Now this is an article we are surprised to be writing but as enquiries for our used car business development services have increased this year, we appear to be walking into the same scenario at every first meeting at franchised dealerships, where there is an immediate need to manage expectations!
As much as we understand the requirement for immediate results and the need to make the problem of under performance in the used car market go away, the inconvenient truth is that there is not a simple answer and invariably we are having to take those responsible for running franchised dealer businesses on a journey of appreciation and understanding of the size of the challenge they face, and this leaves us with a genuine business conundrum;
Do we tell people what they want to hear or what they need to know?
This is a genuine problem when it comes to meetings with senior franchised dealer based personnel, especially as invariably they will have been promised the dream by those in slick suits, of a quick fix solution, the “One Trick Pony” provider alluded to in our last article; A Pivotal Piece Of Used Car Business Development Advice!,,,, And For Free, and then in steps the directors from Autoformance with the bad news!
But we can assure everyone reading this article, there is no simple answer, no secret, it is just hard work, a subject we covered in another of our recent articles, Used Car Retailing!,,,, There’s No Secret,,,,, It’s Just Hard Work! The reality for most reading this article is that both their own manufacturer organisation and the businesses contained within their franchised dealer networks, (including their own), will be years behind the used car business development curve. For most, the independent used car specialists will have raised the “Bar” of used car retailing and there will be much to do, to move their franchise dealer based used car operation on from what it has become; essentially a business that sell ex-demos and part exchanges.
With little or no development of used car professionals within franchised dealer networks, (or manufacturer organisations for that matter), over the last decade, due entirely to a lack of any fit for purpose used car personnel development and training programmes being run by manufacturers or the big PLC’s, the skills required will not be residing in franchised dealer networks or within the manufacturers organisation. So, with all this in mind, just how can coming in and looking at a single operational issue be answer to growing used car retailing across an entire network?
We see a lot of posts looking to provide the answer and “Dumb Down” the process of growing used car businesses, (a business which is a highly complex business, taking a lot of skill and experience to grow), many of which cover the subject of the utilisation of funds employed to the used car stock holding and the importance of improving the rate stock turn being achieved. Now it is not that the rate of stock turn being achieved is not important, it is vital to profitability, but you can’t expect to go into a business and say, we are here to look at your stock turn rate in isolation and improve it!
Financially viable rates of stock turn are achieved as a consequence of other operational areas of the used car business performing effectively; in effect the rate of stock turn improves by itself but only if, as minimum, the operational procedures involved within the areas of the used car business listed below, are running to the highest standards;
- Reconditioning Controls.
- Marketing and Advertising.
- Management Controls.
- Sales Controls.
- The Used Car Sales Process.
- Used Car Stock Acquisition Techniques.
- Stock Disposal.
- Enquiry Management.
- Used Car Sales Skills and Experience.
- The Management of and Selling From, Virtual Used Car Stock Holdings.
Now we can promise everyone reading this article that for the vast majority of franchised dealers there is an intensive 6 months’ worth of work and development here, in regard to all that is involved in the core used car disciplines listed above! Just take Used Car Stock Acquisition as an example; probably the most misunderstood and important element of learning, in the growth of any used car professional; why? Well it is important to realise at all times that if you can’t acquire used car stock in the right numbers to feed the growth of your used car business, the rate of stock turn you are achieving will become irrelevant, because you will have nothing to sell!
Be under no illusion, the trading landscape in used car stock acquisition is ferociously competitive and the learning curve will be “Vertical!” So when you see post harping on about how important it is to be competitive on price because you can then sell 3 cars in 30 days not 1 in 30 days, remember that there is a massive flaw in this argument; to do this, (and let’s be in no doubt that the argument is correct), you have to able to buy 3 cars in 30 days, and this is where 95% of franchised dealers will fail to prove the argument correct.
So essentially those responsible for running franchised dealer businesses have 1 of 2 decisions to make, you either look for a short term solution, to increase used car sales over a short period, (another of the “One Trick Pony” options), or you look to build sustainable and long term used car growth, and secure the long term future of your business.
But let’s look at the difference between the 2 options, so you can make a decision for yourselves, because we can deliver either;
Option 1, A Short Term Increase In Used Car Sales; well this is easy to deliver, we will build a team of used car professionals, we will come to your business when we will reside at the business for 4 days to construct a “Nuts And Bolts” used car retailing event to be run over a weekend, which we will man in conjunction with the existing sales team. We will wring every used car enquiry out to dry finding the used car business within the dealership that you don’t realise exists and deliver a substantial increase in used car sales and profit. But then we will be gone and used car performance will drop back to the pre-event levels, because as much as it is possible to pick things up, it is impossible to impart 30 years of used car retailing knowledge on to anyone in the space of a 4 day event.
Option 2, Building A Sustainable And Successful Used Car Business; now this far more involved but it is what will be required if you want to succeed in the used car market, and we say that with all respect. It is your business, it is not for us to tell you what your used car aspirations should be; no, our job is to tell you how to get the results you want, or advise on what results will be delivered by the initiatives you want to deploy as a strategy.
But a very important point to remember in any programme of used car business development is this; every dealer in your franchised dealer network will be at different stages on their journey to having a successful used car business; this why any “One Trick Pony” solution can’t work! All the businesses contained within your network will be different, involving different staff structures, with differing levels of ability and most importantly, will be trading in different market demographics.
It is our experience, (and therefore also our recommendation to you), that it is only when the business itself, along with the personnel involved, are benefiting from a programme of intensive and bespoke used car business development consultancy and training, that any used car business development programme can succeed in the long term.
It is important to remember that talented staff will always leave a business to pursue their careers, so developing just the personnel will always leave your business vulnerable as and when they leave. The benefit of developing the business as well, (in terms of its used car sales and daily operating procedures), is that the business becomes successful as a whole and is less vulnerable when key members of staff leave.
Therefore our used car business development programmes are always delivered on-site and are built in a bespoke fashion after an initial intensive 2 day audit of your used car operation. This initial in-depth 2 day audit of the business always culminates in a presentation to the senior management team and owners of the business. It is designed to deliver a blueprint of where the used car operation is today, highlighting both its strengths and the areas of attention required within the business, if the used car operation is to grow.
Only this process enables us to then work with you, acting as your outsourced used car business development professionals and building the bespoke programme of used car business development required; one that is sympathetic to your individual needs and your growth ambitions.
Only when a programme of used car business development like this is delivered, in conjunction with the training and personnel development programmes required, in order to develop the personnel tasked with growing your used car business, can any programme of used car business development be expected to succeed.
If this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who are trading in these specialised markets themselves, have faced the challenges of fast paced evolutionary used car markets and know how to develop a successful and profitable used car business on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations, been at the forefront of the development of approved used car programmes for a host of manufacturers and more importantly, are still trading and running used car businesses in specialised used car markets. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
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