automotive BI Solution page or email us at