BenchmarkerSharing best practice strategies                                                               CHINA           ...
B enchmarkerKey industry indicators                                      Key Industry BenchmarksThis specially compiled ta...
B enchmarker  Market holds in spite of boycott callThe Chinese car market held onto a slightoverall increase in spite of a...
B enchmarker  *      Dimitri Kotov* Better Use Of Social Media5MISTAKES                                             to avo...
B enchmarker                 Takeaways from DD in Las Vegas                  In October Dimitri Kotov attended the action-...
B enchmarker  Get in with the localsRoger Whalley has more than 20 years experience of running dealerships in the UK. Writ...
B enchmarker  Shoot and show for Audi customersAudi technicians in the UK are now equipped     video is incorporated into ...
B enchmarkerBenchmarker                                                For more than 19 years – first in South Africa and ...
B enchmarker  ‘Superb customer service = a robust platform for  exceptional business performance’                         ...
B enchmarker  There are real paybacks from follow-upsA prospect is seven times more likely to buy from a dealership if the...
B enchmarker Affordability is key says NADA Chairman                                                                      ...
B enchmarker   Vision holds the key to customer retentionMy recent endeavors in the area of customer         themselves th...
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BenchMarker Issue 4 2012 -- China Edition


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BENCHMARKER IS GLOBAL: Presently there are five different quarterly editions of BenchMarker focused on sharing best practice strategies in the numerous markets where Sewells Group operates. There are digital editions of issue 4/2012 for email and Web distribution to dealers and OEM executives in China, India, Thailand, Indonesia and the Philippines and a printed copy South African edition. Each of these different editions has a core of features and articles which are common to all, and some pages which are localised to suit the different areas of distribution.

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BenchMarker Issue 4 2012 -- China Edition

  1. 1. BenchmarkerSharing best practice strategies CHINA Issue 4 / 2012with global motor dealers A simply powerful conclusion emerges from the PROBE feature in this issue ofBenchmarkerPROBE 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 onContrast is part of the package sharing best practice strategies in the numerous markets where Sewells GroupWith media focus on the lingering EU ‘debt Look further and operates. There are digital editions of issuecrunch’ and a looming ‘fiscal cliff’ in the elsewhere in the 4/2012 for email and Web distributionUnited 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 ofhave been added complexities which have our industry’s India, Thailand, Indonesia and theslowed some markets, including the auto participation Philippines and a printed copy Southindustry. in social media African edition. Each of these differentBut these challenges (and the changes that where everything editions has a core of features and articlesgo with them) are continual in our business moves in mega- which are common to all, and some pageswhere nothing stays the same for very long. shifts. Now which are localised to suit the differentContrast is part of the package; just as it there are evenis in other sectors of the economy. In our conferences areas of distribution.automotive retail though, one must constantly devoted tobe impressed by the capacity of motor dealers nothing else – our Chee Tuck Yap, MDto come up with the responses, every time. social media guru, Sewells Group China. MUST READSIf you want to find ways to help push aside Dimitri Kotov, Measure your performance: A speciallyany gloom, take a look at some of the attended a ‘digital dealer’ gathering in Las compiled table of key industry indicatorspositives reflected in this issue: Vegas and brings us excerpts. His list ofDerik Scorer, who is chairman of the national ‘take-aways’ is on page 5. Add to that our in eight countries… ………………………………… 2motor dealers’ association (NADA) in South articles out of the United Kingdom which Market holds in spite of boycott call………… 3Africa, describes some of the unusual pricing highlight how more and more budget is being Special contributor Dimitri Kotov looks atand cost trends which have emerged there. apportioned to honing the Internet profile ofFor instance: in that market’s new vehicle the motor dealer down the road. ‘Five Mistakes to Avoid on Facebook’……… 4sector in 2012 real monthly costs of vehicle Then, as prime proof of our capacity for Global motor dealers staged the 2012ownership 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… ………………………… 5in the market, lower lending rates, longer where close to 900 motor dealers across ourrepayment periods, and many other factors part of the globe each attend between two Get in with the locals, urges Rogerhave contributed to this anomaly. But, and four performance group sessions each Whalley from the UK… …………………………… 6of course, it isn’t all good news: there is a year doing just that: diligently scrutinising Shoot and show for Audi customers………… 7negative impact on the used car sector, and each group’s businesses to chase downthe down-cost spiral in new cars there will not the changes and the challenges and find Sewells performance groups are targetedlast - 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 ( Seven steps to used car profits……………… 10 Edition Managing Editors: Australia – David Lowrie ( Real motoring costs go down… …………… 11 … China – Chee Tuck Yap ( There is the vital importance of VISION India – Jayesh Jagasia ( Thailand – Supakorn Sookpunya ( in bringing a plan to fruition, says Paddy Indonesia – Roselle Pantastico ( O’Brien… ……………………………………………… 12 South Africa – Tania Barlow ( Edited by Robin Emslie ( AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in 1
