News

02 March 2010 Warranty sales process improvements stack up to better margins

Reviewing your warranty sales process is something that often gets overlooked or put off but small, regular changes to what you're already doing can give some significant gains over time.

It's easy to get lulled into a false sense of security and think that because you've got a good set up that you don't need to improve, but regular reviews are good for business.

The first step sounds obvious because it is, but check that the warranty you offer is the best for the cars you sell and the customers that buy them. The best products aren't always the cheapest. Helping with product tailoring is a key element of Car Care Plan's work.

Getting the product right isn't just about more revenue; it also helps ensure that the customer experience is improved at every stage of their ownership, especially if they need to make a claim. Success here has clear loyalty benefits to your business.

The next step is to move from selling or giving away a 12-month product to actively promoting a 2-year cover. Longer duration products not only keep the aftersales manager happy, they also reflect your confidence in the quality of the car at the point of sale, even if you ask the customer to pay for it.

At this stage, we also work with dealer teams to realign sales incentives or commissions and wherever possible, we encourage dealers to link them to the value of the overall deal. As well as helping encourage the sale of add-ons, it also focuses sales teams on the total value of the customer. You might incentivise more upfront, but you'll reap the rewards later on.

We also provide support for getting the right balance of stock, which has knock-on benefits for add-on products. Monitoring what's going on locally is key and we can help you report on what's being sold in your area to make sure you get the right cars.

Knowing what your local competition is selling is crucial. If they're selling Fiestas and you're stocking Passats, we can help you manage your stock turn and source the right cars.

A prime example of where this all comes together is the Jaguar Approved Used Car programme. It's not just a warranty scheme, it's a complete package and the cars are inspected, provenance checked, prepared and warranted to give customers as much confidence as possible in their purchase and keep them coming back to the dealerships.

After all, it's cheaper to keep a customer that you already have than to find new ones.

By Philip Morrison, Head of Corporate Sales for Car Care Plan.

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