AM interviews Adele Feeney, managing director of Reynolds and Reynolds UK, and finds out that the DMS provider is expanding with commercial vehicle dealers and driving efficiencies for its customers.
What has been the biggest growth opportunity for the business over the past 12 months?
We took the decision three-to-four years ago to invest in the HGV dealer management system (DMS) sector. We’ll start the rollout for that in September. Some other products can just be converted car DMS, but we know these retailers have very specific requirements and so it’s been developed with their businesses in mind. In hindsight, it’s been fortuitous that we have invested in the commercial vehicle sector because those retailers have not been as badly affected as the car market. A lot of the HGV specialist dealer groups kept running to help the logistics sector keep moving during the lockdown and they continued with sales, too. We now have 50% representation of the Daf network and we’re also working with the other manufacturers like Iveco and MAN.
Retailers use so many different systems to aid their businesses. What are you doing to help cut admin?
The utopia for us is having a single point of data entry no matter what application it is you’re using. So, we’ve been working on that project for a long time with our own products so now, when you have a single point of data in
Contact Advantage, that will speak to every one of our other systems like Power DMS or Retail Management System (RMS). There is no rekeying of data.
What about third party integration? This is an area some dealers get frustrated with.
We are open to third-party integrations with our systems because there’s no point fighting against that. What we’re working on now is making sure that works with third party solutions too in the same seamless way across all our
systems. That’s always a movable feast, so we’ll look at integrations if we have an OEM preferred solution or if there is a solution that 10-20% of our customers are using.
Retailers often tell AM that swapping DMS providers can be one of the most difficult things a business can do. Is it getting any easier?
Any change to that level is going to be difficult to a degree, but I feel like we’ve put measures in place to make the transition as smooth as possible. We always say there’s a minimum of 16 weeks from signing the contract to going live and we will never deviate from that. You need that time for the systems to bed in, for everyone to familiarise themselves with the new software and, more importantly, for the dealer group to be ready. Provided the customer follows the project plan timeline there shouldn’t be any problems with switching systems. I would be happy for any one of our customers to chat to a prospect about how we performed when it came to switching their DMS to Power.
Contact Advantage has been part of the business now for almost five years. How are you making sure it’s a product that is staying at the forefront of the customer
relationship management (CRM) market?
We’re actually looking to roll out a major update for Contact Advantage and, while the company name will remain, the changes have been so comprehensive, we’re calling the product Claro. We hired a user interface and digital design expert and it’s made the management dashboards really intuitive. Claro is in pilot now and we’ll start rolling that out across our customer base at the end of September. Claro allows for a high level of customisation with data and what users want to see in their
reporting. It means we can get really specific on the types of things specific job roles want to see when they get to their desk each morning.
What are your aspirations for taking market share in the UK?
To be brutally honest, we really don’t think about market share when it comes to our growth aspirations. We’re focused on organic and profitable growth and market share doesn’t come into our KPIs as a business. Having that focus on trading profitably and aligning our cost base to income we can guarantee has set us up really well to perform when the market is hit with challenges like the recession or now with the COVID-19 pandemic.
How has the business been affected by COVID-19?
We haven’t really put anything on hold. Development and recruitment has continued and we were in a position where we didn’t need to furlough anyone on the team in Birmingham or Glasgow. We have recruited 12 new starters during lockdown. Our IT team managed to get us up and running within 48 hours of the lockdown. Our chairman looks at downturns as the time to over-invest and that’s set our business up well to be resilient. As a private company, we can dictate our own future and we have remained acquisitive with Go Moto in February. This is another fortuitous move as that business helps facilitate self-service with workshops so customers can check-in on touchscreens and drop off keys or pick them up when collecting their car. We’re working on customising the software side now for a UK launch before the end of the year.
What measures did you put in place to support dealers during the lockdown?
We were really proactive with support measures by pausing all charges for two months with the agreement of a short extension to contracts on the other end. We have customers that have their server hosted online with us or some have their own physical servers. For those online, it was easy for them to transition to working from home during the lockdown, but we supported those with physical servers by facilitating the ability to connect to their systems remotely. Those physical servers also need manually backing up , so we offered that service for free where we would normally have charged for it. Some needed more licences to add access to their systems for those working from home, so those were made free too.
Do you think there have been any positives for automotive retailers as a result of the lockdown?
I I think expectations of suppliers are higher now than they have ever been. When dealerships were closed and some staff were furloughed, the senior teams at dealer groups took that time to further review their business and supplier relationships. It’s definitely prompted the thought process to look at how we can help drive further efficiencies for dealerships. They’re looking at their supplier relationships and value very closely right now. You’re always striving to have customers use 100% of your product’s capabilities and it’s very difficult to reach that, but I think lockdown has definitely put a focus on groups wanting to get the most out of what they have paid for.
What do you think are some of the biggest threats to the automotive retail model?
There’s an inevitability that the lockdown will make people even more comfortable with completing transactions online. Things like electronic signatures and e-deal jackets are becoming more commonplace and I think that’s something that will gain more traction in the automotive retail market. There is probably going to be a different commercial model between OEMs and dealers on new cars. I can also easily see how the next generation of car buyers will move from HP, to PCP, to PCH to a frictionless subscription model that’s packaged in the right way. I still think there will always be a place for dealerships and as long as the industry embraces change, which I think it always has done, then online sales doesn’t have to be a threat.
What is the biggest threat to your business?
There is a lot of consolidation going on right now between brands like PSA and Vauxhall and FCA. There have been withdrawals from the market like Mitsubishi and manufacturers are looking at rationalising their UK dealer networks. So, there might be a smaller number of dealers out there, but I think that always creates opportunities too. If the networks are changing that also provides opportunities to review suppliers. Another threat for everyone in the industry is delaying decisions and pushing back install dates. Everyone is in that same boat but it’s only going to be temporary so it’s not something we’re overly concerned about. It’s difficult to say when that might change but I’m optimistic by the start of next year the confidence levels will return and the level of uncertainty everyone is feeling may improve. There does come a point in time when, as a business, you have held off on a decision as long as you can and you just have to start moving forward.