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Benchmarker
Sharing best practice strategies                                                               CHINA                               Issue 4 / 2012
with global motor dealers

                                                        A simply powerful conclusion emerges from the PROBE feature in this issue of

Benchmarker

PROBE
                                                        BenchMarker: real business success in a retail automotive enterprise has to be
                                                        underpinned by an infallible capacity to achieve exceptional customer satisfaction.
                                                        Paddy O’Brien, who makes this particular observation, and Greg Strydom, offer this
                                                        and other best practice insights which regularly emerge from the wide spread of
                                                        performance group sessions held across Sewells Group markets in Asia Pacific and
                                                        Africa, and some other countries alongside. Over 19 years, the Sewells performance
                                                        group initiative has become a key element of heightening the business performance
                                                        of motor retailers in whole countries. It’s nice to realise these improved returns stem
                                                        from thousands of motorists who really like being so well looked after.
                                                                                                        BENCHMARKER IS GLOBAL
 A SPREAD OF ESSENTIAL READING                                                                          Presently there are five different quarterly
                                                                                                        editions of BenchMarker focused on

Contrast is part of the package                                                                         sharing best practice strategies in the
                                                                                                        numerous markets where Sewells Group
With media focus on the lingering EU ‘debt              Look further and                                operates. There are digital editions of issue
crunch’ and a looming ‘fiscal cliff’ in the             elsewhere in the                                4/2012 for email and Web distribution
United States, one tends to feel most things            world, at the                                   to dealers and OEM executives in China,
around us are threatening. In China there               phenomenon of
have been added complexities which have                 our industry’s
                                                                                                        India, Thailand, Indonesia and the
slowed some markets, including the auto                 participation                                   Philippines and a printed copy South
industry.                                               in social media                                 African edition. Each of these different
But these challenges (and the changes that              where everything                                editions has a core of features and articles
go with them) are continual in our business             moves in mega-                                  which are common to all, and some pages
where nothing stays the same for very long.             shifts. Now
                                                                                                        which are localised to suit the different
Contrast is part of the package; just as it             there are even
is in other sectors of the economy. In our              conferences                                     areas of distribution.
automotive retail though, one must constantly           devoted to
be impressed by the capacity of motor dealers           nothing else – our         Chee Tuck Yap, MD
to come up with the responses, every time.              social media guru,       Sewells Group China.     MUST READS
If you want to find ways to help push aside             Dimitri Kotov,                                   Measure your performance: A specially
any gloom, take a look at some of the                   attended a ‘digital dealer’ gathering in Las
                                                                                                         compiled table of key industry indicators
positives reflected in this issue:                      Vegas and brings us excerpts. His list of
Derik Scorer, who is chairman of the national           ‘take-aways’ is on page 5. Add to that our       in eight countries… ………………………………… 2
motor dealers’ association (NADA) in South              articles out of the United Kingdom which         Market holds in spite of boycott call………… 3
Africa, describes some of the unusual pricing           highlight how more and more budget is being
                                                                                                         Special contributor Dimitri Kotov looks at
and cost trends which have emerged there.               apportioned to honing the Internet profile of
For instance: in that market’s new vehicle              the motor dealer down the road.                  ‘Five Mistakes to Avoid on Facebook’……… 4
sector in 2012 real monthly costs of vehicle            Then, as prime proof of our capacity for         Global motor dealers staged the 2012
ownership have been reducing. He explains               finding solutions, spend some time on our        Digital Dealer Conference in Las Vegas.
on page 11, how frenetic competitiveness                PROBE feature on pages eight and nine,
                                                                                                         Read some take-aways… ………………………… 5
in the market, lower lending rates, longer              where close to 900 motor dealers across our
repayment periods, and many other factors               part of the globe each attend between two        Get in with the locals, urges Roger
have contributed to this anomaly. But,                  and four performance group sessions each         Whalley from the UK… …………………………… 6
of course, it isn’t all good news: there is a           year doing just that: diligently scrutinising
                                                                                                         Shoot and show for Audi customers………… 7
negative impact on the used car sector, and             each group’s businesses to chase down
the down-cost spiral in new cars there will not         the changes and the challenges and find          Sewells performance groups are targeted
last - rising unit prices will become a major           the appropriate best practice responses          on improving business performances.
challenge in 2013 and beyond.                           to them.                                         Here’s how they do it… …………………………… 8
                    Global Managing Editor - Dennis Anderson (danderson@sewellsgroup.com)                Seven steps to used car profits……………… 10
                                            Edition Managing Editors:
                               Australia – David Lowrie (dlowrie@sewellsgroup.com)                       Real motoring costs go down… …………… 11
                                                                                                                                    …
                               China – Chee Tuck Yap (cheetuck@sewellsgroup.com)
                                                                                                         There is the vital importance of VISION
                                India – Jayesh Jagasia (jjagasia@sewellsgroup.com)
                        Thailand – Supakorn Sookpunya (ssookpunya@sewellsgroup.com)                      in bringing a plan to fruition, says Paddy
                          Indonesia – Roselle Pantastico (rpantastico@sewellsgroup.com)                  O’Brien… ……………………………………………… 12
                             South Africa – Tania Barlow (tbarlow@sewellsgroup.com)
                                  Edited by Robin Emslie (twolakes@iafrica.com)


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Key industry indicators                                      Key Industry Benchmarks

This specially compiled table of key indicators     you towards achieving this we have provided
published here are guidelines to franchised         a column to record your own performance
motor dealers of performance in the listed          numbers. You will then be able to create a
countries.                                          collective discussion with your management
These have been assembled by the Sewells            team around why your performance should
Group operations in each of the countries           be better than the given indicator, and delve
and represent current ‘Best Practice’ norms in      into the factors which might be restricting
each of these countries. Each line item is an       your business from achieving these levels of
independent key indicator.                          performance.
Sewells believes in measurement as a                Finally when conclusions are reached, the
critical business management practice – if          key points of these discussions can then be
you measure your performance and can                converted into actions for the management                       Dennis Anderson
compare it to an industry indicator you are         team with clearly defined targets to be                      danderson@sewellsgroup.com
in a position to evaluate and potentially           achieved.
improve that area of your business. To help


                                                  SEWELLS GROUP KEY INDICATORS – JULY 2012



                                                    New                                 South                                                  Your
                                      Australia                China        India                   Indonesia Phillipines Thailand
                                                   Zealand                              Africa                                                Figures

 Dealership Overall
 Total Dealership Gross
 Profit % of Sales                    14.8%	       14.3%	      8.7%	       10.5%	      15.6%	       12.5%	     12.3%	       7.5%
 Total Expenses % of TDGP             76.3%	       81.3%	      77.6%	      71.0%	      74.0%	       72.8%	     79.5%	       62.0%
 PBT % of Sales                       3.5%	        2.8%	       1.9%	       3.0%	       3.7%	        3.18%	     2.6%	        3.9%
 Asset Activity                       6.5	         5.6	        4.4	        5.2	        7.8	         4.8	       4.5	         6.8
 Return on Average
 Operational Assets                   21.2%	       15.2%	      8.6%	       14.0%	      23.6%		                 11.5%	       26.7%
 New Vehicle Department
 Total New Gross Profit % of Sales    8.5%	        7.8%	       4.8%	       4.8%	       8.5%	        8.5%	      4.5%	        5.8%
 PBT % of Sales                       0.8%	        0.4%	       0.1%	       0.5%	       0.8%	        0.9%	      0.9%	        2.8%
 Total Expenses % of TNGP             87.5%	       94.5%	      99.1%	      87.2%	      89.4%	       89.0%	     82.3%	       59.0%
 Inventory Days Supply                55	          48	         58	         34	         31	          45	        28	          21
 Used Vehicle Department
 Total Used Gross Profit % TUVS       10.5%	       10.8%	      7.6%	       10.2%	      8.7%			
 PBT % of TUVS                        0.9%	        0.8%	       0.8%	       1.1%	       0.8%			
 Total Expenses % of TUGP             86.3%	       86.5%	      88.1%	      71.5%	      87.0%			
 Inventory Days Supply                65	          40	         45	         37	         31			
 Parts Department
 Total Parts Gross Profit % of TPS    25%	         26.5%	      26.9%	      17.3%	      28.6%	       21.0%	     32.2%	       21.5%
 PBT % of TPS                         13.2%	       11.3%	      15.3%	      9.2%	       10.7%	       9.8%	      18.6%	       13.8%
 Total Expenses % of TPGP             60.5%	       76.8%	      63.4%	      49.4%	      59.6%	       47.0%	     43.6%	       36.0%
 Parts Inventory days                 50	          47	         63	         45	         21	          63	        65	          69
 Service Department
 Total Labour Gross Profit % of TLS   77.5%	       70.3%	      79.5%	      88.3%	      84.1%	       80.2%	     82.3%	       68.0%
 Total Service G.P. as a % of TSS     65%	         58.0%	      77.5%	      83.9%	      75.3%	       72.3%	     65.6%	       53.8%
 PBT % of TSS                         12.5%	       12.4%	      11.6%	      30.7%	      15.0%	       21.3%	     4.3%	        3.1%
 Total Expenses % of TSGP             79.3%	       79.3%	      83.5%	      60.9%	      79.1%	       68.4%	     92.5%	       94.0%
 Body Shop Department
 Total Labour Gross Profit % of TBS   		                       77.4%	      86.1%				
 Total Bodyshop G.P. as a % of TBS    		                       75.6%	      82.5%				
 PBT % of TBS                         		                       30.6%	      44.4%				
 Total Expenses % of TBGP             		                       11.7%	      26.3%				



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  Market holds in spite of boycott call

The Chinese car market held onto a slight
overall increase in spite of a Japanese
                                                  regions of the country, as well as in certain
                                                  segments such as premium cars and
                                                                                                              ‘…sales growth will
passenger car sales slump of close to 60          compact SUVs.’
percent at the start of the fourth quarter,       A number of market analysts have pointed                        slow to between
according to a statement from the China’s         to the fact that pressure is being exerted
Association of Automobile Manufacturers           on the whole economy to adjust to China’s                          five and eight
(CAAM).                                           new growth patterns. One report says there
There was a 5.4% increase in October and
year-to-date sales against 2011 were 3.6%
                                                  are now licence plate restrictions in cities
                                                  like Shanghai and Beijing and limitations on
                                                                                                                       percent over
up while only 98 900 Japanese branded             registrations in a total of four major cities.
vehicle were sold – 59.4% down on last            ‘It is important to note that while there                         next decade…’
year’s total.                                     are more than 150 cities in China with
The collapse of the Japanese brands               populations over one million, there are also
followed a bitter dispute after Tokyo             enormous growth potential in the lower-                percent over the next decade in line with the
nationalised an East China Sea island chain       tier regions with tier 4 and lower cities              central government’s desire for slower and
also claimed by Beijing, said the statement,      accounting for 89 percent of the population.’          more sustainable economic growth which
sparking huge protests across China and calls     Annual car sales growth is now generally               has been accompanied by the phasing out of
for a boycott of Japanese products.               expected to slow to between five and eight             auto subsidies, and the licensing restrictions.
Analysts say the row has affected Japanese
automakers operating in the country and
helped boost demand for other foreign
brands. Japan’s top three carmakers -
Toyota, Honda and Nissan - all produce in
China and have announced the scaling back
in production in the country following the
sales slump sparked by the backlash.
Toyota has now said it expects to sell 200
000 fewer vehicles in China in the second
half of its fiscal year. Japan’s Honda said
it was cutting its full year sales forecast in
China to 620 000 from its original estimate
of 750 000.