  2. 2. B enchmarkerKey industry indicators Key Industry BenchmarksThis specially compiled table of key indicators you towards achieving this we have providedpublished here are guidelines to franchised a column to record your own performancemotor dealers of performance in the listed numbers. You will then be able to create acountries. collective discussion with your managementThese have been assembled by the Sewells team around why your performance shouldGroup operations in each of the countries be better than the given indicator, and delveand represent current ‘Best Practice’ norms in into the factors which might be restrictingeach of these countries. Each line item is an your business from achieving these levels ofindependent key indicator. performance.Sewells believes in measurement as a Finally when conclusions are reached, thecritical business management practice – if key points of these discussions can then beyou measure your performance and can converted into actions for the management Dennis Andersoncompare it to an industry indicator you are team with clearly defined targets to be danderson@sewellsgroup.comin 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% AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  3. 3. B enchmarker Market holds in spite of boycott callThe Chinese car market held onto a slightoverall increase in spite of a Japanese regions of the country, as well as in certain segments such as premium cars and ‘…sales growth willpassenger 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 betweenaccording to a statement from the China’s to the fact that pressure is being exertedAssociation of Automobile Manufacturers on the whole economy to adjust to China’s five and eight(CAAM). new growth patterns. One report says thereThere was a 5.4% increase in October andyear-to-date sales against 2011 were 3.6% are now licence plate restrictions in cities like Shanghai and Beijing and limitations on percent overup 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 withThe collapse of the Japanese brands populations over one million, there are alsofollowed a bitter dispute after Tokyo enormous growth potential in the lower- percent over the next decade in line with thenationalised an East China Sea island chain tier regions with tier 4 and lower cities central government’s desire for slower andalso claimed by Beijing, said the statement, accounting for 89 percent of the population.’ more sustainable economic growth whichsparking huge protests across China and calls Annual car sales growth is now generally has been accompanied by the phasing out offor 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 Japaneseautomakers operating in the country andhelped boost demand for other foreignbrands. Japan’s top three carmakers -Toyota, Honda and Nissan - all produce inChina and have announced the scaling backin production in the country following thesales slump sparked by the backlash.Toyota has now said it expects to sell 200000 fewer vehicles in China in the secondhalf of its fiscal year. Japan’s Honda saidit was cutting its full year sales forecast inChina to 620 000 from its original estimateof 750 000. ‘… industry reaches an inflexion point following a period of rapid growth…’Another CAAM statement describedthe China industry as having reached an‘inflexion point’ following a ‘stimulus-driven’period of rapid growth in demand from 2009until last year.‘Since then, the industry has sharplydecelerated, with total auto sales growthslipping to 2.5% in 2011. In the 10 months of2012, passenger car sales rose 6.7% year-on-year to 12.6 million vehicles, while total autosales rose 3.4% to 15.7 million vehicles.‘Although overall market growth hasdecelerated, there is still sustainable and This picture emphasizes Sewells Group’ growing global footprint covering Australia/NZ, the Asia Pacific andhealthy growth occurring in lower-tier Africa: it shows the Sewells branding on the building housing its offices in Shanghai, AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  4. 4. B enchmarker * Dimitri Kotov* Better Use Of Social Media5MISTAKES to avoid on FacebookDealers certainly know what Facebook is; after all, in most regions including South Africa, Australia andIndia, Facebook is the second most visited site after Google. There are lots of things that dealers canpublish on their Facebook Page, and there are no strict rules. Ultimately, one of my favourite ways tolearn is from other people’s mistakes.So here I’ve compiled the five most common mistakes I see dealerships making when it comes topublishing 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 toMistake 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 andFacebook users prefer to consume so include them as often as possible in provide your Facebook community withinformation from the friends and your posts as well. exclusive offers.businesses they’ve subscribed to onFacebook 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? ShareFollow Sewells Group on social media: If you’re going to publish every car you with friends? Comment? You tell them.Facebook: have in your showroom on your Facebook Additionally, a great way to encourageTwitter: Page, you’re doing it wrong. Instead, more engagement is to ask open-endedLinkein: post content that shows you know questions and make use of Facebook’ssewells-group your audience by making reference to ‘Questions’ AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  5. 