Franchised and independent businesses joined AM for our Roundtable in the north-west of England, sponsored by Ai Claims Solutions.
Key topics for discussion were how dealers are fighting the downturn, supplier and consumer behaviour, customer retention and accident management.
Surviving the recession
Delegates felt that scrappage had certainly brought new customers into their dealerships and helped sustain the industry through the last 10 months.
At Fiat dealership Corts, scrappage had accounted for 42% of its sales, said managing director Richard Cort.
However, some franchises rewarded their dealers poorly compared to others which still provided significant profit margins on scrappage sales.
Service promotions have also been helpful in enticing motorists into franchised workshops.
At Bolton Kia, managers have developed fixed-price basic services which help to keep its substantial workshop full, explained Alex Purdie, head of retailing.
It also provided an opportunity to offer additional sales, such as air-con services or replacement tyres and ensured contact was maintained ahead of when they might decide to change their car.
Cort agreed that the aftersales experience was key to keeping the customer coming back and eventually selling them their next car.
In his view, the service receptionist was the most important role in the business, and should be rewarded as such with a good basic salary and car.
And although Cort’s service receptionists were incentivised on their performance, he said he was uncomfortable with upselling, adding: “Either it needs doing or it doesn’t.”
Although accident repair was a distress purchase and customer retention was not such an issue, a good bodyshop should treat the customer as an individual, said Malcolm Duxbury, director of Walshaw Motor Bodies.
In such circumstances a customer may be agitated and staff must spend time with them to explain the process.
Training and renewing the skills related to selling was vital now that scrappage had ended, delegates felt.
With scrappage having removed the need for staff to appraise many trade-ins over the past 10 months, the dealers suggested that this skill and sales negotiation would need to be honed.
Some delegates felt that manufacturers’ sales training, paid for by a levy, failed to deliver real value and was often based on out-of-date principles.
There was concern that some franchises failed to conduct a fundamental training needs analysis of their dealerships before mandating courses.
Daniel Kirkham, a regional aftersales manager with Kia Motors UK, said it now conducted training needs analysis and was trying to tailor courses to dealers’ needs.
It was suggested that a softer process was necessary with today’s car buyers, most of whom researched their purchase online ahead of their visit, rather than a “try to nail them on the day” approach.
As Purdie stated: “Process is important, but it has to be a soft process.”
All agreed that the basics of meet-and-greet, qualification and providing test drives were absolutely essential elements of the sales process.
Some of the suppliers and services which dealers relied on were still stuck in the past.
Delegates felt that banks and finance companies were not supporting
motor retailers sufficiently – their decisions could quickly and ruthlessly pull the rug out from under their clients.
Slow decisions from finance companies were also blamed for lost
business and a negative customer experience.
Getting the customer more quickly on the road in their new car looks set to be a hot topic for the future.
Purdie said his ideal would be to allow a customer to drive away their car on the day of purchase.
One useful tool to help achieve this was free seven-day insurance for buyers – more than 50% of Bolton Kia’s customers have taken up this offer.
Shahzad Anjam, executive director of Cambria Automobiles, said he had enhanced commission to encourage staff to get cars out within 48 hours.
However, it hadn’t worked because of reliance on third parties such as finance to play their part quickly.
Cort said: “The level of service and urgency in a finance company is app-alling. Our sales executives have a burning desire to close a deal, but there’s no burning desire at the finance company to get back to us.
“We’re finding that if the customer is not squeaky clean it can take days to get an answer to their application.”
Delegates agreed on the need to regularly review their suppliers. At Bolton Kia, an employee annually sources three quotes for major commodities, power, gas and insurance.
The internet had given today’s customer every opportunity to prepare for their buying experience.
Information was prevalent about new car specifications, options, prices and used car values, and dealers felt that some customers could be very aggressive in negotiations.
Some even found they were prepared to check online after signing a deal in case they could get a better price elsewhere.
Chris Shaw, commercial director of Ai Claims Solutions, raised the point that some buyers still had a perception that dealers and manufacturers made far more profit out of a new car than they actually did.
Shaw’s colleague, Nigel Gilmore, Ai Claims Solutions’ head of automotive, suggested the RMI could do more to correct that perception.
Anjam questioned whether it was an issue of margin or the confidence
of staff to tackle difficult customers because their training was classroom-based.
Shaw urged delegates to consider their supplier of accident management services as it could be a useful tool for customer retention.
He pointed out that some major rivals of Ai Claims were increasingly having to fight in court for their credit hire charges, which could impact on dealers’ relationships with customers who were called to testify.
Shaw also warned that insurance companies will be looking for ways to keep their policyholders within their approved lower-cost repair networks.
They wanted to combat telematics which were likely to give vehicle manufacturers and their franchised networks an upper hand by alerting them when a car had crashed.
- Malcolm Duxbury, Walshaw Motor Bodies
- Shahzad Anjam, Cambria Automobiles
- Alex Purdie, Bolton Kia
- Richard Cort, Corts
- Daniel Kirkham, Kia Motors UK
- David Moran, RMI
- Chris Shaw, Ai Claims Solutions
- Nigel Gilmore, Ai Claims Solutions