Since my last post, It’s The Used Car Business!,,, Stupid! I have had many conversations around just why truly capable used car professionals are in such short supply and therefore demanding such highly paid salaries and packages. During these discussions it has struck me just how out of touch some thinking is, when it comes to the professional skills-set required to be able to succeed in the used car arena.
And this is true at both manufacturer level and at franchised dealer level and I would argue that for both, the securing of genuine used car talent is pivotal to their on-going success, but for the franchised dealer it is vital that initiatives are in place to secure and develop the best used car talent they can afford. Thus my post today, which is designed to outline just what the skills-sets and experience required are, of these illusive professionals; the professionals who can walk into your business and immediately get to work at building and growing your used car business and therefore securing your long term success.
Now in saying all this it is important to qualify that it is up to the owners of the business concerned to define the used car business that they want to operate, because that will dictate the professional profile of the individual you are going to seek to employ. For many reading this, their business is more a disposal centre for cars up to 6-18 months old, (generally ex-demo, ex-short term lease and/or ex management cars). Now that is fine, it is not up to us to tell anyone what their used car business should look like, but in reality this is a business in competition with your new car business, not one that is supporting your long term business aims in the way that a more expansive used car business can; and listen you can of course run businesses selling used cars of this profile by migrating staff from your new car business, so the requirement for more expertise within the used car market can be avoided.
But we would argue that this leaves your business a hostage to fortune; it is not that cars of this age and mileage profile aren’t used cars, of course they are, (every used car business should carry this profile of used car stock, as long as it is selling them profitably), just that it will be restricting the growth of your business and leaving your business vulnerable, especially if the few sources of supply for these vehicles change their disposal options.
In this article I will be speaking directly to those running and owning franchised dealers that want to tap into the extremely lucrative and total used car market, those looking to increase overall profitability by running used car operations containing stock that is at the mileage and age stipulations of their warranty cover, capturing customers far earlier in the purchasing cycle and enjoying all the benefits associated with a successful used car operation.
Now the catch; in an ideal world the professional capable of driving forward your used car ambitions must, in our opinion, have an in-depth understanding of what it takes to get a used car business by the scruff of the neck, run it hard and drive it towards success. Preferably they will have already run another successful used car operation themselves and therefore understand the demands and requirements of a successful used car operation. This is imperative, because the used car business, the one that influences your future new car and long term business success, is a very different business to operate, so the business you probably have little understanding of, is the business most affecting your new car and overall business success in the future.
Herein lies the quandary for those running franchised dealer operations, they may understand the requirement to grow their used car operation, but they are looking for a professional with a skills-set that they invariably don’t understand and it is because of this, that many decisions made by those running franchised dealers in the past, in relation to appointments in senior used car positions, have left us bewildered. It is almost as if there has been no process of evaluation in appointments, no striving to find the professional with the experience and the knowledge in how to build successful used car operations, no its more a case of let’s just move this individual into the role, it can’t be that hard.
Now in all fairness, it is also hard to find these individuals, there are not many of them around and those who are successful will of course already be running a successful used car operation and being paid handsomely for their efforts. They may also have found where they are comfortable, where they can have the difficult conversations required with the owners of the business and have the authority to get the job done!
I mention this because this is important and sometimes why it can be difficult to poach successful used car professionals; the hard work to overcome some of the political issues has already been completed and they are not fighting the all too common undermining of the business and the reticence to embrace the individuals required. Now listen I understand the reticence to embrace used car professionals, in the main they are not a “Good Fit” politically for some franchise dealer environments, but as our market continues to evolve, the importance of used car success is going to become more important to manufacturers and their franchise partners, in terms of their new car success and the financial performance of their business as a whole.
So we would argue that now is the time to be looking for genuinely capable and successful used car entrepreneurs, (before you find there are none available), and accepting that you must also create an environment where they can succeed on everyone’s behalf.
But in doing this there must be an acceptance that challenging questions will be posed by this individual, they are going to challenge conventional thinking and maybe worse, trample on some sacred principles. I have seen and experienced much professional prejudice against used car professionals in the past and now many of them reside in the independent and specialist used car sectors and/or are running their own successful independent businesses. But now is the time for some different thinking and embracing the benefits that this individual will bring to the overall used car and new car objectives.