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 AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  6. 6. B enchmarker Get in with the localsRoger Whalley has more than 20 years experience of running dealerships in the UK. Writing in Auto RetailManager 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 ofas serious prospects because they are not and, if it’s not immediately obvious, what Commerce could help. I held an eventexactly retail and they’re not fleet customers exactly do they do. A simple walk around recently where we invited the local councileither. 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 localthe rural towns there are many folk on the business owner and decision maker, who police for a talk on security of premises andHigh Street who would welcome regular may be two different people. I have found protection against from a friendly local dealership. a very useful source of small business userOne clearly can’t expect to walk straight details is often the local church or villagein and get an order. It can be a long job magazine. In fact I have always tried to make ‘… all your staffand sales execs can become demotivated sure my company has a substantial presenceif 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 yourretail sales exec, and make sure they are themain (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 carwith 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 localsome potential customers in some areas. It ownership initially. They might be of use And don’t forgetdepends on how they react at your initial in the future, but for the first part of themeeting. 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 withand schedule them in to a regular pattern your newfound prospects and then ask themof 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 wouldFinding your prospects become interested in you. What tends to be refreshments. People are not expectingThe first few visits should be purely interest business people is the opportunity a lavish spread at this time of day, and aqualification and getting to know them. to meet colleagues and competitors in a few sandwiches and snacks will do. All yourWhat 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 salesthey 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 awayjourneys, and so on. Once you have started that breakfast meetings are the answer. I’m with a goodie bag, not just a sales build a rapport you begin to increase not sure they are. For many executives, the Maybe a car care kit and a discount voucherthe 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 besimple offer of a loan vehicle for a couple your prospects will attend. tailored. Most small business owners andof days, or a ‘special’ service offer – e.g. It won’t be the prospect of viewing your traders will have cash flow very high onpriority bookings for service visits, special latest models that tempts them, however. their agenda right now and would probablydiscounted rates or arranging for collection Model launches rarely work. It needs welcome a sales proposal that takes theand delivery. to be more of a business seminar, from utilisation of their cash into account. LeasesStart by building a dossier on local business which your guests can glean some help or and low start-up financial packages shouldprospects. Find out who owns or manages advice. Maybe one of your local lawyers, be the first AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  7. 7. B enchmarker Shoot and show for Audi customersAudi technicians in the UK are now equipped video is incorporated into the customer’s with into the ‘shopping basket’, they canwith ‘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 thatcustomers, according to a report in the The page contains the relevant clips and it gives customers audio-visual access tomagazine, Auto Retail Manager. grades each problem as ‘urgent’, ‘advisory’ their cars from the reception area as theyThey use the hand-held video cameras to or ‘for info’. It then gives a VAT-inclusive are being worked on by technicians who arefilm any problem they may identify during quote for each job, along with action buttons equipped with head-mounted cameras anda 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 ofdepth. The video can then be sent to the it. Once the customer has put all the jobs the Direct Reception technology which Audicustomer’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 USJust a year ago, a survey found that only a month in online marketing, not including Use someone who knows how to write, who12% of US small and medium businesses advertising. Typically, this buys daily Facebook understands your existing customers andconsidered 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 leastThe same survey a year later, has found one dealership visit in the month. If you want 3. It is solely digitalsocial media accounting for at least 25% of more news than this, you need more budget. List every medium your business uses tomarketing 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 obviousRegular 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 yourthat 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. Pthey 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 Pdispel 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 Pwhile uncertain of its value or purpose, here lot of pressure they are not equipped to deal on business cards, sales contracts, serviceare my top three myths: with. receipts, etc. Social media is business positioning to win Anything and everything that happens in your1. Social media is free a bigger audience, so how will prospective dealership can inform your social media, butNo chance. In my experience, many social customers respond to a string of mis-spelled listen to what your business is saying it beforemedia 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! AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  8. 