Andrew Alderson, the founder and chief executive of independent light commercial vehicle retailer Vanarama, shares insights into his career and his management challenges.
What are the main responsibilities of your role?
To use a sporting analogy, I think my responsibility is to be the football manager for the team. Ultimately, it’s my target to take Vanarama from the Premier League to the Champions League. That relies on me and my coaching staff (senior leadership team) putting the right long-term strategy in place. But, short-term, I also have to ensure the team tactics are spot on, the squad is strong, and we have a recruitment strategy that reflects that. This also includes constant competitor analysis and learning from other teams (businesses). Then, with the right team, tactics and strategy in place, I put my faith into that team to come together to execute the game plan by winning new customers, retaining existing customers and opening new areas for the business to exploit.
What are the most significant challenges in your field?
The move to subscription-based habits and online purchasing means our industry needs to be overhauled completely. KPMG estimates that up to 50% of car dealerships may disappear by 2025 or sooner. 98% of our customers have never test driven before they lease from us. 65% of consumers, in general, don’t test drive before they buy. Our customers are spending 1,400 hours per month on our site researching vehicles. So, my most significant challenge is to be agile to the pace of change by putting customers at the heart of our business. If they want to access cars online, then that’s what we need our business to do for them. And do it well.
How might these challenges be overcome?
Digital transformation. We’ve seen manufacturers and dealers try to spin up online businesses during the pandemic in a matter of weeks and rightly so. But, having a website is only one part of the equation. And it’s a complex one in itself. You also need to be able to sell products through Facebook Messenger – we’ve sold more than 1,000 cars through our Facebook Chatbot, iVan. You need to integrate that with Instagram which we’re doing right now. So, every digital channel becomes important because they’re vital customer touchpoints. To succeed you need omnichannel presence and contact centre mentality. We’ve been doing this for 15 years and we offer click and arrive instead of click and collect. We offer a best-in-class ecommerce platform where our customers can select from thousands of vehicles and have one ordered in a few clicks. This takes investment, time and the right expertise so it’s not an overnight fix.
What attracted you to this area of expertise?
I’ve seen customer habits change over the years from vehicle ownership to vehicle usership and moving to online. From previous roles at dealerships I’ve seen first-hand customers sign up to long, expensive PCP contracts with huge balloon payments at the end. I always felt there was a better way and that’s why I started a leasing business. Vanarama offers smaller deposits, affordable monthly payments and no lump sum due at the end. For me it’s always been about offering the convenience, value and selection. You don’t get that with traditional car buying. There’s no need to sit in dealerships and haggle.
What’s the most important thing you’ve learned in your career, and how have you made use of it?
I’ve learned the importance of building a brand. When you’re in a sector as fragmented and competitive as we are, you can’t afford to rely on price alone. Many things make up a brand, especially customer experience. But the biggest element is fame. If your target audience has heard of you when they type a term into a search engine or social media platform, then you’ve got half a chance. Building a brand is expensive, particularly at the start, but it pays off in so many ways and not just in terms of customer acquisition costs.
What drives you?
Working with the talent we are able to attract really drives me, it’s exciting to be part of their development and what they can do to develop our business.
What’s your favourite app?
How do you relax?
Family holidays, dog walks and long lunches, preferably all at the same time.