Linda Jackson became managing director of Citroën UK at a challenging time for the company: her predecessor had left after just a year, she was without a commercial director and dealers had expressed concerns about the direction the brand was being taken.
Four months into the job, she is confident of the partnership the company will have with its dealer network in growing its market share.
AM: What have been your priorities since taking over as managing director?
Linda Jackson: The strategy for the brand hasn’t changed since the announcement of the new corporate identity 18 months ago. So, the priorities remain the same: we need to address dealer profitability as well as our own and ensure we are in a partnership with our dealers. Customer satisfaction is key to the dealer network as well which is why we’re spending so much time on this with them because it all adds up to the key strategy of improving brand perception. This could come through increased customer satisfaction and experience and the range of new products we have, such as C4, DS4, DS3 and C-Zero.
AM: In what state is your relationship with the dealer network now?
LJ: Clearly I recognise we had an MD who left after a fairly short period of time and people will see an element of instability in the organisation. But amongst the management team, most of them have been in place for some time.
But having said that, my first goal is to ensure stability. I’ve appointed a new sales director, Charles Peugeot, and a new director of dealer development Stuart Hodge, previously Citroën UK director of parts and services, app-ointed on September 1. He has been replaced by Sally Smith, new to Citroën, who has experience of running dealerships and also with other manufacturers. Charles is also known to the network because he was our head of commercial vehicles.
So, there’s three key appointments I’ve made. I was also finance director of Citroën UK previously and so already know some of the dealers and the dealer council.
AM: When you say there is a need to bring stability and confidence to the network it suggests these have been lacking. Is this the case?
LJ: Confidence in the dealer network is something you have to keep working on. It’s inevitable that when you see your retail market share fall sharply and you have an MD that leaves, it creates an air of uncertainty.
AM: What is the network level of profitability now?
LJ: The average return on sale is 1% this year to the end of August. This is the best year-to-date position for six years and 11.9% better than 2009. Over the past several months we have been achieving 1.8%. This is cumulative and obviously in the first part of the year sales were down.
AM: Is all the network running at a profit?
LJ: The top 75% are running at 1.4%. Some dealers are not running at a profit. It’s a fact in a certain point in time, but we won’t accept some running at a loss. They’re our partners and it’s in our interest to work with dealers to move profits forward.
AM: What’s your RoS objective for the network?
LJ: We need to get to 2-2.5%. Improvement in profitability has to be our goal. But having only been in this post for a short period, I’m not bigheaded enough to say we have to get there in a certain timeframe. Our aspiration matches the strategy to move the brand forward with new models.
We’re working now on a number of 2011 dealer programmes that I can’t talk much about as we’ll reveal them at our dealer convention on November 2.
We’ve started the process already with free servicing on some models. And we have established working groups with dealers, one looking at sales and another aftersales.
We will be looking at improving through-put of retail hours in dealer workshops and improving our parts business as well as ways to attract the best technicians to our workshops.
AM: How are you personally going to engage with the dealers?
LJ: I made a video for dealers where I talked about our strategy, as did Charles. I’ve also started visiting them and have made nine visits so far. My goal is to spend five days each month on these visits which I have stuck to so far. But since we have 200 dealers I will meet groups of them at regional meetings, with Northern Ireland this month when I met around a dozen.
AM: Tell me about the new corporate identity. You want it in place by the end of the year?
LJ: We are trying to speed up the implementation to have all dealers with the new exterior by the end of the year and interior by the end of May 2011.
There’s no one standard cost for a site, but a range of measures to which each business would have to apply the new CI.
We think the corporate image costs to a dealer are roughly £20-50,000 as an average.
Some standards are mandatory for the exterior and interior of the dealerships and we are making a fixed contribution to the costs for each. In addition to this we are giving additional support to dealers who complete the changes by the end of this year.
AM: How would you summarise the new CI from a design point of view?
LJ: It’s a modern-looking design; very clean and makes the building stand out. It’s predominantly white with the red chevron and red cladding around the workshops. The feedback from dealers has been positive: their staff say their sites are better places to work.
AM: With a depressed market, lack of consumer confidence resulting from increased VAT next year and the shadow of government cuts, is this the right time to be insisting on new CI standards?
LJ: There’s never a good time. The new CI is essential and every dealer you talk to would agree because it brings so many advantages. Dealer profitability is at the front of my mind and many people’s minds and that’s why we have made financial support available for CI.
AM: The summer 2010 National Franchised Dealers Association Dealer Attitude Survey saw Citroën score below average in a number of key criteria: most valued franchise at 4.7 (average score 6.9), future profitability 2.5 (3.4) and how realistic VM standards are measured against investment and rewards 2.2 (3.2) for example. What is your view on your performance?
LJ: I arrived in August just as it arrived. It’s interesting that some of the areas where our scores are disappointing are focused around profitability, standards and procedures – the areas we are focusing on and hope to address very quickly. The management team will have to look inwardly behind the scores to uncover the reasons and move forward.
AM: So, in six months when the next DAS survey results are published we will see improvements?
LJ: We can’t have the successful partnership I want with scores like these. We should be looking at much better dealer profitability, a new product cycle in full swing and the new people I’ve appointed and the impact of the CI driving an improved performance.
AM: Earlier this year there was concern about the speed at which Gary Savage was pushing Citroën in a new direction, away from being known as based on price – that customers could always drive a deal on. Dealers didn’t question the principle, but the pace at which they were expected to change prompted fears of a “meltdown”.
LJ: I can’t criticise a former MD. But where we are now in terms of our brand positioning is where it should be. We are never going back to the days of cashbacks.
Our strategy from May/June is the right one: our offer is competitive and we are growing market share. It’s important to talk about how we achieve our goals rather than the speed at which we’re travelling.
Our market share has grown since quarter one and improving month-on-month.
AM: What is your market share now and your target?
LJ: At the end of August it was 4%. September looks like we’re aiming at 4.5%. This would be our best peak month since March 2004. My strategy is to increase our market share, backed by the launch of new products like C4, to a sustainable 5%.
AM: Concern has been expressed that the Citroën Retail Group is under-cutting other dealers and is being unnecessarily desperate in ‘buying the deal’.
LJ: Citroën Retail Group gets no special deals. It gets exactly the same campaign as other dealers and with the new CI, it gets no different treatment.
AM: There are suggestions that Paris holds the reins and makes the important UK decisions and is used to communicate all bad news now. This was one reason why Savage left.
LJ: I don’t know why Gary left. I only met him twice and so you should ask him. But an advantage I have over him is that I’ve worked for Citroën since 2005, I speak French and know the French culture (she has been finance director of Citroën France and financial controller for Citroën UK).
I can fight our corner because I know the people I need to fight to get the best deal for the UK. But the power to determine UK strategy lies with Citroën UK. We set our volumes, objectives and campaigns.