    ‘… industry reaches
       an inflexion point
      following a period
     of rapid growth…’

Another CAAM statement described
the China industry as having reached an
‘inflexion point’ following a ‘stimulus-driven’
period of rapid growth in demand from 2009
until last year.
‘Since then, the industry has sharply
decelerated, with total auto sales growth
slipping to 2.5% in 2011. In the 10 months of
2012, passenger car sales rose 6.7% year-on-
year to 12.6 million vehicles, while total auto
sales rose 3.4% to 15.7 million vehicles.
‘Although overall market growth has
decelerated, there is still sustainable and       This picture emphasizes Sewells Group’ growing global footprint covering Australia/NZ, the Asia Pacific and
healthy growth occurring in lower-tier            Africa: it shows the Sewells branding on the building housing its offices in Shanghai, China.



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  *
      Dimitri Kotov* Better Use Of Social Media


5MISTAKES
                                             to avoid on Facebook
Dealers certainly know what Facebook is; after all, in most regions including South Africa, Australia and
India, Facebook is the second most visited site after Google. There are lots of things that dealers can
publish on their Facebook Page, and there are no strict rules. Ultimately, one of my favourite ways to
learn is from other people’s mistakes.
So here I’ve compiled the five most common mistakes I see dealerships making when it comes to
publishing on their Facebook page. Hopefully, you’ll learn from them:




                   #1
                                             characters (less than three lines of text)   community events, such as local sporting
                                             dealers will see about 60% more likes,       clubs you may sponsor. When posting to
Mistake                                      comments and shares compared to
                                             posts greater than 250 characters. Posts
                                                                                          your page, your message will reach people
                                                                                          who are familiar with your dealership,
           – Too Wordy                       including a photo album, a picture or a
                                             video generate 180%, 120% and 100%
                                                                                          so insider content can make them feel in
                                                                                          the know. When you do post cars for sale,
                                             more engagement than the average post,       use the ‘Facebook Offers’ feature and
Facebook users prefer to consume
                                             so include them as often as possible in      provide your Facebook community with
information from the friends and
                                             your posts as well.                          exclusive offers.
businesses they’ve subscribed to on
Facebook through succinct messages.
By keeping posts between 100 and 200

                                             Mistake            #2                        Mistake             #4
                     Social media
                     manager Dimitri            – No Consistency                                  – Lack of Value
                     Kotov in Melbourne                                                   Members subscribed to your Facebook
                     works closely with      Consistency is the key to success on
                                             Facebook. Post at least five times a week,   Page are two times more likely to purchase
                     motor dealerships                                                    a car from your dealership than non-
                     around Australia and    and create a schedule and a regular rhythm
                                             for your postings and consider posting at    subscribers, so reward them for their
                     elsewhere showing                                                    loyalty by posting maintenance tips and
  them better uses of social media           specific times when engagement is highest
                                             (evenings in most regions).                  answers to frequently asked questions.
  to increase their brand awareness,
  customer loyalty and sales. He is


                                                                                                              #5
  now a regular columnist contributor


                                                                #3
  to all editions of Sewells Group’s
  BenchMarker publication. In this
                                             Mistake                                      Mistake
  submission he gives the Five Mistakes to
  Avoid on Facebook, and news from
                                                               – Irrelevant                     – No Interaction
  a recent digital dealer gathering in
  Las Vegas.
                                                                   Content                Let your subscribers know how to engage
                                                                                          with your content by including a ‘call to
                                                                                          action’. Should they ‘like’ the post? Share
Follow Sewells Group on social media:        If you’re going to publish every car you     with friends? Comment? You tell them.
Facebook: www.facebook.com/sewellsgroup      have in your showroom on your Facebook       Additionally, a great way to encourage
Twitter: www.twitter.com/sewellsgroup        Page, you’re doing it wrong. Instead,        more engagement is to ask open-ended
Linkein: www.linkedin.com/company/           post content that shows you know             questions and make use of Facebook’s
sewells-group                                your audience by making reference to         ‘Questions’ feature.



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                 Takeaways from DD in Las Vegas
                  In October Dimitri Kotov attended the action-packed Digital Dealer 2012 Conference
                  in Las Vegas, United States, and submitted this list of takeaway highlights for
                  BenchMarker readers:

                  n  he customer lifecycle has shifted, car buyers are now spending more time
                    T
                    researching online before making initial contact with dealership (11 hours spent
                    researching and reading reviews on average).

                  n  ealerships are outsourcing to vendors who are using automated software to re-
                    D
                    target in-market buyers at various stages of the life cycle.

                  n  ealers are acutely aware of how online reputation affects sales and are
                    D
                    outsourcing to vendors to help with reputation management (positive review
                    generation, monitoring and negative review notifications).

                  n  ebsites such as DealerRater, Yelp and Google Reviews are forcing better service
                    W
                    and offerings from dealers.

                  n  dvances in digital advertising now allow for more targeted forms of advertising
                    A
                    throughout the life cycle for higher ROI.

                  n  se of customer data is becoming more sophisticated, with dealers using
                    U
                    automated software to help with retention.




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  Get in with the locals

Roger Whalley has more than 20 years experience of running dealerships in the UK. Writing in Auto Retail
Manager magazine, he gives some sage advice on getting to know the business people in your area.


Local business people are often overlooked        the business, how many people they employ       accountants, bankers or the Chamber of
as serious prospects because they are not         and, if it’s not immediately obvious, what      Commerce could help. I held an event
exactly retail and they’re not fleet customers    exactly do they do. A simple walk around        recently where we invited the local council
either. But even in large cities there will be    town is a good way to start. Create an          Road Safety Officer to give a presentation.
pockets of private business people and in         up-to-date prospect list with details of the    Another one for example, used the local
the rural towns there are many folk on the        business owner and decision maker, who          police for a talk on security of premises and
High Street who would welcome regular             may be two different people. I have found       protection against theft.
contact from a friendly local dealership.         a very useful source of small business user
One clearly can’t expect to walk straight         details is often the local church or village
in and get an order. It can be a long job         magazine. In fact I have always tried to make          ‘… all your staff
and sales execs can become demotivated            sure my company has a substantial presence
if they don’t get an instant ‘yes’. It helps if   in these magazines. They are usually low                 should attend;
you allocate a group of prospects to each         cost and do influence local people. If your
retail sales exec, and make sure they are the
main (perhaps the only) point of contact
                                                  ad appears alongside the butcher and baker
                                                  then your initial contact with them will be
                                                                                                         it’s not just a car
with the dealership. Allocate a specific day      that much easier.
for your sales execs to visit their prospects.    They won’t all be useful to you, and you              sales opportunity.
Once a month might be too frequent for            can discard the ones who don’t have local
some potential customers in some areas. It        ownership initially. They might be of use              And don’t forget
depends on how they react at your initial         in the future, but for the first part of the
meeting. The intuitive sales exec should be       project you need the real locals.                  the “goodie bag”…’
able to pick up the vibes from the prospect       Don’t though, just make initial contact with
and schedule them in to a regular pattern         your newfound prospects and then ask them
of calls.                                         to give you their business. You need to give    All of these experts would, I am sure, give
                                                  them something first, so that they then         their time for free, so your only cost would
Finding your prospects                            become interested in you. What tends to         be refreshments. People are not expecting
The first few visits should be purely             interest business people is the opportunity     a lavish spread at this time of day, and a
qualification and getting to know them.           to meet colleagues and competitors in a         few sandwiches and snacks will do. All your
What cars or vans do they run, how often do       relaxed and friendly way, with no apparent      staff should attend as it’s not just a car sales
they change, what is their annual mileage,        pressure on them to give something back.        opportunity.
what goods do they carry, what sort of            Recently there has been a trend for thinking    And don’t forget to send your guests away
journeys, and so on. Once you have started        that breakfast meetings are the answer. I’m     with a goodie bag, not just a sales brochure.
to build a rapport you begin to increase          not sure they are. For many executives, the     Maybe a car care kit and a discount voucher
the selling activity. It could start with the     mornings are an important time for getting      for a service. It’s surprising what people will
                                                  things done.                                    appreciate, if they think it’s free.
      ‘… once you have
                                                  Evening event                                   Doesn’t end there
        started to build                          I have found that a casual evening event
                                                  with low-key catering works well, and can
                                                                                                  If the event is a success, it needs to be
                                                                                                  continued at fairly regular intervals, maybe
         a rapport you                            build strong bridges.
                                                  The best time is early evening, before they
                                                                                                  every three months so that it becomes
                                                                                                  something that people look forward to.
                                                  have gone home and put their feet up. It’s      And finally, following the first event, one of
       begin to increase                          very hard to get folk out after that. Midday    your sales staff should contact each person
                                                  is the hardest time, but I have had a lot of    who attended to thank them for their time.
           the selling                            success with meetings starting at about         Maybe this is when your staff could start
                                                  18.30 and ending no later than 20.00.           actively selling, but don’t push the hard sell
           activity…’                             With the offer of light refreshments and an     too soon.
                                                  interesting reason for the meeting, many of     The approach to the sale has also got to be
simple offer of a loan vehicle for a couple       your prospects will attend.                     tailored. Most small business owners and
of days, or a ‘special’ service offer – e.g.      It won’t be the prospect of viewing your        traders will have cash flow very high on
priority bookings for service visits, special     latest models that tempts them, however.        their agenda right now and would probably
discounted rates or arranging for collection      Model launches rarely work. It needs            welcome a sales proposal that takes the
and delivery.                                     to be more of a business seminar, from          utilisation of their cash into account. Leases
Start by building a dossier on local business     which your guests can glean some help or        and low start-up financial packages should
prospects. Find out who owns or manages           advice. Maybe one of your local lawyers,        be the first consideration.


