Dealers offering discounts on servicing and repair work risk trading customer retention for eroded margins and long term damage to their businesses, according to new research.
Three-quarters of the 4,269 car owners polled for the forthcoming Bumper UK Automotive Aftersales Report 2024/25 said they expect dealers to offer an initial discount on the prices they quote for aftersales work.
When it comes to subsequent jobs over half (51%) expect the same level of discounts and nearly a quarter (23%) expect even larger discounts. Only 20% view such discounts as a one off offer.
Dealerships who fail to offer the same, or greater, discounts on subsequent visits run the risk of losing repeat business with 57% of respondents saying it would affect their likelihood of returning.
However, the research found dealers offering interest-free financing to spread the costs of bills were likely to have stronger customer retention rates, with 89% of respondents saying they were more likely to return to a dealer providing it as an option.
“Discounting can only ever deliver a quick fix as it erodes profit margins and once withdrawn can have a damaging impact on repeat business,” said Daniel Christie, Bumper’s Head of Sales.
“The research shows how interest-free monthly payment options deliver a more consistent long-term solution to winning business and then retaining customers, while delivering transparency and protecting margins,” he said.
The research also identified that over a quarter (27%) of customers spent between £500-£1,000 on servicing and repair work in the last 12 months.
Higher and lower bills were equally balanced with 21% paying £250-£500 and 21% paying £1,000-£2,000. Bills totalling up to £5,000 were paid by just 3% of respondents.