8. B enchmarkerBenchmarker For more than 19 years – first in South Africa and now across a wide spread ofPROBE 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 workOne of the key areas of the ongoing stretch China 292 (234) dealers. Participants are encouraged toby Sewells Group towards continually South Africa 275 (255) openly exchange and articulate ideas whichimproving the business performance of Australia 207 (207) then assist in enhancing performance andmotor dealers throughout the areas of India 57 (54) identifying as yet untapped sources ofits 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 andconcept. Total 885 (809) return to their businesses with ready-Currently there are active performance made solutions and innovations which aregroups 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 quotedas well as in the countries making up the and precise skills in driving the discussions core beliefs is that successful dealers areASEAN grouping including the Middle East. and looking for maximum outputs for all those who consistently apply a provenA 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 thesessions each year. Growth of the concept group to identify the financial drivers, performance group sessions as a high levelremains an indicative factor of its success: processes and practices which lead to financial and performance analysis disciplinelast year’s PG count of 809 dealerships grew superior business results. Always using the which is used to bring the applicable andby nine percent to this year’s 885. relevant Sewells-produced benchmarks, sometimes quite detailed factors to the tableA pointer to the attraction of the leading best practices are identified; for discussion and then embark on the probeperformance 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 retailin China the PG dealership count moved in order to understand and relate to the high management through the ‘Mix’, theup 25 percent – from 234 to 292 - and now levels of workplace performance required ‘Retained’, and the ‘Activity’ and throughheads the full 2012 list, which is (with 2011 for superior outcomes. these the facilitators and the groupin 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 AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  9. 9. B enchmarker ‘Superb customer service = a robust platform for exceptional business performance’ – Paddy O’BrienThe 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 whenis its capacity to consistently deliver superb involved. In some countries motor retail is a solution is first glimpsed, and then movescustomer 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 ofoperating 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 discussionservice to your customers should always which operate large numbers of dealerships and then everyone starts to see a businessbe a prime business objective for those across a full spectrum of automotive starting to move in the right direction. Therewanting to succeed in motor retail brands, all in the motor industry. The is an important PG dynamic which is to seeanywhere in the world. Those thoroughly quality of discussion and focus on the basics new people and new business join a groupsatisfied customers are ecstatic and – more doesn’t change much however: there’s and then watch them start to mature andimportantly – 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 activitiesThis was one of a number of insights to Both spent time talking about the rewards of highlight and bring focus to the keyemerge 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 theBenchMarker PROBE feature looking at muscular and fit dealership growing still interface between dealers and theirthe way in which Sewells successfully further to the point where it is firing manufacturers; the differing expectationsfacilitates its Performance Group initiative dynamically and in perfect balance on all from franchise to franchise; and thethroughout its operational areas (Asia cylinders – that’s when there is real payback concerns about stocking levels whatever thePacific 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 differentBoth men referred to the distinctive and ‘Also in a developing market where the groups we come across different levels ofinteresting market-related variations inside dealers are perhaps skinnier and have less investment, different size and number ofthe group sessions taking place in the muscle the reward comes when you see facilities, different volumes… but the issuesdifferent countries. them disciplining themselves not to usually get well identified and resolved asPaddy talks about the scale of varying succumb to the pressure of making each more and more best practice examples getevolutions taking place in meetings where and every sale and sometimes denying brought