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  Shoot and show for Audi customers

Audi technicians in the UK are now equipped     video is incorporated into the customer’s          with into the ‘shopping basket’, they can
with ‘Audi Cams’ which enable them to take      dedicated web page, and a secure link to           authorise them to proceed with the work.
a video of any potential problems to their      that page is then emailed to the customer.         Another innovation of the ‘Audi Cam’ is that
customers, according to a report in the         The page contains the relevant clips and           it gives customers audio-visual access to
magazine, Auto Retail Manager.                  grades each problem as ‘urgent’, ‘advisory’        their cars from the reception area as they
They use the hand-held video cameras to         or ‘for info’. It then gives a VAT-inclusive       are being worked on by technicians who are
film any problem they may identify during       quote for each job, along with action buttons      equipped with head-mounted cameras and
a vehicle inspection. These could include       to either authorise the centre to proceed, to      audio links.
things like brake pad wear or worn tyre tread   reject the work, to request a call to discuss      The Audi Cam is one of the outcomes of
depth. The video can then be sent to the        it. Once the customer has put all the jobs         the Direct Reception technology which Audi
customer’s computer or smartphone. The          he or she wants the retailer to go ahead           rolled out across its network last year.




  Rising social media marketing in US
Just a year ago, a survey found that only       a month in online marketing, not including         Use someone who knows how to write, who
12% of US small and medium businesses           advertising. Typically, this buys daily Facebook   understands your existing customers and
considered social media marketing a must,       and Twitter interaction, and up to five            where to find new ones.
with half of respondents not using it at all.   bespoke news stories, generated by at least
The same survey a year later, has found         one dealership visit in the month. If you want     3. It is solely digital
social media accounting for at least 25% of     more news than this, you need more budget.         List every medium your business uses to
marketing budgets at 77% of these same                                                             communicate with customers. Websites,
companies.                                      2. Youngsters are the best at working              email lists and social media pages are obvious
Regular Auto Retail Manager columnist John      these channels                                     linkable strands, but what about the rest?
Glynn writing in the latest issue points out    Would you send a teenager or recent                Online is the digital incarnation of your
that with these huge changes taking place       graduate to chair a critical business meeting      physical dealership, so tie the two together.
quickly, social media is what businesses say    at manufacturer level? It’s the same as            n  ut a Facebook check-in logo by the door.
                                                                                                       P
they need most help with. He goes on to         handing social media to a youngster. I speak       n ut ‘like’ thumbs in the windscreens of cars
                                                                                                       P
dispel some social media myths:                 from experience when advising against                  for sale.
‘If you’re spending money on social media       teenagers to max out social potential: it’s a      n  ut your Facebook and Twitter addresses
                                                                                                       P
while uncertain of its value or purpose, here   lot of pressure they are not equipped to deal          on business cards, sales contracts, service
are my top three myths:                         with.                                                  receipts, etc.
                                                Social media is business positioning to win        Anything and everything that happens in your
1. Social media is free                         a bigger audience, so how will prospective         dealership can inform your social media, but
No chance. In my experience, many social        customers respond to a string of mis-spelled       listen to what your business is saying it before
media customers invest a minimum of £400        X-Factor posts?                                    it goes online.




      Action points
      Ask yourself some questions:
      Look at all your social media initiatives: Do they all tie together?
      If you yourself don’t have the expertise in-house, consider hiring someone who knows what that should
      look like and harmonise your digital channels.
      Do you (yes, you) know what social media is all about? Have you set some goals?
      It all boils down to being bothered about this new way of doing business. Buy some training and learn
      some simple tricks to stir up interest. To be really effective, you need ideas. You need to plan when they’ll
      appear and how you will share them.
      Finally: Social media is not rocket science. Set time aside. Set cash aside. Set some goals and have fun!




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Benchmarker
                                                For more than 19 years – first in South Africa and now across a wide spread of




PROBE
                                                countries from Australia and New Zealand through the Asia Pacific region to Africa
                                                and the Middle East – Sewells has facilitated its performance groups with targeted
                                                objectives primarily focused on improving the business performance of automotive
                                                retail dealers. It is a remarkably successful concept with participation now of the
                                                top management people from close to 900 motor dealer operations. For this issue,
                                                BenchMarker’s PROBE delves into some of the outcomes which emerge from the two
                                                to four annual performance group gatherings of those motor retail executives finding
                                                best practice solutions to the challenges on the path to success.


Sewells Performance Groups

  How many; how they work
One of the key areas of the ongoing stretch     China	              292	        (234)           dealers. Participants are encouraged to
by Sewells Group towards continually            South Africa	       275	        (255)           openly exchange and articulate ideas which
improving the business performance of           Australia	          207	        (207)           then assist in enhancing performance and
motor dealers throughout the areas of           India	              57	         (54)            identifying as yet untapped sources of
its operation, is it’s facilitation on a wide   Thailand	           23	         (23)            additional profit.
scale of its world class performance group      ASEAN	              31	         (36)            Dealers emerge from the sessions and
concept.                                        Total	              885	        (809)           return to their businesses with ready-
Currently there are active performance                                                          made solutions and innovations which are
groups in each of the six different countries   Making this phenomenon real, is a group         immediately applicable.
where Sewells Group has hub operations,         of 15 to 20 facilitators, each with practised   One of Sewells Group’s often quoted
as well as in the countries making up the       and precise skills in driving the discussions   core beliefs is that successful dealers are
ASEAN grouping including the Middle East.       and looking for maximum outputs for all         those who consistently apply a proven
A total of 885 dealerships participate in       participators at each sitting.                  management model. The Sewells MRA™
between two and four performance group          The overall objective always is to get the      model is used as the key for this in the
sessions each year. Growth of the concept       group to identify the financial drivers,        performance group sessions as a high level
remains an indicative factor of its success:    processes and practices which lead to           financial and performance analysis discipline
last year’s PG count of 809 dealerships grew    superior business results. Always using the     which is used to bring the applicable and
by nine percent to this year’s 885.             relevant Sewells-produced benchmarks,           sometimes quite detailed factors to the table
A pointer to the attraction of the              leading best practices are identified;          for discussion and then embark on the probe
performance groups for dealers in the           dealership processes are assessed and           for corrections and broader solutions.
dynamically growing newer markets is that       analysed in an action-learning environment      Sewells MRA™ promotes improved retail
in China the PG dealership count moved          in order to understand and relate to the high   management through the ‘Mix’, the
up 25 percent – from 234 to 292 - and now       levels of workplace performance required        ‘Retained’, and the ‘Activity’ and through
heads the full 2012 list, which is (with 2011   for superior outcomes.                          these the facilitators and the group
in brackets):                                   The group sessions themselves are designed      members are accurately able to define the
                                                to be engaging and interactive and mostly       processes and competencies which might
                                                centre round the real problems, challenges      require improvement, and offer support to
                                                and rewards being encountered by member         address these gaps.




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  ‘Superb customer service = a robust platform for
  exceptional business performance’
                                                                                                                  – Paddy O’Brien
The sturdiest and most robust platform for           single- and multiple-franchise structures,      options for FI and used cars.’
exceptional retail motor dealer performance          and different kinds of business empires         Greg enjoys each group’s excitement when
is its capacity to consistently deliver superb       involved. In some countries motor retail is     a solution is first glimpsed, and then moves
customer service at all levels of the business,      just one part of a substantial business group   through to a successful outcome:
says Paddy O’Brien, chairman of the globally         with a spread of interest across a number       ‘Our MRA™ model has the discipline of
operating Sewells Group.                             of other consumer and industrial sectors.       getting everyone (in the group) onto the
‘There is no doubt that delivering exemplary         In other countries you have major groups        same page and drives a lot of the discussion
service to your customers should always              which operate large numbers of dealerships      and then everyone starts to see a business
be a prime business objective for those              across a full spectrum of automotive            starting to move in the right direction. There
wanting to succeed in motor retail                   brands, all in the motor industry. The          is an important PG dynamic which is to see
anywhere in the world. Those thoroughly              quality of discussion and focus on the basics   new people and new business join a group
satisfied customers are ecstatic and – more          doesn’t change much however: there’s            and then watch them start to mature and
importantly – they become the disciples of           a commitment to business performance            grow into their roles.’
the business going forward.’                         improvement throughout.’                        Another aspect is how the Group activities
This was one of a number of insights to              Both spent time talking about the rewards of    highlight and bring focus to the key
emerge from our discussions with Paddy               participation in the concept:                   challenges in the business.
O’Brien and Greg Strydom for this special            Paddy: ‘When you sit in and witness a           Greg: ‘There are cyclical tensions at the
BenchMarker PROBE feature looking at                 muscular and fit dealership growing still       interface between dealers and their
the way in which Sewells successfully                further to the point where it is firing         manufacturers; the differing expectations
facilitates its Performance Group initiative         dynamically and in perfect balance on all       from franchise to franchise; and the
throughout its operational areas (Asia               cylinders – that’s when there is real payback   concerns about stocking levels whatever the
Pacific and Africa region), and even in some         for the healthy and vigorous intellect          different sizes of the businesses may be.
instances beyond them.                               and effort which has contributed to that        ‘Also, the route to success is not necessarily
(See drop in panel below)                            outcome.                                        a simple, straight line. In the different
Both men referred to the distinctive and             ‘Also in a developing market where the          groups we come across different levels of
interesting market-related variations inside         dealers are perhaps skinnier and have less      investment, different size and number of
the group sessions taking place in the               muscle the reward comes when you see            facilities, different volumes… but the issues
different countries.                                 them disciplining themselves not to             usually get well identified and resolved as
Paddy talks about the scale of varying               succumb to the pressure of making each          more and more best practice examples get
evolutions taking place in meetings where            and every sale and sometimes denying            brought to the table. When everyone joins
the dealers come from markets which                  themselves (or being blinded) to the            the same learning curve, the excitement and
are more developed and those where                   other opportunities of gaining absorption       satisfaction is palpable.’
retail automotive is on an earlier part of a
maturation curve:
Paddy: ‘In the more developed countries it’s            Paddy O’Brien, chairman of Sewells Group, and Greg Strydom, Sewells
always a case of eking out every extra bit of
wisdom from the best practice experiences
                                                        Group Head of Client Solutions, gave their inputs for this feature in
being brought to the table and sharing these            the midst of busy schedules.
out among the rest of the group as you                  Paddy was speaking from Abu Dhabi airport whilst in transit to
stretch for better balance in the businesses.           Australia after facilitating performance and development groups in
‘In the developing countries it’s really a              South Africa late in November. Greg Strydom was back in Melbourne,
continual learning experience for all as each
dealer starts to realise more and more about
                                                        having returned from a business visit to Japan as well as participating
what can be achieved in a better balanced               in a facilitators’ workshop in Johannesburg. Paddy was scheduled to
modern motor dealership business. There’s               return to South Africa (via New Delhi and Beirut) where he was to
an atmosphere of a cheer about to break out             host a party of 10 leading India dealers on a four-day study tour in
as each one puts a foot on the next step of             mid-December.
the discovery curve.’
Across the spectrum, he says, the
                                                        Since he introduced the Sewells format Performance Group concept
performance group atmosphere – the                      in South Africa 19 years ago, Paddy has facilitated groups in at least 12
experience of each meeting – has its rewards            different countries – Australia, New Zealand, Philippines, China, India,
for all participators, including the facilitators.      Vietnam, Malaysia, Singapore, Saudi Arabia, Lebanon, Jordan and
Greg emphasised the importance of good                  South Africa.
financial reporting as an essential input for
the groups and the variances of the methods
                                                        Greg has held his Performance Group oversight position for the past
of reporting from country to country.                   five years after moving to Australia from South Africa 11 years ago.
‘You also work around the differences of


