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Lexus UK incentivising dealers' 'exceptional' customer service to boost fleet sales

Lexus ES F Sport

Lexus has changed the way it deals with business customers and fleets by incentivising dealers to deliver ‘exceptional’ customer service as well as registrations.

Historically, the brand has focused its fleet business through six dealers but, from January this year, it introduced an initiative to increase its number of business centres to 30, as well as offering additional headcount support.

Ewan Shepherd, director of Lexus, said the previous arrangement meant “the whole network didn’t really try hard in reaching out to the local fleet market” because it was centred around those six dealers.

He added: “The five or six dealers that were active in national fleet have now refocused their attention on untapping the opportunities on their doorstep which they didn’t before, but we have now engaged many more dealers in the network with reaching out to small businesses.

“All manufacturers have fleet bonus programmes, but we are differentiating the rewards for effectively selling to small businesses in their local market area and we want to do that for two reasons.

“One is selling locally, and the second reason is to give a level of service to fleet customers which is exceptional.

“We don’t just check a vehicle has been sold, we check the level of satisfaction in the experience of that particular customer and we reward against that.

“What we are trying to get is loyalty to the centre, but also advocacy for Lexus in the area, so to put some emphasis on it we have placed rewards against that.

“In addition to that we support the network with headcount support, so we maybe go 50/50 with the costs of a business centre manager so the dealer can go out and get higher quality people to represent the brand in the given area they are in.

“We are already seeing are realising that there is quite a lot of interest, partly because hybrid is now in the ascendancy, but also because we have got a broader range than we have ever had before.”

Shepherd was speaking at the European unveil of the ES executive saloon, which will replace the GS in Lexus’s current UK line-up at the end of the year.

It will be available only with a hybrid powertrain and Shepherd expects it to sell 1,000 units for the full year – more than double the GS’s figure for 2017.

Shepherd added: “ES is in a segment which is a busy one in the UK market with the three German brands in there and, of course, Jaguar.

“Our brand is quite niche. We don’t go into the market expecting or planning to offer big discounts and we have no big aspirations to sell big volume.

“I would see the people who have bought Jaguar XFs are who we probably will get a few inquiries from, and I’m already hearing that this is indeed the case.”

As a brand, Lexus has a target to increase its sales volume across Europe to 100,000 from the 74,000 it registered in 2016.

The UK’s contribution to that goal is to increase its sales volumes by almost 50% to about 20,000 units by 2021. Last year it registered 12,670 cars, 1,245 fewer than in 2016.

However, this year, to the end of March it registered a total of 3,006 vehicles, a 4% increase (+118) compared to the same period last year.

In an interview with AM last year, Shepherd said the network shares his confidence that the goal can be achieved.

They have been buoyed by the success of the NX crossover since its launch in 2015, and this will be followed by a smaller UX crossover next year.

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