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.

1. Benchmarker
Sharing best practice strategies South Africa 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
sharing best practice strategies in the
numerous markets where Sewells Group
Blast away any morbidity operates. Apart from this printed South
African edition, there are equivalent digital
editions of issue 4/2012 for email and Web
With media focus on the lingering EU ‘debt industry’s
distribution to dealers and OEM executives
crunch’ and a looming ‘fiscal cliff’ in the participation
United States, one tends to feel most things in social media in India, China, Thailand, Indonesia and
around us are threatening. where everything the Philippines. Each of these different
But these challenges (and the changes that moves in mega- editions has a core of features and articles
go with them) are continual in our business shifts. Now which are common to all, and some pages
where nothing stays the same for very there are even which are localised to suit the different
long. Contrast is part of the package; just conferences areas of distribution.
as it is in other sectors of the economy. In devoted to
our automotive retail though, one must nothing else –
constantly be impressed by the capacity of our social media
MUST READS
motor dealers to come up with the responses, guru, Dimitri Compare South Africa motor dealers’ key
every time. Kotov, attended industry benchmarks with those in seven other
So, don’t let things get you down; there a ‘digital dealer’ Tania Barlow, MD Sewells countries ………………………………………………………… 2
is much happening which can help blast gathering in Las Group South Africa Affordability is key says Derik Scorer, NADA
away morbidity! Take a look at some of the Vegas and brings us national chairman in South Africa…………………… 3
positives reflected in this issue: excerpts. His list of ‘take-aways’ is on page Special contributor Dimitri Kotov looks at ‘Five
Derik Scorer, chairman of NADA in South 5. Add to that our articles out of the United Mistakes to Avoid on Facebook’……………………… 4
Africa, concludes that in our new vehicle Kingdom which highlight how more and more Global motor dealers staged the 2012 Digital
sector in 2012 real monthly costs of vehicle budget is being apportioned to honing the Dealer Conference in Las Vegas. Read some
take-aways……………………………………………………… 5
ownership have been reducing. He explains Internet profile of the motor dealer down the
Get in with the locals, urges Roger Whalley
in his market review/preview on page three, road.
from the UK…………………………………………………… 6
how frenetic competitiveness in the market, Then, as prime proof of our capacity for
Shoot and show for Audi customers………………… 7
lower lending rates, longer repayment finding solutions, spend some time on our
Sewells performance groups are targeted on
periods, and many other factors have PROBE feature where close to 900 motor improving business performances. Here’s how
contributed to this anomaly. But, of course, it dealers across our part of the globe each they do it………………………………………………………… 8
isn’t all good news: there is a negative impact attend between two and four performance Seven steps to used car profits………………………… 10
on the used car sector, and the down-cost group sessions each year doing just Ronnie Watson, popular former head of
spiral in new cars will not last - rising unit that: diligently scrutinising each group’s WesBank passed away in November. Some
prices will become a major challenge in 2013 businesses to chase down the changes and tributes…………………………………………………………… 11
and beyond. the challenges and find the appropriate best There is the vital importance of VISION in bring-
Look further, at the phenomenon of our practice responses to them. ing a plan to fruition, says Paddy O’Brien………… 12
NATIONAL AUTOMOBILE
DEALERS’ ASSOCIATION
1

2. B enchmarker
BENCHMARKS
3rd Quarter
2011
4th Quarter
2011
1st Quarter
2012
2nd Quarter
2012
Your
Figures
Key industry
Dealership Overall
Total Dealership GP % of Sales 15.63% 15.53% 15.66% 15.57% benchmarks
Total Expenses % of TDGP 75.90% 74.68% 74.32% 73.95%
PBT % of Sales 3.27% 3.48% 3.53% 3.67% Most franchised
Asset Activity 7.2 times 7.5 times 6.8 times 7.8 times dealers in South
Return on Operational Assets 18.91% 21.11% 19.54% 23.56% Africa participate
Total Cost Recovery in the Sewells’
New 37.16% 39.03% 39.19% 38.41% benchmarking
Used 20.00% 20.36% 19.89% 20.21% process producing
Service 27.41% 28.56% 27.23% 28.18%
these key industry
Parts 24.81% 25.71% 25.11% 26.18%
figures. Dealership
F&I 24.16% 23.30% 24.67% 25.81%
financials and a large John Templeton
New Vehicle Department
range of key statistics jtempleton@sewellsgroup.com
Total New Gross Profit % of Sales 8.40% 8.79% 8.67% 8.46%
are uploaded using
PBT % of Sales 0.71% 1.03% 0.90% 0.80%
the Sewells Online System (eSOS) and
Total Expenses % of TNGP 90.22% 86.43% 87.40% 89.39%
Inventory Days Supply 30.6 dealers can immediately view their own
32.9 28.2 32.4
individual results. The eSOS operations
Used Vehicle Department
team runs benchmarks on the 21st day of
Total Used Gross Profit % TUVS 8.80% 8.67% 8.58% 8.66%
PBT % of TUVS 0.80%
each month when 90% of dealers’ data has
0.41% 0.50% 0.54%
Total Expenses % of TUGP 90.66% 90.65% 90.84% 86.95% been captured.