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B enchmarker
  There are real paybacks from follow-ups
A prospect is seven times more likely to buy from a dealership if they have been followed up within 72 hours of
their first visit says Jeremy Evans, the MD of Marketing Delivery, a UK based dealer marketing specialist, writing
in Auto Retail Manager.

One way of achieving this all-important              dealerships.                                       the technology that your customers are using
follow-up is by pre-programmed emails,               Communications generated by SmartMail are          every day. Email messages are compatible
which are distributed via highly effective           timely, relevant and carefully constructed to      with smartphones and tablet devices, and the
eCRM systems such as SmartMail. And our              encourage a response by delivering the right       content is designed in such a way that it is
intro panel is based on analysis of dealership       message at the right time. Emails and SMS          visually engaging and intuitive. Text messages
sales stats over a three-year period.                messages sent the morning after the original       include links to enable instant clicks through
Data capture                                         enquiry, with others sent a few days later, give   to more detailed information.
But it will only happen if the sales staff           prospects the opportunity to reply with their      We know that prospects today are generally
dealing with enquiries from potential                thoughts – without the perceived ‘hard sell’       much further down the line with their buying
customers are vigilant with their data               of a phone call from the salesperson.              decision by the time they visit a dealership,
capture. Good basic sales training will tell         They often reply with very detailed thoughts       so you have a shorter window within which
you that maintaining contact with the                and requirements, providing invaluable             to engage and convert them than ever
customer – especially through those few              further information for the sales team to          before. SmartMail and similar systems
early interactions – is critical if you’re to make   enable deals to be changed and cars sourced        can’t replace face-to-face contact and the
the sale. The team at Marketing Delivery             – and salespeople are coached to improve           personal relationships you can build up with
have developed an automated process for              conversion.                                        customers, but they do become very effective
customer contact that’s been refined over            Everyday technology                                tools to aid the process.
the years to deliver outstanding results for         SmartMail and other similar systems also use




  Seven steps to used-car profits
Adrian Lewis, used car director in the UK’s          widen your appeal to the marketplace, and          Stick with it, don’t change your used car
Marshall Motor Group outlined his seven              research current stock profile trends to make      advertising every week! Promote the same
‘Ps for used car profitability’ at an industry       sure you are staying in the right area.            campaign message clearly on your forecourt,
presentation, reported in a recent issue of                                                             to build credibility of your brand message
Auto Retail Manager magazine.                        n Purchasing                                       with the consumer. Ensure sales teams fully
                                                     Remember profit is made when you buy the           understand the campaign promotion, so that
The Seven P’s he listed were:                        car, not when you sell it. Inspect all purchases   they can also continue to build credibility.
Proposition                                          and appraise them accurately. Price your cars
Profile                                              with online customers in mind and check            n Presentation
Purchasing                                           your prices daily. You don’t have to be the        Walk the forecourt every day, and take your
Preparation                                          cheapest, but you do have to be competitive.       sales teams with you – get to know your stock
Promotion                                                                                               like you know your family. All cars should
Presentation                                         n Preparation                                      be ready to demo. If a car isn’t prepared to
Process                                              Do your preparation fast and do it well.           a standard that means you wouldn’t sell it
                                                     Prepare all cars within three days and to          to your family, it shouldn’t be on display.
n Proposition                                        exacting standards. Good quality preparation       Also insert sales sheets in every car – for
What is your current proposition in the used         will maximise the profit opportunity and build     customers who want to view more details
car marketplace? How does your current               your reputation.                                   about a car while they are in your dealership,
stock profile, pricing and promotion match                                                              without speaking to a salesperson.
that proposition? And do your used car sales         n Promotion
people understand it?                                Create a strong advertising campaign that          n Process
By identify the USPs of your business you can        represents your used car proposition and           You must have the processes in place to
play to your own strengths – not those of            reflects your value message.                       deal with all footfall enquiries. Have you
your competitors.                                    Promote your campaign across online and            got a process in place to deal with Internet
                                                     offline channels, continuously. Don’t use just     enquiries as well? Make sure your proposition
n Profile                                            one or the other - use both. In traditional        and the promotion are crystal clear to your
Identify where to buy the stock that fits your       media, advertise the cars that you know            sales teams.
proposition. Be single minded and only buy           customers want to buy at a price that is           Perhaps most importantly: Make sure your
cars that fit your proposition. Stock the cars       competitive, not cars that you need to sell at     sales teams know how to make profit from
that cover the range of your proposition, to         a price that isn’t!                                your used car strategy.


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 Affordability is key says NADA Chairman

                                                                                                       Derik Scorer:
                                                                                                       ‘… it will be
                                                                                                      a determining
                                                                                                     factor in buying
                                                                                                      decisions over
                                                                                                       the next few
                                                                                                         years…’
                                                                                                 growth trend with the record low prime
                                                                                                 lending rate; the longer financing periods;
                                                                                                 extended servicing intervals; and the
                                                                                                 widening application of service and/or
                                                                                                 maintenance plans as standard benefits,
                                                                                                 you can see this reduction in monthly
                                                                                                 ownership costs.’

                                                                                                 Bearing the brunt
The proliferation of brands, models and                                                          There has been a downside to this
derivatives available in the RSA market                                                          ‘affordability phenomenon’, says Derik – the
is concerning and unsustainable, Derik                                                           used car side of the business was bearing
Scorer told BenchMarker as he entered his                                                        the brunt:
second term as chairman of the National                                                          ‘Used vehicle retail sales have been put
Automobile Dealers’ Association (NADA) of                                                        under pressure both by the affordability
South Africa.                                                                                    factor and the intense competition in the
‘Ultimately there is the possibility of the                                                      new car market at the lower end, especially
sales throughput per outlet falling in a flat                                                    models priced below R150 000.’
market and this could threaten ongoing                                                           And next year, says Derik, the new car
dealer viability,’ says Derik.                                                                   pricing policies themselves would come
He also pointed to the high levels of                                                            under new pressures:
personal debt currently afflicting consumers                                                     ‘The inflationary effect of the RSA currency
in South Africa as a further cause for              NATIONAL AUTOMOBILE                          weakness will make new vehicle price
concern.                                            DEALERS’ ASSOCIATION
                                                                                                 increases unavoidable in the first quarter of
‘Affordability of vehicle purchases is going                                                     2013. This factor and other cost pressures
to become a determining factor in buying        subdued only by affordability concerns as        being felt by consumers will slow the growth
decisions over the next few years.’             new vehicle prices will tend to rise on a        of new vehicle sales in 2013 and it is my
                                                weaker rand currency.’                           expectation that the industry can look
Healthy model                                   Earlier Derik said that new vehicle sales by     forward to new vehicle sales being no more
However on the other side of the coin the       the end of 2012 would show growth of at          than five percent ahead of 2012 at best.’
way in which OEM importers and automotive       least 10% over 2011.
retailers remained positive and innovative                                                       More bullish
in their approach to the market and the         Real costs going down                            Some OEMs and vehicle importers were
diversity of client needs, supports a healthy   One of the characteristics of 2012 was           being more bullish in their forecasts for
model for the industry and consumers:           the fact that real monthly costs of vehicle      2013, says Derik. Most dealers would be
‘Forecasting in our market as far ahead as      ownership had been reducing.                     thankful for a stable economy supporting
a decade – especially amidst the present        ‘There has been further negative real growth     moderate growth:
economic and political uncertainties – is       in new car pricing this year as increases have   ‘Traditionally used vehicle sales take some
a risky science. However it’s my personal       remained at levels below the South African       benefit and are buoyed upwards by new
belief that South Africa will continue to       inflation rate.                                  vehicle price increases – and this could well
see moderate growth in new vehicle sales        ‘If you combine this negative real pricing       be the case in 2013.’



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   Vision holds the key to customer retention
My recent endeavors in the area of customer         themselves than in creating a successful
retention have served to highlight – more           future. People also want to see that the
than ever – the vital importance of VISION in       leader’s farsightedness is based on a deep
bringing a plan to fruition.                        sense of what’s necessary, right, and good
Whilst most dealers show a willingness to           for the business and the team rather than
admit to the importance of retaining their          what’s simply expeditious, popular, or self-                  Paddy O’Brien
customers, and whilst many also claim to            serving.’                                                  from Down Under
have a vision for this – the reality is that        It shouldn’t then surprise that when asked to
very few dealers have any idea of how they          explain their dealership’s vision for customer
will achieve this important objective; which        retention, 85 percent of the 200 front-liners
means at best the vision is vague. Whatever         surveyed, commented that beyond monthly
vision the dealer may claim to have anyway,         Gross and Unit targets, only CSI took on any
it gets down to the explanation given to            importance for the dealer principal…and CSI
key personnel of exactly what that vision           is not customer retention.
will achieve that seems to make the most            Now we all know that what is being
significant difference.                             measured is what gets done and so many
In a recent Forbes Magazine article on the          have inadequate Dealer Management
topic, business thinker and author, Erika           Systems that fail to provide a ‘single-view’ of
Andersen explains as follows:                       the customer, let alone an accurate account
n ‘People want leaders who look beyond              of customer defections by the second and
today. They want to have the sense that             third paid services. At the same time, so few
there is a master plan to carry them through        of you are acknowledging loyal customers or       from the lips of those that have counted
whatever short-term trials and tribulations         rewarding ‘repeat sales’ with that little extra   the cost of remaining with the status quo –
arise. They look to the leader to articulate,       for sales executives that ‘truly work their       those that have carefully decided precisely
in a compelling way, a clear and positive           data bases’. No wonder customers quietly          what they would like to measure and
future state toward which they can direct           slip between brands. The lost opportunity         improve.
their efforts. When leaders focus only on           costs if quantified would make most sit up        Only then it seems, does Erika Andersen’s
the current crisis or this quarter’s numbers,       and take notice.                                  compelling reason for change emerge with
it seems to us that they’re more interested         I know from the work we are presently doing       clarity and purpose, particularly when
in maintaining the status quo or protecting         in this area that VISION statements only flow     supported by a measurable turnaround plan.




