Have You Come Into 2018 With the Right Used Car Team? (UK Manufacturers Article)

A thought provoking question for everyone I’m sure and as much as it is an entirely individual question, specific to every single manufacturer, it is one I thought would be worth asking, especially now as we deal with more challenging trading conditions and for some of you reading this, challenging volumes of “Pre-Registrations” within your franchise dealer networks, that will need to be traded out of during the 1st quarter of 2018.

Those of you who read my previous post; Are Your 2018 New Car Objectives Under Threat, will hopefully be left in no doubt as to the importance of the decisions the industry makes now, and all of you have your individual challenges dictated by many factors, including;

• The brand you represent.
• The volume of “Pre-Registered” stock carried over from last year by your franchise dealer networks.
• The 1st Quarter new car objectives.
• The capability and experience levels of the Sales Teams within your franchised dealer networks.

Now of all the points above, it is my opinion that the key to your success will lie in the last; “The Capability and experience levels of the Sales Teams within your franchised dealer networks.” Why do I say this? Well, it is critical and in my opinion you are always better off, (as a manufacturer), having the “Right” sales teams in a bad market than you are having the “Wrong” sales team in a good market and as a whole, unfortunately the industry has not invested in the right people, paid them what they are worth and supported their careers, and now that our moment of need has arrived, some franchise dealer networks are in danger of not being able to draw on the skills required, to be able to trade successfully and profitably through this period.

Over the last 10 years we have seen the transition, (especially with some of the more premium brands), from entrepreneurial sales teams to teams capable of administering the desire to own the product generated by the manufacturer, which has driven the customers to the showrooms within the franchise dealer networks. Now I understand this thought process and the obvious benefits to the bottom line that these decisions delivered; after all when it comes to sales, as I have heard it said many times, “We Do Not Need A Sledge Hammer To Crack A Nut!” and these more administrative and customer handling sales teams have been important to the success of many of your franchise dealer networks. But let’s be honest, the fact that they have been, (on the whole), a cheaper overhead, has played a part in the decision to embrace this employment model in the sales departments of some of your franchise partners.

Especially when you consider just how much more expensive the previous sales team may have been, but I want to challenge this perception. I have heard it said many times that a sales professional can’t be paid as much as their Sales Manager or the Dealer Principal! Well I would answer “Why?” Sales teams and individual professionals are like any other team, so let’s draw a comparison between a sales team and a football team.

Now I readily admit that I’m not a great football fan and I wonder at the salaries being paid but like our industry, in football, not everyone can be a winner. If you want to win and the landscape is getting more challenging, for whatever reason, you have a decision to make; do you want to win or just survive? As I write this I am reading about a footballer called Alexis Sanchez, who will reportedly be earning £600,000:00 Per Week, when he leaves Arsenal and joins Manchester United; not because he is necessarily worth that amount of money but because the manager of Manchester United, Jose Mourinho, has made the decision that his skills are required if they are to achieve their objectives.

Now unfortunately because Manchester United have not produced players of this quality in enough numbers, they have to go to the open market and pay whatever is required to get the skills they need right now! And I would guess that at no time did he worry that a player he needs may earn more money than him. This mind-set is a million miles away from what the majority of businesses have done and right now, at the moment of most need for some of your franchise partners, their sales team may be lacking in the skills required to get the job done.

The right sales team, the one capable of predicting the changes in the market and rolling their sleeves up and getting the job done, would have asked the pertinent questions, done the work required during the last quarter of 2017 and hit the decks running as of the 2nd January, and would now be well on the way to achieving the objectives required by you, as the manufacturer. They would not have been forced into making so many of the mistakes I see being posted on business social media platforms; of sending out distressed sales messages and looking for trading relationships with 3rd party independent businesses that are in fact “Trojan Horse” businesses that actually threaten the business model of the manufacturer they represent, as well as their own survival.

These Directors, Used Car Managers and Sales Professionals, although a lot more expensive for your franchise partners to employ, would have been forward thinking and during December of last year, (at the latest), would have been planning for what was required to achieve the 1st quarter new car objectives of the manufacturer, which would have included asking the business many questions, (and building the foundations required), including;

• What is the quality of our database, are we leveraging it efficiently and to the benefit of the business?
• How are we going to return liquidity to the business?
• How are we going to ensure that we have a successful used car business and a successful new car business; not a new car business and a nearly new car business?
• Are repeat business and new business campaigns/initiatives clearly identified and running in unison?
• Do we understand the drivers behind the customer’s decision to purchase our products?
• Can we leverage desire for ownership?
• Are we selling cars or financial ownership products?
• How do we protect the brand and avoid sending out a distressed sales message?
• Are our advertising and marketing initiatives fit for purpose?
• Do I need additional skill-sets to achieve the objectives?

Now of course I readily accept that this process is different for every manufacturer and every business within your franchise dealer network; for some of you the product cycle and the market are still with you, especially in specialist markets where desire for the product and lack of supply is keeping the pivotal “Supply and Demand” ratio in your favour. Although of course, this is not to say that these markets are easy to be successful within, just that they are different.

For other manufacturers reading this article the challenges will be many and oversupply of product will make it difficult for everyone to succeed. If you are reading this article and those responsible for running the used car and new car sales departments within your franchised dealer network are not asking the questions above and preparing for the challenges of the 1st quarter, luckily help is available.

The owners of Autoformance have owned and run successful used car operations and franchised dealer groups, as well as having been at the forefront of the development of approved used car programmes and sales training programmes for a host of manufacturers. Part of our long term used car business development and consultancy offering is the construction and delivery of specific on-site used car and new car campaigns, designed to deliver the sales performance and results that your business requires. As part of this process which can be delivered on a bespoke basis and outside of the scope of a more traditional used car business development and consultancy programme, we can work to a specific and defined brief on your behalf, which could involve auditing the used car operations and sales departments concerned and agreeing on the stock holdings to be sold.

Our services in this regard are numerous and bespoke to the exact and immediate sales requirements of your franchise partners, but can include;

• The organising and delivery of appointment generation events.
• The construction of specific existing and new customer direct marketing campaigns.
• Loss lead campaigns.
• The construction and delivery of used car and new car sales campaigns, up to and including the sale, working with the existing sales teams or utilising our own experienced professionals.

For an exploratory conversation regarding these services or 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 us on 0345 057 3177.

For more information about our services please visit our website at www.autoformance.com.

Andrew Banning.

Used Car Business Development Director.