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Companies must build on inter-action with buyers

As the review of Block Exemption draws ever nearer, it is worth remembering recent estimates have predicted a cull of up to two-thirds of Europe's dealerships over the next few years.

If, as many commentators predict, Block Exemption is lifted or heavily diluted next year, dealerships will find themselves in a much more liberalised market but with new competition coming at them from all sides.

Internet retailers, import retailers and even high street supermarkets will all want to get in on the retailing side. Banks, finance houses and leasing companies also have an interest in the wider arena of car supply arrangements.

Most of the major car companies are on record as stating their desire to capture more of the revenue stream associated with vehicle purchase, ranging from insurance to holiday bookings.

Historically they have 'franchised out' ownership of the customer to the dealership but this could change. For dealers and manufacturers alike identifying, anticipating and realising the true potential of these associated sales will not be easy without a cutting-edge customer relationship management (CRM) system. As Ford Motor Company chief executive Jacques Nasser recently said, “the focus must move from making the sale to owning the customer”.

Businesses should be looking to build on every interaction they have with their customers. Managing this process is best done by a cutting-edge CRM system as consumers are tired of being bombarded by mass marketing, preferring instead an intelligent approach that treats them as individuals.

CRM is about recording customer data and analysing it for the purposes of 'intelligent marketing', targeting new sales before the customer has even thought of buying. This is supported by information technology and data warehousing systems and requires staff to be trained on customer relationship management techniques. In itself this requires the whole culture of the company to change and focus on the customer, making change management processes an important consideration for all these businesses.

The uncertainty of many businesses over what to do next stems from the fact that there is no clear business model which will outlast the others. It is a confused picture at the moment. Several major manufacturers have been quietly setting up joint ventures with the larger retail groups.

Dotcom brokers – who may expect to do well post-Block Exemption – are already being outfoxed by currency movements and servicing could move into 'sheds' on business parks where existing dealership groups, as well as manufacturer-approved new entrants, service a variety of marques. Sales could be concluded in a small, modern urban facility with a videolink to a finance broker and bookable test drive slots. Existing independent volume car retailers could become supersites, competing head-to-head with manufacturer networks.

In fact the whole car market profile could swing to small economical cars as user-choosers drop out of company car schemes and the tax regime adapts to environmental legislative pressures.

However, once this has settled down, it may well be decent CRM techniques which differentiate one business from another. There is still time to initiate these processes.

In an ideal world, properly implemented CRM techniques could see the industry move from the 'stock-push' system to a 'customer-pull' system which uses the customers' needs, as opposed to those of the dealer or manufacturer, as the starting point.

As the average customer becomes much better informed, managing the relationship with that customer becomes vital. As they slowly grow to expect their cars built to order, those businesses which manage their customer relationships best will be the ones that survive and thrive.

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