  Stay in touch with your buyers
A UK survey of the 2012 used car market             Overall, the percentage of used car customers     be interested in ‘buying another car’.
show that many auto retailers are letting           contacted by dealerships to find out if           Used car buyers were quite clear what they
sales opportunities slip through their fingers      they were ‘satisfied with their car’ or were      want from franchised retailers selling the
because they are not keeping in touch with          interested in ‘having it serviced’ both fell to   same make of car – 40% of them expect a
buyers after the sale.                              their lowest point in the survey’s history.       ‘good deal on the car’, with others wanting
A report in the UK magazine, Auto Retail            ‘Satisfaction’ calls dropped 3% to 27% while      the ‘right car at the best possible price’ and a
Manager, says the survey (of 4 000 motorists)       ‘servicing’ was 4% lower at 31%.                  good trade in on their old car.
asked used car owners if the dealerships they                                                         In addition some car owners prefer a
bought their car from keeps in touch.               Customers know                                    franchised site because of their ‘friendly,
n This year’s results show that only 52% of         Franchised retailers selling their own            helpful and professional’ staff, or because
used car owners had heard from their retailer       makes had a much better record on                 they have bought from them before.
since buying their car – that’s four points         customer contact than their non-franchised        For the first time a new trend emerged –
lower than last year’s figure of 56%.               counterparts. Some 73% of them kept in            the most important factor when choosing
The survey also showed that customers               touch with buyers compared to only 40% of         a car was the ‘influence of family and
‘satisfaction’ rates had fallen – all in a period   independents, 57% versus 18% on servicing         friends’ overtaking the previous favourite of
when business is difficult to come by.              and 13% versus 4% to see if the owner might       ‘personal experience’.


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BenchMarker Issue 4 2012 -- China Edition

