As we are fast approaching the end of 2019, and the moment when used car retailing performance levels are set, (after all there is little opportunity to change things drastically for the better in the time that we have left), it is time for reflection and planning in earnest for 2020; a year that we predict will challenge the sector in the UK probably even more than 2019.
Just like you, (our readership base), this is a time for reflection for us as well, as we begin to plan how we are going to leverage our skills and our offering to UK based manufacturers and their franchise dealer networks during 2020; thus at this time of year we always publish our “Used Car Market Place Predictions Article” for the next year. This is a vital discipline for us as it forces a period of reflection upon us, therefore we avoid drifting through periods due to a lack of direction.
Normally we wouldn’t publish these predictions in too much detail but this year we have felt compelled to publish our thoughts in entirety to our readership base of over 5,000 senior motor trade professionals; purely because we fear the automotive sector as a whole is reaching a “Tipping Point” and a point when the current direction of travel cannot be altered.
We are blessed with motor trade professionals in our organisation who have traded through many markets, seen many challenges, invested in a host of successful businesses and regardless of the trading environment, have always succeeded; so we feel this entitles us to say that the current turmoil and the challenges involved are no worse than any other dips that the sector has seen since the 1980’s.
However, one thing has changed and we all agree that this is the most serious operational flaw in the businesses being run in the UK, especially when it comes to successful used car retailing. Now, this article will be a generalisation for the market as a whole; some of you reading this will be incredulous thinking well we are different, we have had a great year, so this doesn’t apply to us! Well we are going to warn those of you thinking this to be careful; being imbedded in, and had access to, many plans for growing used car retailing, we have watched and observed how the used car and new car markets have played out over the last 2 years, and in the majority of cases those succeeding and growing are doing so because of happy timing, in terms of product launches, not necessarily because you are evolving or doing anything ground breaking on an operational basis.
Anyway, back to 2019 and where we find ourselves; what is at the heart of our problems as a sector? Well quite simply, in our opinion it is people! We don’t want to sound like a bunch of grumpy old men, but in order to reflect on the sector we drew a comparison between now and when we all joined the industry and the difference in employment and personal development attitudes is startling!
Now of course some things haven’t and will never change; even 35 years ago we sold cars! From Dealerships! We sold finance from position of financial qualification! And we dealt with the public! All this with no internet, no websites and electronic CRM systems. But there has been a huge change in the professionals running and working within franchised dealer networks during this period of time.
If we go back to mid 80’s to the mid 90’s the automotive sector embraced entrepreneurial sales professionals; who were paid very low basics but had commission structures that left no ceiling on earnings for those who were exceptional achievers, and at any level within the staffing structure. In fact the industry as a whole championed successful professionals and this bread an upward career movement of these professionals, so there was a genuine succession plan without skills shortages.
We can only speak for ourselves and our own experience, but this far more pure selling environment bread an atmosphere of competition and the people running sales operations were “Big Personalities” who employed other “Big Personalities” because they were capable of managing them and because they realised that the business needed these professionals with this hunger in order to be a success.
But somewhere along the line something changed; suddenly these individuals were not in fashion and the drive to utilise technology to deliver sales success became the answer! But not to sales professionals, no; only to those decision makers who had never sold anything in their lives and this has brought us to where the industry is today; the trading landscape we see today and we are astounded that anyone thinks this can lead you to the Promised Land and secure your futures, whether that be in new car or used car retailing.
Now don’t get us wrong; the advances in technology are brilliant and this has led to evolving purchasing habits with consumers, (so we have to evolve with them), but these advantages are just tools to be utilised in the sales process by talented sales professionals! There is not one associate within Autoformance who wouldn’t have loved to have had these advantages when they were selling because it would have made us all so much more successful; but only because we would know how to utilise the technology and the data it provides within the selling process, in order to deliver higher levels of success.
Listen, we have seen these technology sales platforms and CRM systems, audited their capability with a fine toothcomb, during the process of building programmes of used car business development for our customers, and some of them are exceptional in their capability. But here’s the problem; as excellent as they are these platforms and systems will not result in a single sale!
What is missing is the sales professionals who know how to take these systems and platforms, as well as the data and advantages that they deliver, to grab it by the scruff of the neck and drive sales success. Sadly though every sales role without exception seems to have an OTE of £40 - £45K and you won’t get successful sales professionals for this level of remuneration! No; successful sales professionals will expect to earn much more by delivering much more, so unless you as a business match their ambition, all you will get is more of the same!
So where do we think this change in attitudes towards entrepreneurial sales professionals began? Well in our minds it began when the manufacturers began to fall out love with the private investor franchise holder and looked to flirt with the big PLC’s, in terms of investors in the franchise model. And listen we understand the rational here; limitless investment in the franchise and no longer being required to run development programmes, made the manufacturers life a lot easier. But here’s the problem; this process changed the dynamic at franchise dealer level and over time the professionals attracted to the sector.
Now sales professionals were no longer dealing with the owner of the business on a day to day basis; an owner who didn’t care how much they paid you because they made 5 times as much, so everyone was happy. An owner who enjoyed the sales environment and understood the importance of having BIG sales personalities within their business because this lead to a creative and entrepreneurial atmosphere when trading got tough; why?
Well these BIG personalities had lifestyles to match; there was a huge drive to keep standards of living, and egos, on the upward trend with these individuals, individuals who were always looking to make money! But now let’s fast forward to the franchise dealership of today. 9 times out of 10 it is run by accountants and from a head office of a PLC, and whilst we mustn’t undervalue the role that a good accountant and effective accountancy procedures play in a well-run business; business is about risk and sometimes you need the team required, in-line with entrepreneurial sales process and thinking, to get you to where you need to go.
We understand better than anyone that good sales professionals and accountants don’t always mix or have a lot in common, but the reality is that you need them both to work together in order to thrive! Sadly though for many reading this article successful sales professionals are now missing from your franchised dealer networks which are too sanitised now, in terms of an environment that will attract the top sales talent you are going to require; and more importantly most of you are not set up to change this overly sanitised selling environment and therefore take advantage of all the systems and technology that is now available.
In our next article we will explore what the diary and the day of a successful sales professional looks like; we will go into this in finite detail so you can draw a comparison between it and the diaries of the sales professionals employed in your franchise dealer network. Once you have this information you can ask yourself a couple of very important questions; the first will probably be why the sales professionals in your franchise dealer network don’t work in this way and/or have this level of productivity? But perhaps the most important should be the next question; why are the senior management structures in your franchise dealerships not coaching and insisting that their sales operations run this way?
Unfortunately one of the most damaging consequences of the last decade of under investment in sales professionals, especially used car sales professionals, is that there have been none making the move into senior management, so these sales skills have been lost from both the sales floor and the management structure.
Now we appreciate that finding genuinely successful used car sales and management professionals is very difficult for franchised dealer networks, we have covered this topic many times, especially in the article below;
Do Successful Used Car Professionals Exist For Franchised Dealers?
In reality only a lucky few will be able to employ the professionals they require, the rest will need to be developed and trained, and at a time when none of you are running, (or have access to from your parent manufacturer), the personnel development and training programmes required. Luckily though 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 and personnel training 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 dealer network 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 and been at the forefront of the development of approved used car business development and personnel training programmes for a host of manufacturers and franchise dealer networks. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and personnel training 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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