New business models driving SMR

Emerging repair models and digital tools can guarantee a happy customer, while retaining competitive service pricing for garages

Published:  07 November, 2023

How can automotive service providers level-up to support customers impacted by increasing costs, while maintaining profitability in their organisation? Research shows that the rise in the cost-of-living is impacting vehicle owners, but also garages, repair shops and automotive service providers.
    
Forbes reports significant cost-of-living pressures on consumers. A study found that 19% have had to dip into rainy day savings or take out a loan to cover basic running costs. Overall, two-thirds of all drivers agreed the rising cost of living has made owning a car more challenging, with 68% worrying about affording fuel for essential journeys such as commuting to work or taking children to school.
    
The impact of rising inflation works both ways. A study from The Motor Ombudsman shows that automotive servicing and repair businesses are facing their own operational issues due to the cost-of-living increase. Nearly 80% of workshops surveyed stated that increased parts prices may impact their business. This led to 60% of those polled to suggest they would be looking to increase costs to their customers, in order to remain profitable in the face of higher overheads.
    
Delays getting hold of replacement parts were cited as the second largest obstacle for garages and workshops, negatively impacting 72% of businesses. The poll also showed 71% of workshops are seeing motorists reducing their ad-hoc spending and routine vehicle maintenance when compared to the first six months of last year.
    
McKinsey’s prediction for the reality of the automotive sector spanning the remainder of the decade is upbeat however: “Driven by shared mobility, connectivity services, and feature upgrades, new business models could expand automotive revenue pools by about 30%, adding up to $1.5 trillion.”
    
As McKinsey cites in its report, thinking out of the box is key to unlocking both better customer offerings and business value – and both of those are symbiotically linked. The route to better customer satisfaction and business growth will involve changing traditional repair shop business models, adapting to meet changing customer preferences and introducing supporting automotive technology inside and outside the physical garage. This is exactly the approach Halfords has taken as a business – both inside and outside of its autocentres with its tech- and customer-led changes, underpinned by its end-to-end Avayler software platform.

New software accelerates business change and keeps the customer in tow
On the Halfords Autocentres side, new tech has been introduced on to the repair shop floor that has a threefold advantage.  It aids technician productivity, at the back end makes parts/inventory management more automated, and essentially keeps the customers on-side with a portal to keep them informed throughout the repair journey.
    
Halfords has also been growing its Mobile Expert operations. Customers can book slots online for vehicle repairs at a time and location that suits them. The Avayler platform then tracks the skills level of a technician, work hours and the work undertaken to not only optimise scheduling but learn from the data to make mobile jobs more efficient. The van operation, which has a 4.8/5 Trustpilot rating, has seen a 70% increase in job productivity and more than 200% increase in utilisation since it started using the platform, demonstrating the potential for greater customer satisfaction from mobile operations.
    
With this experience in mind, here are the top three areas where tech-led innovations can deliver realisable cost, efficiency and time benefits across all areas of the automotive repair landscape.

1.    Putting the customer front and centre
Automation of tasks and having a coherent digital presence makes repair organisations more responsive and time-efficient – better for customer service and for the business bottom line. Whether booking a service inside or outside the garage, most customer journeys will begin online. This means making sure they can easily book their services at a time and date that suit them – for mobile services this will also extend to location. Overlaying this with dynamic pricing depending on slot availability allows.
    
Once the service is booked, it’s important to keep a digital line of communication with the customer through a self-service portal. Customers log in to the portal and can view details about their appointment including pricing quote, parts needed, technician name and more. Automated digital communication is sent to the portal at every stage, for the customer to access in real-time. Inside the garage this could be live updates on the status of their repair, for mobile operations this could be accurate updates on the whereabouts of the technician coming to execute their repair.

Identify and manage minor faults
By digitising all customer interactions, garages and automotive service providers can also maintain customer data and history and streamline services according to this information. Here’s where this can really pay off in the current economic environment. Any non-critical faults that might save the customer some money on this appointment can be flagged and tracked to address later.
    
Here again, a more predictive maintenance management approach can remind customers to book their next services when needed based on relevant customer data – to capture recurring revenue but also let customers manage and prioritise their requirements on their own terms.

2.    Boosting operational efficiency with increased automation
Of course, it’s not just the customer themselves getting better value from more streamlined, intelligent and efficient processes. Operationally, introducing new tech will have significant business benefits too – right from initial booking through to job execution and recurring revenue.
    
Automated scheduling delivers the best outcomes for while maximising efficiencies with our automated scheduling. Dynamic appointment booking easily books customers into lanes, bays, offices or other site locations from the schedule board. Managers, dispatchers, and admin users have the ability to accommodate walk-in customers, additional jobs and last-minute changes. Capturing key customer information that integrates with dynamic scheduling ensures added jobs are optimally scheduled to accommodate more services per day.

Avoid inventory shortages
One of the best efficiency benefits that technology and software can offer to automotive repair organisations shops is inventory management. End-to-end software can track inventory levels at all times and trigger responses to shortages accordingly. This type of platform can also connect with vendors and automatically notify them of required inventory, products and parts. With the Motor Ombudsman reporting citing inventory shortages was a key pain point right now – automating these processes can significantly alleviate these inventory pressures.

3.    Keeping employees on the right road
Not only should technology optimise stock and resources, but it can also maximise employee productivity too. It begins with assigning the most suitable technician to each specific job. Putting technology into the hands of technicians in auto repair centres and in the field, makes their jobs much easier. Tablet-based systems can easily guide technicians through jobs, including integrations to access information such as vehicle identification numbers and all the details of vehicles to make the process quicker and more transparent.
    
Technicians will need the ability to add additional jobs that are needed on the vehicle – the system, which should then automatically remove completed jobs from the technician’s diary to free up any other available slots throughout the course of the day. Not only will this ensure quality assurance, audit trails and time stamps, but without the option to adjust labour timings, technicians are encouraged to complete the necessary MOT, service, or repair within the designated time slot.
    
All these tech-enabled efficiencies will translate into bottom line benefits. We are a case in point. We used Avayler to manage the Halfords expansion to mobile operations, and it was both successful and profitable. Very quickly we were able to increase productivity by 20% on top of our initial projections, while ensuring the highest levels of customer satisfaction

New digital solutions drive the future of the garage
Both drivers and automotive repair providers are feeling the effects of inflation everywhere, especially as this era of economic hardship isn’t expected to disappear quickly, but those who look to new models to serve customers and prioritise digital solutions will prosper.
    
Automotive repair providers should take this chance to re-calibrate their business systems and make the most of available technology to provide a better service to their customers. A tech-focused investment could propel garages well into the future of the auto repair industry.


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