  • 1. Benchmarker Sharing best practice strategies CHINA Issue 4 / 2012 with global motor dealers A simply powerful conclusion emerges from the PROBE feature in this issue of Benchmarker PROBE BenchMarker: real business success in a retail automotive enterprise has to be underpinned by an infallible capacity to achieve exceptional customer satisfaction. Paddy O’Brien, who makes this particular observation, and Greg Strydom, offer this and other best practice insights which regularly emerge from the wide spread of performance group sessions held across Sewells Group markets in Asia Pacific and Africa, and some other countries alongside. Over 19 years, the Sewells performance group initiative has become a key element of heightening the business performance of motor retailers in whole countries. It’s nice to realise these improved returns stem from thousands of motorists who really like being so well looked after. BENCHMARKER IS GLOBAL A SPREAD OF ESSENTIAL READING Presently there are five different quarterly editions of BenchMarker focused on Contrast is part of the package sharing best practice strategies in the numerous markets where Sewells Group With media focus on the lingering EU ‘debt Look further and operates. There are digital editions of issue crunch’ and a looming ‘fiscal cliff’ in the elsewhere in the 4/2012 for email and Web distribution United States, one tends to feel most things world, at the to dealers and OEM executives in China, around us are threatening. In China there phenomenon of have been added complexities which have our industry’s India, Thailand, Indonesia and the slowed some markets, including the auto participation Philippines and a printed copy South industry. in social media African edition. Each of these different But these challenges (and the changes that where everything editions has a core of features and articles go with them) are continual in our business moves in mega- which are common to all, and some pages where nothing stays the same for very long. shifts. Now which are localised to suit the different Contrast is part of the package; just as it there are even is in other sectors of the economy. In our conferences areas of distribution. automotive retail though, one must constantly devoted to be impressed by the capacity of motor dealers nothing else – our Chee Tuck Yap, MD to come up with the responses, every time. social media guru, Sewells Group China. MUST READS If you want to find ways to help push aside Dimitri Kotov, Measure your performance: A specially any gloom, take a look at some of the attended a ‘digital dealer’ gathering in Las compiled table of key industry indicators positives reflected in this issue: Vegas and brings us excerpts. His list of Derik Scorer, who is chairman of the national ‘take-aways’ is on page 5. Add to that our in eight countries… ………………………………… 2 motor dealers’ association (NADA) in South articles out of the United Kingdom which Market holds in spite of boycott call………… 3 Africa, describes some of the unusual pricing highlight how more and more budget is being Special contributor Dimitri Kotov looks at and cost trends which have emerged there. apportioned to honing the Internet profile of For instance: in that market’s new vehicle the motor dealer down the road. ‘Five Mistakes to Avoid on Facebook’……… 4 sector in 2012 real monthly costs of vehicle Then, as prime proof of our capacity for Global motor dealers staged the 2012 ownership have been reducing. He explains finding solutions, spend some time on our Digital Dealer Conference in Las Vegas. on page 11, how frenetic competitiveness PROBE feature on pages eight and nine, Read some take-aways… ………………………… 5 in the market, lower lending rates, longer where close to 900 motor dealers across our repayment periods, and many other factors part of the globe each attend between two Get in with the locals, urges Roger have contributed to this anomaly. But, and four performance group sessions each Whalley from the UK… …………………………… 6 of course, it isn’t all good news: there is a year doing just that: diligently scrutinising Shoot and show for Audi customers………… 7 negative impact on the used car sector, and each group’s businesses to chase down the down-cost spiral in new cars there will not the changes and the challenges and find Sewells performance groups are targeted last - rising unit prices will become a major the appropriate best practice responses on improving business performances. challenge in 2013 and beyond. to them. Here’s how they do it… …………………………… 8 Global Managing Editor - Dennis Anderson (danderson@sewellsgroup.com) Seven steps to used car profits……………… 10 Edition Managing Editors: Australia – David Lowrie (dlowrie@sewellsgroup.com) Real motoring costs go down… …………… 11 … China – Chee Tuck Yap (cheetuck@sewellsgroup.com) There is the vital importance of VISION India – Jayesh Jagasia (jjagasia@sewellsgroup.com) Thailand – Supakorn Sookpunya (ssookpunya@sewellsgroup.com) in bringing a plan to fruition, says Paddy Indonesia – Roselle Pantastico (rpantastico@sewellsgroup.com) O’Brien… ……………………………………………… 12 South Africa – Tania Barlow (tbarlow@sewellsgroup.com) Edited by Robin Emslie (twolakes@iafrica.com) sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in 1
  • 2. B enchmarker Key industry indicators Key Industry Benchmarks This specially compiled table of key indicators you towards achieving this we have provided published here are guidelines to franchised a column to record your own performance motor dealers of performance in the listed numbers. You will then be able to create a countries. collective discussion with your management These have been assembled by the Sewells team around why your performance should Group operations in each of the countries be better than the given indicator, and delve and represent current ‘Best Practice’ norms in into the factors which might be restricting each of these countries. Each line item is an your business from achieving these levels of independent key indicator. performance. Sewells believes in measurement as a Finally when conclusions are reached, the critical business management practice – if key points of these discussions can then be you measure your performance and can converted into actions for the management Dennis Anderson compare it to an industry indicator you are team with clearly defined targets to be danderson@sewellsgroup.com in a position to evaluate and potentially achieved. improve that area of your business. To help SEWELLS GROUP KEY INDICATORS – JULY 2012 New South Your Australia China India Indonesia Phillipines Thailand Zealand Africa Figures Dealership Overall Total Dealership Gross Profit % of Sales 14.8% 14.3% 8.7% 10.5% 15.6% 12.5% 12.3% 7.5% Total Expenses % of TDGP 76.3% 81.3% 77.6% 71.0% 74.0% 72.8% 79.5% 62.0% PBT % of Sales 3.5% 2.8% 1.9% 3.0% 3.7% 3.18% 2.6% 3.9% Asset Activity 6.5 5.6 4.4 5.2 7.8 4.8 4.5 6.8 Return on Average Operational Assets 21.2% 15.2% 8.6% 14.0% 23.6% 11.5% 26.7% New Vehicle Department Total New Gross Profit % of Sales 8.5% 7.8% 4.8% 4.8% 8.5% 8.5% 4.5% 5.8% PBT % of Sales 0.8% 0.4% 0.1% 0.5% 0.8% 0.9% 0.9% 2.8% Total Expenses % of TNGP 87.5% 94.5% 99.1% 87.2% 89.4% 89.0% 82.3% 59.0% Inventory Days Supply 55 48 58 34 31 45 28 21 Used Vehicle Department Total Used Gross Profit % TUVS 10.5% 10.8% 7.6% 10.2% 8.7% PBT % of TUVS 0.9% 0.8% 0.8% 1.1% 0.8% Total Expenses % of TUGP 86.3% 86.5% 88.1% 71.5% 87.0% Inventory Days Supply 65 40 45 37 31 Parts Department Total Parts Gross Profit % of TPS 25% 26.5% 26.9% 17.3% 28.6% 21.0% 32.2% 21.5% PBT % of TPS 13.2% 11.3% 15.3% 9.2% 10.7% 9.8% 18.6% 13.8% Total Expenses % of TPGP 60.5% 76.8% 63.4% 49.4% 59.6% 47.0% 43.6% 36.0% Parts Inventory days 50 47 63 45 21 63 65 69 Service Department Total Labour Gross Profit % of TLS 77.5% 70.3% 79.5% 88.3% 84.1% 80.2% 82.3% 68.0% Total Service G.P. as a % of TSS 65% 58.0% 77.5% 83.9% 75.3% 72.3% 65.6% 53.8% PBT % of TSS 12.5% 12.4% 11.6% 30.7% 15.0% 21.3% 4.3% 3.1% Total Expenses % of TSGP 79.3% 79.3% 83.5% 60.9% 79.1% 68.4% 92.5% 94.0% Body Shop Department Total Labour Gross Profit % of TBS 77.4% 86.1% Total Bodyshop G.P. as a % of TBS 75.6% 82.5% PBT % of TBS 30.6% 44.4% Total Expenses % of TBGP 11.7% 26.3% sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 3. B enchmarker Market holds in spite of boycott call The Chinese car market held onto a slight overall increase in spite of a Japanese regions of the country, as well as in certain segments such as premium cars and ‘…sales growth will passenger car sales slump of close to 60 compact SUVs.’ percent at the start of the fourth quarter, A number of market analysts have pointed slow to between according to a statement from the China’s to the fact that pressure is being exerted Association of Automobile Manufacturers on the whole economy to adjust to China’s five and eight (CAAM). new growth patterns. One report says there There was a 5.4% increase in October and year-to-date sales against 2011 were 3.6% are now licence plate restrictions in cities like Shanghai and Beijing and limitations on percent over up while only 98 900 Japanese branded registrations in a total of four major cities. vehicle were sold – 59.4% down on last ‘It is important to note that while there next decade…’ year’s total. are more than 150 cities in China with The collapse of the Japanese brands populations over one million, there are also followed a bitter dispute after Tokyo enormous growth potential in the lower- percent over the next decade in line with the nationalised an East China Sea island chain tier regions with tier 4 and lower cities central government’s desire for slower and also claimed by Beijing, said the statement, accounting for 89 percent of the population.’ more sustainable economic growth which sparking huge protests across China and calls Annual car sales growth is now generally has been accompanied by the phasing out of for a boycott of Japanese products. expected to slow to between five and eight auto subsidies, and the licensing restrictions. Analysts say the row has affected Japanese automakers operating in the country and helped boost demand for other foreign brands. Japan’s top three carmakers - Toyota, Honda and Nissan - all produce in China and have announced the scaling back in production in the country following the sales slump sparked by the backlash. Toyota has now said it expects to sell 200 000 fewer vehicles in China in the second half of its fiscal year. Japan’s Honda said it was cutting its full year sales forecast in China to 620 000 from its original estimate of 750 000. ‘… industry reaches an inflexion point following a period of rapid growth…’ Another CAAM statement described the China industry as having reached an ‘inflexion point’ following a ‘stimulus-driven’ period of rapid growth in demand from 2009 until last year. ‘Since then, the industry has sharply decelerated, with total auto sales growth slipping to 2.5% in 2011. In the 10 months of 2012, passenger car sales rose 6.7% year-on- year to 12.6 million vehicles, while total auto sales rose 3.4% to 15.7 million vehicles. ‘Although overall market growth has decelerated, there is still sustainable and This picture emphasizes Sewells Group’ growing global footprint covering Australia/NZ, the Asia Pacific and healthy growth occurring in lower-tier Africa: it shows the Sewells branding on the building housing its offices in Shanghai, China. sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 4. B enchmarker * Dimitri Kotov* Better Use Of Social Media 5MISTAKES to avoid on Facebook Dealers certainly know what Facebook is; after all, in most regions including South Africa, Australia and India, Facebook is the second most visited site after Google. There are lots of things that dealers can publish on their Facebook Page, and there are no strict rules. Ultimately, one of my favourite ways to learn is from other people’s mistakes. So here I’ve compiled the five most common mistakes I see dealerships making when it comes to publishing on their Facebook page. Hopefully, you’ll learn from them: #1 characters (less than three lines of text) community events, such as local sporting dealers will see about 60% more likes, clubs you may sponsor. When posting to Mistake comments and shares compared to posts greater than 250 characters. Posts your page, your message will reach people who are familiar with your dealership, – Too Wordy including a photo album, a picture or a video generate 180%, 120% and 100% so insider content can make them feel in the know. When you do post cars for sale, more engagement than the average post, use the ‘Facebook Offers’ feature and Facebook users prefer to consume so include them as often as possible in provide your Facebook community with information from the friends and your posts as well. exclusive offers. businesses they’ve subscribed to on Facebook through succinct messages. By keeping posts between 100 and 200 Mistake #2 Mistake #4 Social media manager Dimitri – No Consistency – Lack of Value Kotov in Melbourne Members subscribed to your Facebook works closely with Consistency is the key to success on Facebook. Post at least five times a week, Page are two times more likely to purchase motor dealerships a car from your dealership than non- around Australia and and create a schedule and a regular rhythm for your postings and consider posting at subscribers, so reward them for their elsewhere showing loyalty by posting maintenance tips and them better uses of social media specific times when engagement is highest (evenings in most regions). answers to frequently asked questions. to increase their brand awareness, customer loyalty and sales. He is #5 now a regular columnist contributor #3 to all editions of Sewells Group’s BenchMarker publication. In this Mistake Mistake submission he gives the Five Mistakes to Avoid on Facebook, and news from – Irrelevant – No Interaction a recent digital dealer gathering in Las Vegas. Content Let your subscribers know how to engage with your content by including a ‘call to action’. Should they ‘like’ the post? Share Follow Sewells Group on social media: If you’re going to publish every car you with friends? Comment? You tell them. Facebook: www.facebook.com/sewellsgroup have in your showroom on your Facebook Additionally, a great way to encourage Twitter: www.twitter.com/sewellsgroup Page, you’re doing it wrong. Instead, more engagement is to ask open-ended Linkein: www.linkedin.com/company/ post content that shows you know questions and make use of Facebook’s sewells-group your audience by making reference to ‘Questions’ feature. sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 5. B enchmarker Takeaways from DD in Las Vegas In October Dimitri Kotov attended the action-packed Digital Dealer 2012 Conference in Las Vegas, United States, and submitted this list of takeaway highlights for BenchMarker readers: n he customer lifecycle has shifted, car buyers are now spending more time T researching online before making initial contact with dealership (11 hours spent researching and reading reviews on average). n ealerships are outsourcing to vendors who are using automated software to re- D target in-market buyers at various stages of the life cycle. n ealers are acutely aware of how online reputation affects sales and are D outsourcing to vendors to help with reputation management (positive review generation, monitoring and negative review notifications). n ebsites such as DealerRater, Yelp and Google Reviews are forcing better service W and offerings from dealers. n dvances in digital advertising now allow for more targeted forms of advertising A throughout the life cycle for higher ROI. n se of customer data is becoming more sophisticated, with dealers using U automated software to help with retention. sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 6. B enchmarker Get in with the locals Roger Whalley has more than 20 years experience of running dealerships in the UK. Writing in Auto Retail Manager magazine, he gives some sage advice on getting to know the business people in your area. Local business people are often overlooked the business, how many people they employ accountants, bankers or the Chamber of as serious prospects because they are not and, if it’s not immediately obvious, what Commerce could help. I held an event exactly retail and they’re not fleet customers exactly do they do. A simple walk around recently where we invited the local council either. But even in large cities there will be town is a good way to start. Create an