to the table. When everyone joinsthe dealers come from markets which themselves (or being blinded) to the the same learning curve, the excitement andare more developed and those where other opportunities of gaining absorption satisfaction is palpable.’retail automotive is on an earlier part of amaturation curve:Paddy: ‘In the more developed countries it’s Paddy O’Brien, chairman of Sewells Group, and Greg Strydom, Sewellsalways a case of eking out every extra bit ofwisdom from the best practice experiences Group Head of Client Solutions, gave their inputs for this feature inbeing 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 tostretch 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 eachdealer starts to realise more and more about having returned from a business visit to Japan as well as participatingwhat can be achieved in a better balanced in a facilitators’ workshop in Johannesburg. Paddy was scheduled tomodern motor dealership business. There’s return to South Africa (via New Delhi and Beirut) where he was toan atmosphere of a cheer about to break out host a party of 10 leading India dealers on a four-day study tour inas 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 conceptperformance group atmosphere – the in South Africa 19 years ago, Paddy has facilitated groups in at least 12experience 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 andGreg emphasised the importance of good South reporting as an essential input forthe groups and the variances of the methods Greg has held his Performance Group oversight position for the pastof reporting from country to country. five years after moving to Australia from South Africa 11 years ago.‘You also work around the differences AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  10. 10. B enchmarker There are real paybacks from follow-upsA prospect is seven times more likely to buy from a dealership if they have been followed up within 72 hours oftheir first visit says Jeremy Evans, the MD of Marketing Delivery, a UK based dealer marketing specialist, writingin Auto Retail Manager.One way of achieving this all-important dealerships. the technology that your customers are usingfollow-up is by pre-programmed emails, Communications generated by SmartMail are every day. Email messages are compatiblewhich are distributed via highly effective timely, relevant and carefully constructed to with smartphones and tablet devices, and theeCRM systems such as SmartMail. And our encourage a response by delivering the right content is designed in such a way that it isintro panel is based on analysis of dealership message at the right time. Emails and SMS visually engaging and intuitive. Text messagessales stats over a three-year period. messages sent the morning after the original include links to enable instant clicks throughData 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 generallydealing with enquiries from potential thoughts – without the perceived ‘hard sell’ much further down the line with their buyingcustomers 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 whichyou that maintaining contact with the and requirements, providing invaluable to engage and convert them than evercustomer – especially through those few further information for the sales team to before. SmartMail and similar systemsearly interactions – is critical if you’re to make enable deals to be changed and cars sourced can’t replace face-to-face contact and thethe sale. The team at Marketing Delivery – and salespeople are coached to improve personal relationships you can build up withhave developed an automated process for conversion. customers, but they do become very effectivecustomer 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 profitsAdrian Lewis, used car director in the UK’s widen your appeal to the marketplace, and Stick with it, don’t change your used carMarshall 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 messageAuto 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 thatThe 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 carsProfile with online customers in mind and check n PresentationPurchasing your prices daily. You don’t have to be the Walk the forecourt every day, and take yourPreparation cheapest, but you do have to be competitive. sales teams with you – get to know your stockPromotion like you know your family. All cars shouldPresentation n Preparation be ready to demo. If a car isn’t prepared toProcess 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 – forWhat is your current proposition in the used will maximise the profit opportunity and build customers who want to view more detailscar 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 Promotionpeople understand it? Create a strong advertising campaign that n ProcessBy identify the USPs of your business you can represents your used car proposition and You must have the processes in place toplay to your own strengths – not those of reflects your value message. deal with all footfall enquiries. Have youyour 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 propositionn Profile one or the other - use both. In traditional and the promotion are crystal clear to yourIdentify 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 yourcars that fit your proposition. Stock the cars competitive, not cars that you need to sell at sales teams know how to make profit fromthat cover the range of your proposition, to a price that isn’t! your used car AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  11. 