So what skills will this individual have to have, in order to bring successful, effective and proven used car development skills to your business? Well although nowhere near the definitive list, the skills and experience below should be the absolute minimum level of acumen and experience;
- A proven track record of running successful used car operations at franchise dealer level.
- Used car business auditing expertise, in terms of an ability to walk into a business and assess the current strengths and weaknesses of a used car operation, and then go on to construct and deliver the bespoke and appropriate programme of used car business development.
- The ability to construct and deliver the used car business development programme required, in order to ensure that the used car operation receives the tailored used car development programme that will ensure success, via the achievement of all targets.
- Constructing and overseeing the used car training and personnel development programme that will take their used car sales team on a path of professional development.
- Capable of presenting complex business cases for investment in used car development at both franchise dealer and group levels, and at the most senior levels within the organisation; including the overcoming of all objections.
- Building the relationships and the strategies required in order to ensure that all used cars returning to the manufacturer and their in-house finance company, (whether that be ex-lease, ex-management cars or cars returning at the end of finance agreements), are supported and either retailed or disposed of via the used car operation.
- In-depth understanding of the power of technology and how it can be harnessed to work in successful synergy with used car operations.
- Commercial expertise in the used car market as a whole including the fragmentation of the used car market, the changing purchasing behaviour of consumers and the strategies required to successfully develop electronic enquiries to successful sales outcomes.
- In-depth understanding of the cyclical demand within the used car market place and how that effects budgets, targeting, (both departmental and individual), the utilisation of funds employed to used car stock and the opening used car stock levels required.
- Commercial grasp and understanding of the effect that the rate stock turns plays in in the utilisation of funds employed to used car stock holding and therefore overall profitability.
- Expertise in used car stock acquisition techniques and used car stock profiling, as well as the ability to build the relationships of supply required to ensure minimum stock levels are maintained.
- The ability to build and manage successful used car sales teams, including a complete commercial grasp of what skills to employ and when, in order to ensure that growth and budgeted profits are maintained.
- Complete commercial grasp and understanding of the symbiotic relationship that exists between used car performance and success in the new car market.
Now in reality it will be unlikely that the skills and experience alluded to above will have been nurtured in another role contained within the structure of the franchised dealer, so if nothing else, hopefully I have been able to get across the folly of shifting personnel around within the sales department in the hope that someone will trip into success in the role of developing a successful used car business.
It just does not happen, in the same way that I can’t go on a trip to the Kennedy Space Centre and fly space shuttle; for sure there astronauts who can but despite my willingness to try I lack the experience and training to deliver the objectives, so expecting me to succeed is a highly flawed thought process.
And one last thing, and this is important, if you come to the decision that the professional possessing all of the skills-sets above will be required to develop the long lasting and successful used car business foundations that you are going to need, then think carefully on the commercials. I was asked recently for my input into a package and job description for a high profile role building a used car development programme for a prestige manufacturer; it was a huge job and one that would require a seriously successful, big hitting used car professional to deliver and when we got to the package, I nearly fell off my chair.
The naivety lack of commercial understanding of the UK used car market place shocked me; I can’t and won’t name names, but we are talking about a well-known automotive industry recruiter and a very successful premium brand manufacturer and between them they were suggesting a package that was going to pay the successful applicant 33% of what the job was actually worth. When we explored this further there was a general reticence to pay the money required because of what it would mean, in terms of other staff employed, but until the sector does away with this mentality and pays what the role commands in the independent and specialist sectors, how does the franchised dealer part of the sector expect to attract and retain top talent; and the top talent that right now, is most crucial?
Now we appreciate that finding genuinely successful used car professionals is very difficult for both manufacturers and their franchised dealer networks but luckily help is at hand. 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 have faced the challenges of fast paced evolutionary markets and know how to develop a successful and profitable used car operation 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 and been at the forefront of the development of approved used car programmes for a host of manufacturers. 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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