Road Safety Officer to give a presentation. pockets of private business people and in up-to-date prospect list with details of the Another one for example, used the local the rural towns there are many folk on the business owner and decision maker, who police for a talk on security of premises and High Street who would welcome regular may be two different people. I have found protection against theft. contact from a friendly local dealership. a very useful source of small business user One clearly can’t expect to walk straight details is often the local church or village in and get an order. It can be a long job magazine. In fact I have always tried to make ‘… all your staff and sales execs can become demotivated sure my company has a substantial presence if they don’t get an instant ‘yes’. It helps if in these magazines. They are usually low should attend; you allocate a group of prospects to each cost and do influence local people. If your retail sales exec, and make sure they are the main (perhaps the only) point of contact ad appears alongside the butcher and baker then your initial contact with them will be it’s not just a car with the dealership. Allocate a specific day that much easier. for your sales execs to visit their prospects. They won’t all be useful to you, and you sales opportunity. Once a month might be too frequent for can discard the ones who don’t have local some potential customers in some areas. It ownership initially. They might be of use And don’t forget depends on how they react at your initial in the future, but for the first part of the meeting. The intuitive sales exec should be project you need the real locals. the “goodie bag”…’ able to pick up the vibes from the prospect Don’t though, just make initial contact with and schedule them in to a regular pattern your newfound prospects and then ask them of calls. to give you their business. You need to give All of these experts would, I am sure, give them something first, so that they then their time for free, so your only cost would Finding your prospects become interested in you. What tends to be refreshments. People are not expecting The first few visits should be purely interest business people is the opportunity a lavish spread at this time of day, and a qualification and getting to know them. to meet colleagues and competitors in a few sandwiches and snacks will do. All your What cars or vans do they run, how often do relaxed and friendly way, with no apparent staff should attend as it’s not just a car sales they change, what is their annual mileage, pressure on them to give something back. opportunity. what goods do they carry, what sort of Recently there has been a trend for thinking And don’t forget to send your guests away journeys, and so on. Once you have started that breakfast meetings are the answer. I’m with a goodie bag, not just a sales brochure. to build a rapport you begin to increase not sure they are. For many executives, the Maybe a car care kit and a discount voucher the selling activity. It could start with the mornings are an important time for getting for a service. It’s surprising what people will things done. appreciate, if they think it’s free. ‘… once you have Evening event Doesn’t end there started to build I have found that a casual evening event with low-key catering works well, and can If the event is a success, it needs to be continued at fairly regular intervals, maybe a rapport you build strong bridges. The best time is early evening, before they every three months so that it becomes something that people look forward to. have gone home and put their feet up. It’s And finally, following the first event, one of begin to increase very hard to get folk out after that. Midday your sales staff should contact each person is the hardest time, but I have had a lot of who attended to thank them for their time. the selling success with meetings starting at about Maybe this is when your staff could start 18.30 and ending no later than 20.00. actively selling, but don’t push the hard sell activity…’ With the offer of light refreshments and an too soon. interesting reason for the meeting, many of The approach to the sale has also got to be simple offer of a loan vehicle for a couple your prospects will attend. tailored. Most small business owners and of days, or a ‘special’ service offer – e.g. It won’t be the prospect of viewing your traders will have cash flow very high on priority bookings for service visits, special latest models that tempts them, however. their agenda right now and would probably discounted rates or arranging for collection Model launches rarely work. It needs welcome a sales proposal that takes the and delivery. to be more of a business seminar, from utilisation of their cash into account. Leases Start by building a dossier on local business which your guests can glean some help or and low start-up financial packages should prospects. Find out who owns or manages advice. Maybe one of your local lawyers, be the first consideration. sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 7. B enchmarker Shoot and show for Audi customers Audi technicians in the UK are now equipped video is incorporated into the customer’s with into the ‘shopping basket’, they can with ‘Audi Cams’ which enable them to take dedicated web page, and a secure link to authorise them to proceed with the work. a video of any potential problems to their that page is then emailed to the customer. Another innovation of the ‘Audi Cam’ is that customers, according to a report in the The page contains the relevant clips and it gives customers audio-visual access to magazine, Auto Retail Manager. grades each problem as ‘urgent’, ‘advisory’ their cars from the reception area as they They use the hand-held video cameras to or ‘for info’. It then gives a VAT-inclusive are being worked on by technicians who are film any problem they may identify during quote for each job, along with action buttons equipped with head-mounted cameras and a vehicle inspection. These could include to either authorise the centre to proceed, to audio links. things like brake pad wear or worn tyre tread reject the work, to request a call to discuss The Audi Cam is one of the outcomes of depth. The video can then be sent to the it. Once the customer has put all the jobs the Direct Reception technology which Audi customer’s computer or smartphone. The he or she wants the retailer to go ahead rolled out across its network last year. Rising social media marketing in US Just a year ago, a survey found that only a month in online marketing, not including Use someone who knows how to write, who 12% of US small and medium businesses advertising. Typically, this buys daily Facebook understands your existing customers and considered social media marketing a must, and Twitter interaction, and up to five where to find new ones. with half of respondents not using it at all. bespoke news stories, generated by at least The same survey a year later, has found one dealership visit in the month. If you want 3. It is solely digital social media accounting for at least 25% of more news than this, you need more budget. List every medium your business uses to marketing budgets at 77% of these same communicate with customers. Websites, companies. 2. Youngsters are the best at working email lists and social media pages are obvious Regular Auto Retail Manager columnist John these channels linkable strands, but what about the rest? Glynn writing in the latest issue points out Would you send a teenager or recent Online is the digital incarnation of your that with these huge changes taking place graduate to chair a critical business meeting physical dealership, so tie the two together. quickly, social media is what businesses say at manufacturer level? It’s the same as n ut a Facebook check-in logo by the door. P they need most help with. He goes on to handing social media to a youngster. I speak n ut ‘like’ thumbs in the windscreens of cars P dispel some social media myths: from experience when advising against for sale. ‘If you’re spending money on social media teenagers to max out social potential: it’s a n ut your Facebook and Twitter addresses P while uncertain of its value or purpose, here lot of pressure they are not equipped to deal on business cards, sales contracts, service are my top three myths: with. receipts, etc. Social media is business positioning to win Anything and everything that happens in your 1. Social media is free a bigger audience, so how will prospective dealership can inform your social media, but No chance. In my experience, many social customers respond to a string of mis-spelled listen to what your business is saying it before media customers invest a minimum of £400 X-Factor posts? it goes online. Action points Ask yourself some questions: Look at all your social media initiatives: Do they all tie together? If you yourself don’t have the expertise in-house, consider hiring someone who knows what that should look like and harmonise your digital channels. Do you (yes, you) know what social media is all about? Have you set some goals? It all boils down to being bothered about this new way of doing business. Buy some training and learn some simple tricks to stir up interest. To be really effective, you need ideas. You need to plan when they’ll appear and how you will share them. Finally: Social media is not rocket science. Set time aside. Set cash aside. Set some goals and have fun! sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 8. B enchmarker Benchmarker For more than 19 years – first in South Africa and now across a wide spread of PROBE countries from Australia and New Zealand through the Asia Pacific region to Africa and the Middle East – Sewells has facilitated its performance groups with targeted objectives primarily focused on improving the business performance of automotive retail dealers. It is a remarkably successful concept with participation now of the top management people from close to 900 motor dealer operations. For this issue, BenchMarker’s PROBE delves into some of the outcomes which emerge from the two to four annual performance group gatherings of those motor retail executives finding best practice solutions to the challenges on the path to success. Sewells Performance Groups How many; how they work One of the key areas of the ongoing stretch China 292 (234) dealers. Participants are encouraged to by Sewells Group towards continually South Africa 275 (255) openly exchange and articulate ideas which improving the business performance of Australia 207 (207) then assist in enhancing performance and motor dealers throughout the areas of India 57 (54) identifying as yet untapped sources of its operation, is it’s facilitation on a wide Thailand 23 (23) additional profit. scale of its world class performance group ASEAN 31 (36) Dealers emerge from the sessions and concept. Total 885 (809) return to their businesses with ready- Currently there are active performance made solutions and innovations which are groups in each of the six different countries Making this phenomenon real, is a group immediately applicable. where Sewells Group has hub operations, of 15 to 20 facilitators, each with practised One of Sewells Group’s often quoted as well as in the countries making up the and precise skills in driving the discussions core beliefs is that successful dealers are ASEAN grouping including the Middle East. and looking for maximum outputs for all those who consistently apply a proven A total of 885 dealerships participate in participators at each sitting. management model. The Sewells MRA™ between two and four performance group The overall objective always is to get the model is used as the key for this in the sessions each year. Growth of the concept group to identify the financial drivers, performance group sessions as a high level remains an indicative factor of its success: processes and practices which lead to financial and performance analysis discipline last year’s PG count of 809 dealerships grew superior business results. Always using the which is used to bring the applicable and by nine percent to this year’s 885. relevant Sewells-produced benchmarks, sometimes quite detailed factors to the table A pointer to the attraction of the leading best practices are identified; for discussion and then embark on the probe performance groups for dealers in the dealership processes are assessed and for corrections and broader solutions. dynamically growing newer markets is that analysed in an action-learning environment Sewells MRA™ promotes improved retail in China the PG dealership count moved in order to understand and relate to the high management through the ‘Mix’, the up 25 percent – from 234 to 292 - and now levels of workplace performance required ‘Retained’, and the ‘Activity’ and through heads the full 2012 list, which is (with 2011 for superior outcomes. these the facilitators and the group in brackets): The group sessions themselves are designed members are accurately able to define the to be engaging and interactive and mostly processes and competencies which might centre round the real problems, challenges require improvement, and offer support to and rewards being encountered by member address these gaps. sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 9. B enchmarker ‘Superb customer service = a robust platform for exceptional business performance’ – Paddy O’Brien The sturdiest and most robust platform for single- and multiple-franchise structures, options for FI and used cars.’ exceptional retail motor dealer performance and different kinds of business empires Greg enjoys each group’s excitement when is its capacity to consistently deliver superb involved. In some countries motor retail is a solution is first glimpsed, and then moves customer service at all levels of the business, just one part of a substantial business group through to a successful outcome: says Paddy O’Brien, chairman of the globally with a spread of interest across a number ‘Our MRA™ model has the discipline of operating Sewells Group. of other consumer and industrial sectors. getting everyone (in the group) onto the ‘There is no doubt that delivering exemplary In other countries you have major groups same page and drives a lot of the discussion service to your customers should always which operate large numbers of dealerships and then everyone starts to see a business be a prime business objective for those across a full spectrum of automotive starting to move in the right direction. There wanting to succeed in motor retail brands, all in the motor industry. The is an important PG dynamic which is to see anywhere in the world. Those thoroughly quality of discussion and focus on the basics new people and new business join a group satisfied customers are ecstatic and – more doesn’t change much however: there’s and then watch them start to mature and importantly – they become the disciples of a commitment to business performance grow into their roles.’ the business going forward.’ improvement throughout.’ Another aspect is how the Group activities This was one of a number of insights to Both spent time talking about the rewards of highlight and bring focus to the key emerge from our discussions with Paddy participation in the concept: challenges in the business. O’Brien and Greg Strydom for this special Paddy: ‘When you sit in and witness a Greg: ‘There are cyclical tensions at the BenchMarker PROBE feature looking at muscular and fit dealership growing still interface between dealers and their the way in which Sewells successfully further to the point where it is firing manufacturers; the differing expectations facilitates its Performance Group initiative dynamically and in perfect balance on all from franchise to franchise; and the throughout its operational areas (Asia cylinders – that’s when there is real payback concerns about stocking levels whatever the Pacific and Africa region), and even in some for the healthy and vigorous intellect different sizes of the businesses may be. instances beyond them. and effort which has contributed to that ‘Also, the route to success is not necessarily (See drop in panel below) outcome. a simple, straight line. In the different Both men referred to the distinctive and ‘Also in a developing market where the groups we come across different levels of interesting market-related variations inside dealers are perhaps skinnier and have less investment, different size and number of the group sessions taking place in the muscle the reward comes when you see facilities, different volumes… but the issues different countries. them disciplining themselves not to usually get well identified and resolved as Paddy talks about the scale of varying succumb to the pressure of making each more and more best practice examples get evolutions taking place in meetings where and every sale and sometimes denying brought to the table. When everyone joins the dealers come from markets which themselves (or being blinded) to the the same learning curve, the excitement and are more developed and those where other opportunities of gaining absorption satisfaction is palpable.’ retail automotive is on an earlier part of a maturation curve: Paddy: ‘In the more developed countries it’s Paddy O’Brien, chairman of Sewells Group, and Greg Strydom, Sewells always a case of eking out every extra bit of wisdom from the best practice experiences Group Head of Client Solutions, gave their inputs for this feature in being brought to the table and sharing these the midst of busy schedules. out among the rest of the group as you Paddy was speaking from Abu Dhabi airport whilst in transit to stretch for better balance in the businesses. Australia after facilitating performance and development groups in ‘In the developing countries it’s really a South Africa late in November. Greg Strydom was back in Melbourne, continual learning experience for all as each dealer starts to realise more and more about having returned from a business visit to Japan as well as participating what can be achieved in a better balanced in a facilitators’ workshop in Johannesburg. Paddy was scheduled to modern motor dealership business. There’s return to South Africa (via New Delhi and Beirut) where he was to an atmosphere of a cheer about to break out host a party of 10 leading India dealers on a four-day study tour in as each one puts a foot on the next step of mid-December. the discovery curve.’ Across the spectrum, he says, the Since he introduced the Sewells format Performance Group concept performance group atmosphere – the in South Africa 19 years ago, Paddy has facilitated groups in at least 12 experience of each meeting – has its rewards different countries – Australia, New Zealand, Philippines, China, India, for all participators, including the facilitators. Vietnam, Malaysia, Singapore, Saudi Arabia, Lebanon, Jordan and Greg emphasised the importance of good South Africa. financial reporting as an essential input for the groups and the variances of the methods Greg has held his Performance Group oversight position for the past of reporting from country to country. five years after moving to Australia from South Africa 11 years ago. ‘You also work around the differences of sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 10. B enchmarker There are real paybacks from follow-ups A prospect is seven times more likely to buy from a dealership if they have been followed up within 72 hours of their first visit says Jeremy Evans, the MD of Marketing Delivery, a UK based dealer marketing specialist, writing in Auto Retail Manager. One way of achieving this all-important dealerships. the technology that your customers are using follow-up is by pre-programmed emails, Communications generated by SmartMail are every day. Email messages are compatible which are distributed via highly effective timely, relevant and carefully constructed to with smartphones and tablet devices, and the eCRM systems such as SmartMail. And our encourage a response by delivering the right content is designed in such a way that it is intro panel is based on analysis of dealership message at the right time. Emails and SMS visually engaging and intuitive. Text messages sales stats over a three-year period. messages sent the morning after the original include links to enable instant clicks through Data capture enquiry, with others sent a few days later, give to more detailed information. But it will only happen if the sales staff prospects the opportunity to reply with their We know that prospects today are generally dealing with enquiries from potential thoughts – without the perceived ‘hard sell’ much further down the line with their buying customers are vigilant with their data of a phone call from the salesperson. decision by the time they visit a dealership, capture. Good basic sales training will tell They often reply with very detailed thoughts so you have a shorter window within which you that maintaining contact with the and requirements, providing invaluable to engage and convert them than ever customer – especially through those few further information for the sales team to before. SmartMail and similar systems early interactions – is critical if you’re to make enable deals to be changed and cars sourced can’t replace face-to-face contact and the the sale. The team at Marketing Delivery – and salespeople are coached to improve personal relationships you can build up with have developed an automated process for conversion. customers, but they do become very effective customer contact that’s been refined over Everyday technology tools to aid the process. the years to deliver outstanding results for SmartMail and other similar systems also use Seven steps to used-car profits Adrian Lewis, used car director in the UK’s widen your appeal to the marketplace, and Stick with it, don’t change your used car Marshall Motor Group outlined his seven research current stock profile trends to make advertising every week! Promote the same ‘Ps for used car profitability’ at an industry sure you are staying in the right area. campaign message clearly on your forecourt, presentation, reported in a recent issue of to build credibility of your brand message Auto Retail Manager magazine. n Purchasing with the consumer. Ensure sales teams fully Remember profit is made when you buy the understand the campaign promotion, so that The Seven P’s he listed were: car, not when you sell it. Inspect all purchases they can also continue to build credibility. Proposition and appraise them accurately. Price your cars Profile with online customers in mind and check n Presentation Purchasing your prices daily. You don’t have to be the Walk the forecourt every day, and take your Preparation cheapest, but you do have to be competitive. sales teams with you – get to know your stock Promotion like you know your family. All cars should Presentation n Preparation be ready to demo. If a car isn’t prepared to Process Do your preparation fast and do it well. a standard that means you wouldn’t sell it Prepare all cars within three days and to to your family, it shouldn’t be on display. n Proposition exacting standards. Good quality preparation Also insert sales sheets in every car – for What is your current proposition in the used will maximise the profit opportunity and build customers who want to view more details car marketplace? How does your current your reputation. about a car while they are in your dealership, stock profile, pricing and promotion match without speaking to a salesperson. that proposition? And do your used car sales n Promotion people understand it? Create a strong advertising campaign that n Process By identify the USPs of your business you can represents your used car proposition and You must have the processes in place to play to your own strengths – not those of reflects your value message. deal with all footfall enquiries. Have you your competitors. Promote your campaign across online and got a process in place to deal with Internet offline channels, continuously. Don’t use just enquiries as well? Make sure your proposition n Profile one or the other - use both. In traditional and the promotion are crystal clear to your Identify where to buy the stock that fits your media, advertise the cars that you know sales teams. proposition. Be single minded and only buy customers want to buy at a price that is Perhaps most importantly: Make sure your cars that fit your proposition. Stock the cars competitive, not cars that you need to sell at sales teams know how to make profit from that cover the range of your proposition, to a price that isn’t! your used car strategy. sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 11. B enchmarker Affordability is key says NADA Chairman Derik Scorer: ‘… it will be a determining factor in buying decisions over the next few years…’ growth trend with the record low prime lending rate; the longer financing periods; extended servicing intervals; and the widening application of service and/or maintenance plans as standard benefits, you can see this reduction in monthly ownership costs.’ Bearing the brunt The proliferation of brands, models and There has been a downside to this derivatives available in the RSA market ‘affordability phenomenon’, says Derik – the is concerning and unsustainable, Derik used car side of the business was bearing Scorer told BenchMarker as he entered his the brunt: second term as chairman of the National ‘Used vehicle retail sales have been put Automobile Dealers’ Association (NADA) of under pressure both by the affordability South Africa. factor and the intense competition in the ‘Ultimately there is the possibility of the new car market at the lower end, especially sales throughput per outlet falling in a flat models priced below R150 000.’ market and this could threaten ongoing And next year, says Derik, the new car dealer viability,’ says Derik. pricing policies themselves would come He also pointed to the high levels of under new pressures: personal debt currently afflicting consumers ‘The inflationary effect of the RSA currency in South Africa as a further cause for NATIONAL AUTOMOBILE weakness will make new vehicle price concern. DEALERS’ ASSOCIATION increases unavoidable in the first quarter of ‘Affordability of vehicle purchases is going 2013. This factor and other cost pressures to become a determining factor in buying subdued only by affordability concerns as being felt by consumers will slow the growth decisions over the next few years.’ new vehicle prices will tend to rise on a of new vehicle sales in 2013 and it is my weaker rand currency.’ expectation that the industry can look Healthy model Earlier Derik said that new vehicle sales by forward to new vehicle sales being no more However on the other side of the coin the the end of 2012 would show growth of at than five percent ahead of 2012 at best.’ way in which OEM importers and automotive least 10% over 2011. retailers remained positive and innovative More bullish in their approach to the market and the Real costs going down Some OEMs and vehicle importers were diversity of client needs, supports a healthy One of the characteristics of 2012 was being more bullish in their forecasts for model for the industry and consumers: the fact that real monthly costs of vehicle 2013, says Derik. Most dealers would be ‘Forecasting in our market as far ahead as ownership had been reducing. thankful for a stable economy supporting a decade – especially amidst the present ‘There has been further negative real growth moderate growth: economic and political uncertainties – is in new car pricing this year as increases have ‘Traditionally used vehicle sales take some a risky science. However it’s my personal remained at levels below the South African benefit and are buoyed upwards by new belief that South Africa will continue to inflation rate. vehicle price increases – and this could well see moderate growth in new vehicle sales ‘If you combine this negative real pricing be the case in 2013.’ sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  • 12. B enchmarker Vision holds the key to customer retention My recent endeavors in the area of customer themselves than in creating a successful retention have served to highlight – more future. People also want to see that the than ever – the vital importance of VISION in leader’s farsightedness is based on a deep bringing a plan to fruition. sense of what’s necessary, right, and good Whilst most dealers show a willingness to for the business and the team rather than admit to the importance of retaining their what’s simply expeditious, popular, or self- Paddy O’Brien customers, and whilst many also claim to serving.’ from Down Under have a vision for this – the reality is that It shouldn’t then surprise that when asked to very few dealers have any idea of how they explain their dealership’s vision for customer will achieve this important objective; which retention, 85 percent of the 200 front-liners means at best the vision is vague. Whatever surveyed, commented that beyond monthly vision the dealer may claim to have anyway, Gross and Unit targets, only CSI took on any it gets down to the explanation given to importance for the dealer principal…and CSI key personnel of exactly what that vision is not customer retention. will achieve that seems to make the most Now we all know that what is being significant difference. measured is what gets done and so many In a recent Forbes Magazine article on the have inadequate Dealer Management topic, business thinker and author, Erika Systems that fail to provide a ‘single-view’ of Andersen explains as follows: the customer, let alone an accurate account n ‘People want leaders who look beyond of customer defections by the second and today. They want to have the sense that third paid services. At the same time, so few there is a master plan to carry them through of you are acknowledging loyal customers or from the lips of those that have counted whatever short-term trials and tribulations rewarding ‘repeat sales’ with that little extra the cost of remaining with the status quo – arise. They look to the leader to articulate, for sales executives that ‘truly work their those that have carefully decided precisely in a compelling way, a clear and positive data bases’. No wonder customers quietly what they would like to measure and future state toward which they can direct slip between brands. The lost opportunity improve. their efforts. When leaders focus only on costs if quantified would make most sit up Only then it seems, does Erika Andersen’s the current crisis or this quarter’s numbers, and take notice. compelling reason for change emerge with it seems to us that they’re more interested I know from the work we are presently doing clarity and purpose, particularly when in maintaining the status quo or protecting in this area that VISION statements only flow supported by a measurable turnaround plan. Stay in touch with your buyers A UK survey of the 2012 used car market Overall, the percentage of used car customers be interested in ‘buying another car’. show that many auto retailers are letting contacted by dealerships to find out if Used car buyers were quite clear what they sales opportunities slip through their fingers they were ‘satisfied with their car’ or were want from franchised retailers selling the because they are not keeping in touch with interested in ‘having it serviced’ both fell to same make of car – 40% of them expect a buyers after the sale. their lowest point in the survey’s history. ‘good deal on the car’, with others wanting A report in the UK magazine, Auto Retail ‘Satisfaction’ calls dropped 3% to 27% while the ‘right car at the best possible price’ and a Manager, says the survey (of 4 000 motorists) ‘servicing’ was 4% lower at 31%. good trade in on their old car. asked used car owners if the dealerships they In addition some car owners prefer a bought their car from keeps in touch. Customers know franchised site because of their ‘friendly, n This year’s results show that only 52% of Franchised retailers selling their own helpful and professional’ staff, or because used car owners had heard from their retailer makes had a much better record on they have bought from them before. since buying their car – that’s four points customer contact than their non-franchised For the first time a new trend emerged – lower than last year’s figure of 56%. counterparts. Some 73% of them kept in the most important factor when choosing The survey also showed that customers touch with buyers compared to only 40% of a car was the ‘influence of family and ‘satisfaction’ rates had fallen – all in a period independents, 57% versus 18% on servicing friends’ overtaking the previous favourite of when business is difficult to come by. and 13% versus 4% to see if the owner might ‘personal experience’. www.twitter.com/sewellsgroup in www.linkedin.com/company/sewells-group www.sewellsgroup.com www.facebook.com/sewellsgroup sewellsgroup.com AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in