Auto-chain retailer

C: Okay, as I understand, our client is in the retail part of the service chain. What are the newer geographies he has expanded to? How are they different from the previous geographies?

I: The newer geographies are tier 2 and tier 3 cities. Previously, the client had presence in the major cities in the country.

C: The profitability has decreased. Can you let me know how has it decreased? Is it the revenues that have gone down? Or have our costs increased?

I: The cost has definitely grown given we have opened new stores. However, the revenues have not really grown in tandem. 

C: So, as I see it, I should be focusing my attention on the reduction in revenues. Is that fine?

I: Yes, that should be the way to go.

C: Thank you. Now I would like to know about the products our client sells.

I: Good question. Currently, our client offers two kinds of services: 1. Off the shelf auto parts. 2. Auto services themselves. 

C: What kind of vehicles does the client service? 

I: The client services majorly two kinds of vehicles. Cars/Scooters/SUVs/MUVs (smaller vehicles) and larger vehicles such as buses/trucks.

C: Now that we have established the business, I would like to know is there any particular service that sees the unhealthy revenue growth?

I: Yes, the auto-parts seem to be doing well. It is the Auto-service segment that sees no revenue growth.

C: Understood. Is there a particular vehicle type that the client sees the low revenue income in?

I: Yes, it is the truck/buses segment that show the low revenue.

C: Thank you, that helps. Can you let me know the reason for the lower revenues? Is it that customers are low or have the market prices gone down?

I: The market prices have remained the same. However, the customers haven’t been as much as the client expected.

C: Understood. I would now like to enquire why the inflow of customers is low. For this I would like to drill down into Customer Demographics, our Company, our Competitors and Regulations.

I: There have been no changes in the Customer Demographics, Competitors and neither have there been any changes in regulations.

C: Okay, so I will focus on the aspects of our own company. Now I will look into Products, Price and Promotions to get a deeper understanding of the issue.

I: Sure. The client’s promotions did not reduce or change drastically. What do you mean by looking at Products?

C: By products, I mean looking at certain aspects of the Automobile Servicing such as Quality and Customer Interaction issues relating to customer retention.

I: Okay. No, the client does not see any changes there.

C: Then the issue should lie in the pricing area. Is the client pricing differently than the market?

I: Yes, the client prices automobile servicing for trucks/buses higher than the market. Can you tell me why the truck drivers do not tend to take our servicing in newer cities?

C: Yes, they directly may be looking for secondhand trucks at such costs or simply getting single services by local mechanics.

I: That is right. Can you let me know the recommendations now?

C: Yes. In terms of long-term recommendation, I would advise a membership program so that customers may be retained to provide as well as drive in some revenue with membership fees. For a short-term recommendation, I would advise reducing cost to the market value so that we can start getting in customers.

I: Thank you, we can close the case now.