By Julie Caldicott, Managing Director, Motify
Across Southern Africa, the aftersales engines of most dealerships are quietly leaking value through the erosion of one of their most profitable segments: the high-margin customers whose vehicles have aged out of their warranty or service plan.
Using aggregated DMS data from dealerships across Southern Africa, we’ve put a value to this churn. Owner-paid services can account for up to 60% of your total workshop income. And, in turn, retaining just 40% of customers as they age out of their service and maintenance plan, can increase revenue by 60%.
It’s clear that across Southern Africa, the aftersales engines of most dealerships are quietly leaking value through the erosion of one of its most profitable segments: the high-margin customers whose vehicles have aged out of their warranty or service plan.
The Overlooked Revenue Opportunity
Unfortunately, the impact of this churn doesn’t always show up in the topline numbers. So it’s easy to assume that strong new car sales or full workshops mean everything’s on track. But we have found that when we unpack the data with our dealership clients, the drop-off in owner-paid service retention is costing real money.
The Financial Impact of Improved Retention
The financial case for customer retention is compelling. Owner-paid service customers make a larger contribution to the bottom line for several reasons.
They drive:
- Higher revenue from age-related service needs
- Increased labour hours per customer visit
- Greater service upsell opportunities
- Stronger trade-in potential
- Improved vehicle sales to loyal customers
- Enhanced lifetime customer value and cash flow
And, unlike new customer acquisition, retention costs less, and pays off faster.
Not unhappy, just neglected
Our experience working with dealerships and their data tells us that owner-paid service churn can be avoided. These aren’t necessarily unhappy customers, they’re just uncontacted or unsure of when they’re due for a service. Many are open to returning to you – but they haven’t been asked.
Why It’s Being Missed
In today’s attention-scarce, information-overloaded world, customer retention isn’t solved by sending one more ad hoc SMS. What moves the needle is having a proper system in place to track the right customers, contact them at the right time, and turn that into a confirmed booking and repeat business.
But in most dealerships, ongoing customer engagement doesn’t happen consistently because the team simply doesn’t have the time or headcount to manage it properly. This isn’t a criticism. Busy service departments should focus on inbound bookings, vehicle turnaround, and day-to-day delivery. But the reality is that that leaves little space for structured, outbound customer lifecycle engagement.
Building an Effective Retention Process
At this point, you are probably thinking that all makes sense, but does this mean I need to grow my team, taking on extra overheads and management demands? Today it doesn’t, nor does it mean turning to traditional outsourcing.
Consider a concept called fractional capacity building. You might already be familiar with this in finance, HR and marketing. It is also your best option for solving the customer retention challenge, and turning it into an opportunity. Tapping into a fractional customer service capability is an excellent way to plug in targeted and expert follow-up as part of the daily rhythm of your dealership. This allows your teams to focus on service delivery while you maintain high-value customers in the system.
Motify client, Gerhard Vermeulen, the managing director of Auas Motors says:
“Marketing campaigns we did previously simply didn’t get customers back, especially for out-of-warranty vehicles. We couldn’t book customers from those efforts. But now, we are actually getting customers in.”
Kickstart Data-driven Customer Retention Today
AutoRetention by Motify turns routine service visits into repeat sales by building loyalty with every appointment.
Speak to us to help you work out the best way to remind your customers why they should come back to you.
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