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How to efficiently manage your supplier contracts

outsourcing data

With so many suppliers needed for the smooth running of a single dealership, let alone a multi-franchise group, managing contracts to ensure efficiencies and value for money can be a challenge for time-poor dealers.

Robin Luscombe, managing director of Leeds-based Suzuki and Mitsubishi dealership Luscombe Motors, said: “We try very hard to do most things in-house, so we don’t subcontract important roles out. AutoTrader is a unique case, and while we do have a monthly meeting with our local rep, we have to discover new things and ways to make our adverts more appealing ourselves. But this does have advantages, as we discover unique and different ways to present our cars.

“Depending on which supplier and how crucial or expensive it is dictates the time and resource we spend analysing the results. AutoTrader, which is a very large expense, is monitored daily and compared against our competition to ensure we get the best possible results, but many other suppliers are measured more on customer service, and quality, as results from all can be very difficult to measure against sales or ROI.”

Alongside Williams Automobiles’ speciality business in Morgan, Lotus and Caterham vehicles, managing director Henry Williams has developed an accessories business that sources products from about 10 niche companies.

He said: “Often they have never dealt with the motor trade, so we are their sole client in the sector. The products we sell are bespoke and I manage the relationship on a one-to-one basis. We have a good relationship with them and it works very well.”

Digital agency Marketing Delivery has created its own reporting mechanisms to keep clients informed on account performance and ROI. Managing  director Jeremy Evans said: “Stats and reports generated from the activity we carry out for our clients are reviewed by an experienced account manager who can give insight and advice based on the data we see.”

Revive, which has the largest network of accredited SMART repairers in the UK, has developed systems to keep track of spend, volume and quality across multiple sites.

“Stats and reports generated from the activity we carry out for our clients are reviewed by an experienced account manager who can give insight and advice based on the data we see”
Jeremy Evans, Marketing Delivery

Managing director Mark Llewellyn said: “When we asked what sort of volume of repairs were carried out, we were quite shocked to understand that most dealer groups had very little idea and certainly no control on volumes, prices, process (including health and safety) and quality.”

Jardine Motors Group’s updated website perhaps shows a new way of contract management and service delivery. Online finance tool provider iVendi worked in partnership with the group’s website provider, GForces, to develop an enhanced web presence by integrating finance tools.

While most dealers recognise the difficulty of effectively managing its myriad contracts, others turn to a management and procurement company for help.

Dom Threlfall, dealer principal at Hyundai and Suzuki dealership Pebley Beach, said: “We utilise ‘Purchase Direct’, which is basically a cooperative buying group. They have

negotiated a costs matrix for all the usual utilities, but it is extended through to valeting, coffee supplies, etc.

“When I add up the amount of time I would spend monitoring, analysing and negotiating the costs, it’s cost-effective for me to pay the subscription fee, which frees up my time to concentrate on other areas of my business.”

Purchase Direct proprietor Rupert Ashley identified two types of suppliers, mission-critical and commodity, and believes dealers have a variety of opinions on the way they rank their suppliers on this scale.

He said: “Often this is down to the skill of the supplier in elevating their service from commodity to mission-critical. Clearly a dealer will pay more of a premium for a service they view as mission-critical.

“Our experience is that our customers are happy to move suppliers where they view the service as a commodity, but once the device is viewed as mission-critical, we’re much more likely to be re-negotiating.”

Ashley said commodity services, such as utilities, stationery and waste, are relatively simple to manage, as long as suppliers are dependable and reputable. However, mission-critical suppliers are more complex, especially where services are provided and measurement of the quality of service is subjective.

“These suppliers are typically managed by one key dealer contact and ‘distance’ is essential to keeping the contract on track. Get too close to a supplier and it’s hard to have those tough discussions on quality or price.”

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