Of course there is not one simple answer or “Silver Bullet” when it comes to the question of building franchised dealer networks that are successful at retailing used cars, and therefore securing your current trading model. But one issue comes up again and again when we are visiting manufacturers and their franchised dealer networks, when it comes to used car retailing;
The Need To Invest In People, Not More Technology!
Now let’s qualify that statement! Of course electronic systems and technology platforms are invaluable, in terms of the collation of customer enquiry data and as a tool to assist in the growth of used car sales, but it is important to remember that electronic or technology based tech systems and platforms do not sell used cars!
Give us a choice between the best systems and technology based platforms and good people and we’ll choose good people every time! Now we don’t want to hark back to the “Good Ole Days” but it is important to point out that not that long ago we worked in, and owned, used car businesses selling thousands of used cars per annum without technology platforms and electronic systems. No; just enquiry logs, diaries, a pen and a telephone!
Now we fast forward to today where technology platforms have taken over and are expected to do far more of the selling job for manufacturers, who by default have then stopped investing in the important roles and skills needed to grow successful sales businesses, and now that times are getting tough the lack of investment in people is about to come back and haunt many, because the current skills shortage can’t be resolved in a couple of months.
So how did we get here? Well it is easy to understand why and how; manufacturers quite rightly embraced the technology platforms that consumers began using when choosing their next car. They identified that some, (but not all, and this is important), customers wanted to do far more of the research process on-line via their smart phone, tablet or computer, especially when it came to the new car purchase.
Realising that consumer purchasing habits were changing when it came to the new car purchase process, manufacturers realised that they then had the electronic platforms required to drive customers to dealerships and into the arms of the waiting new car sales department; and better than this, they didn’t really need highly skilled sales professionals anymore, (or the salaries that went with them), because customers were making more of their purchasing decision from the comfort of their favourite armchair.
So instead of investing in sales professionals we have the new breed of polo shirt wearing sales consultants who now handle customers who have made 90% of the new car purchasing decision before they even contact the dealership. Now this is not to take away from the skills these professionals have, not at all, and we understand why franchised dealer networks rushed to embrace this employment model; on balance salaries have probably been reduced by 40%. But these professionals are unlikely to possess the skills that most franchise dealers require right now, those needed to protect the future of their business from a platform of successful used car retailing.
The end result has seen this new car sales department structure being embraced by the vast majority of franchised dealer networks, some of whom are now struggling on the new car sales front, let alone being capable of developing used car retailing growth strategies, just at the moment that they need them the most, and this presents a problem for manufacturers.
With the traditional new car sales, service and parts trading model under threat for many manufacturers, many of you reading this will have dealer networks needing to increase profitability in order to protect your trading model in the UK. This can only come from developing used car retailing within franchise dealer networks and this is where the majority of you have some challenges, because for a period of time approaching a decade most of you have ignored the used car market, having been seduced by the once in a lifetime period of new car retailing, delivered to the market off the back of cheap interest rates and the embracing of PCP by consumers.
Unfortunately during this period of time the “Bar” for success in the used car market has been raised substantially and for many manufacturers and their franchise partners, there is a lot of work to be done in order to build the successful used car businesses required to protect your UK trading model. For many senior professionals based at manufacturers reading this article there is an absolute dearth of used car talent in both your own organisation and within franchised dealer networks, so the majority of you will require an intensive period of on-site used car business development, at the businesses of your franchised partners, combined with the personnel development and training programmes required to develop and support the people tasked with increasing used car performance.
This will be vital to the long term success of any used car business development programmes you decide to launch, because to be a success you will need to develop both the businesses within your franchised dealer networks and the professionals described in our recent articles below;
Do Successful Used Car Professionals Exist For Franchised Dealers?
Do Successful Used Car Professionals Exist For Manufacturers?
The worst thing you could do now is to think that further technology based systems can get you out of trouble or allow yourselves to be sold another version of the “Emperor’s New Clothes” quick fix solutions to improving used car retailing. There is NO simple answer, it is your decision, but all the posts we see selling “One Trick Pony” solutions are not the answer, (building long term used car success is never about just one single operational issue, regardless of what it is), something we will be covering in our next article.
Luckily though, when it comes to delivering success in the used car market, 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 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 development and training programme 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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