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 bruntThe proliferation of brands, models and There has been a downside to thisderivatives available in the RSA market ‘affordability phenomenon’, says Derik – theis concerning and unsustainable, Derik used car side of the business was bearingScorer told BenchMarker as he entered his the brunt:second term as chairman of the National ‘Used vehicle retail sales have been putAutomobile Dealers’ Association (NADA) of under pressure both by the affordabilitySouth Africa. factor and the intense competition in the‘Ultimately there is the possibility of the new car market at the lower end, especiallysales 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 cardealer viability,’ says Derik. pricing policies themselves would comeHe also pointed to the high levels of under new pressures:personal debt currently afflicting consumers ‘The inflationary effect of the RSA currencyin South Africa as a further cause for NATIONAL AUTOMOBILE weakness will make new vehicle priceconcern. DEALERS’ ASSOCIATION increases unavoidable in the first quarter of‘Affordability of vehicle purchases is going 2013. This factor and other cost pressuresto become a determining factor in buying subdued only by affordability concerns as being felt by consumers will slow the growthdecisions 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 lookHealthy model Earlier Derik said that new vehicle sales by forward to new vehicle sales being no moreHowever 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 bullishin their approach to the market and the Real costs going down Some OEMs and vehicle importers werediversity of client needs, supports a healthy One of the characteristics of 2012 was being more bullish in their forecasts formodel 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 supportinga 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 somea risky science. However it’s my personal remained at levels below the South African benefit and are buoyed upwards by newbelief that South Africa will continue to inflation rate. vehicle price increases – and this could wellsee moderate growth in new vehicle sales ‘If you combine this negative real pricing be the case in 2013.’ AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in
  12. 12. B enchmarker Vision holds the key to customer retentionMy recent endeavors in the area of customer themselves than in creating a successfulretention have served to highlight – more future. People also want to see that thethan ever – the vital importance of VISION in leader’s farsightedness is based on a deepbringing a plan to fruition. sense of what’s necessary, right, and goodWhilst most dealers show a willingness to for the business and the team rather thanadmit to the importance of retaining their what’s simply expeditious, popular, or self- Paddy O’Briencustomers, and whilst many also claim to serving.’ from Down Underhave a vision for this – the reality is that It shouldn’t then surprise that when asked tovery few dealers have any idea of how they explain their dealership’s vision for customerwill achieve this important objective; which retention, 85 percent of the 200 front-linersmeans at best the vision is vague. Whatever surveyed, commented that beyond monthlyvision the dealer may claim to have anyway, Gross and Unit targets, only CSI took on anyit gets down to the explanation given to importance for the dealer principal…and CSIkey 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 beingsignificant difference. measured is what gets done and so manyIn a recent Forbes Magazine article on the have inadequate Dealer Managementtopic, business thinker and author, Erika Systems that fail to provide a ‘single-view’ ofAndersen explains as follows: the customer, let alone an accurate accountn ‘People want leaders who look beyond of customer defections by the second andtoday. They want to have the sense that third paid services. At the same time, so fewthere is a master plan to carry them through of you are acknowledging loyal customers or from the lips of those that have countedwhatever 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 preciselyin a compelling way, a clear and positive data bases’. No wonder customers quietly what they would like to measure andfuture 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’sthe current crisis or this quarter’s numbers, and take notice. compelling reason for change emerge withit seems to us that they’re more interested I know from the work we are presently doing clarity and purpose, particularly whenin 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 buyersA 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 theysales opportunities slip through their fingers they were ‘satisfied with their car’ or were want from franchised retailers selling thebecause they are not keeping in touch with interested in ‘having it serviced’ both fell to same make of car – 40% of them expect abuyers after the sale. their lowest point in the survey’s history. ‘good deal on the car’, with others wantingA report in the UK magazine, Auto Retail ‘Satisfaction’ calls dropped 3% to 27% while the ‘right car at the best possible price’ and aManager, 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 abought 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 becauseused 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 choosingThe 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 ofwhen business is difficult to come by. and 13% versus 4% to see if the owner might ‘personal experience’. in AUSTRALIA - NEW ZEALAND - SOUTH AFRICA - INDONESIA - THAILAND - CHINA - INDIA in