Inventory Days Supply 29.6 30.5 33.8 30.9 Industry benchmarks are determined by
F & I Department sequencing the values generated for the
F & I Gross PNVR R 7,427
given key performance indicators (KPI)
R 6,883 R 6,612 R 7,059
F & I Gross PUVR R 6,543 R 6,691 R 7,236 R 7,293 and then picking the result at the 70th
Parts Department percentile for revenue items and 30th
Total Parts Gross Profit % of TPS 28.57% 29.10% 28.77% 28.64% for expense items. For total dealer gross
PBT % of TPS 10.09% 11.08% 10.88% 10.66% profit, for example, if there are 600 dealers,
Total Expenses % of TPGP 62.38% 59.35% 60.02% 59.55% then dealer number 420 is the benchmark
Parts Inventory days 21.9 20.8 21.1 21.1 dealer. Expense benchmarks are set at the
Service Department 180th dealer.
Total Labour Gross Profit % of TLS 83.74% 84.04% 84.66% 84.09%
Total Service GP as a % of TSS 75.29% 75.76% 75.38% 75.27% Further information can be obtained from
PBT % of TSS 12.59% 16.34% 15.52% 14.97% John Templeton on +27 +83 276-2990.
Total Expenses % of TSGP 81.98% 78.49% 77.51% 79.11%
Global ‘key indicators’
As a unique service to readers of
SEWELLS GROUP KEY INDICATORS – DECEMBER 2012
BenchMarker South Africa, we produce this
extract from a global table (alongside) to
give you the opportunity of making some
comparisons against the South African key New Your
Australia China India Indonesia Phillipines Thailand
Zealand Figures
industry benchmarks for ‘dealership overall’
printed above. Dealership Overall
The figures here reflect some of the latest Total Dealership Gross
key indicators to franchised dealers of Profit % of Sales 14.7% 14.3% 8.7% 10.5% 12.5% 12.3% 7.5%
business performance in the listed countries.
Total Expenses % of TDGP 76.2% 83.3% 77.6% 71.0% 72.8% 79.5% 62.0%
These are assembled each quarter by the
PBT % of Sales 3.4% 2.8% 1.9% 3.0% 3.1% 2.6% 3.9%
Sewells Group operations in each of those
countries and represent current ‘best Asset Activity 6.8 5.6 4.4 5.2 4.8 4.5 6.8
practice’ norms in those markets. Each line Return on Average
item is an independent key indicator. Operational Assets 21.2% 15.2% 8.6% 14.0% 15.2% 11.5% 26.7%
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3. 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.’
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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.
#4
By keeping posts between 100 and 200
Mistake #2 Mistake
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 Mistake
to all editions of Sewells Group’s
BenchMarker publication. In this
Mistake
– No Interaction
submission he gives the Five Mistakes to
Avoid on Facebook, and news from
a recent digital dealer gathering in – Irrelevant
Content
Las Vegas. 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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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.
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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.
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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!
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8. B enchmarker
Benchmarker
PROBE
For more than 19 years – first in South Africa and now across a wide spread of
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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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
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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.
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11. B enchmarker
Ronnie Watson
Ronnie Watson, popular former head of WesBank, passed away at the end of November aged 65. He joined
the bank in 1966, became senior general manager in 1993, was appointed CEO in 1998 and retired from that
position in 2007. He leaves his wife, Grace, and four sons.
Tributes…
From a note by Paddy O’Brien, chairman
of Sewells Group, to Grace Watson on the
passing of Ronnie Watson, former CEO of
WesBank:
‘I hope that you may take comfort from your
own sense of devastation in knowing there is
a community of others too that feel a sense
of grief from the tragic loss of this amazing
character.
‘With his unique charm, his worldliness
and his deep sense of caring, Ronnie left
footprints wherever he went and the impact
that he had on those that he touched
throughout his career, including myself, will
be retained through eternity. He certainly
influenced my life in the most profound
way and our Sewells vision to globalise our
company was supported and encouraged by
his courage and forward thinking. Ronald’s
creativity, his positive outlook and his
boundless enthusiasm provided him with a
magnetism that few could resist.
‘I gained so much from his energy,
particularly in the client encounters that we
experienced together. Uniquely, he turned
challenges into exciting and pleasurable ‘Still in the earlier days when our National more respected. Thanks to him WesBank’s
opportunities, simply destroyed WesBank’s Automobile Dealers Association (NADA) commitment to their philosophy of being
opponents with his passion and acumen. I wanted a sponsor for its Convention, I the ‘dealer bank’ became even more
consider it a privilege to have known and was dispatched to see Ronnie Watson in entrenched. He fostered strong relationships
worked with him in my career. his office in Braamfontien, and put the with dealers all over South Africa – during
‘The thoughts of all of us are with you right proposition to him! With astute judgement the tough times he sustained some of them
now – even from way ‘Down Under’. May his Ronnie never hesitated in taking up the offer and ensured their survival.
memory give you strength…’ and making WesBank the anchor-sponsor ‘Ronnie was an excellent marketer and
for NADA Conventions then and for a spearheaded the development and
From Errol Richardson, a former national number of years afterwards. And it certainly successful implementation of many of
chairman of NADA SA: wasn’t just the money. Ronnie utilised the WesBank’s market leading strategies and
opportunity to embrace the South African innovations. He was a master when it came
‘From the beginning Ronnie displayed
dealer fraternity which led to me coining the to relationship marketing. As a charming
the patience and dignity of a fine banker
phrase at that first Convention of: ’WesBank and considerate host, he was in a class of
and his passion for the motor industry
the dealer friendly bank‘ and the shortened his own. Ronnie invested an enormous
and his industry relationships were quite
slogan ‘WesBank the Dealer Bank’ stays true amount of his personal time in the
exceptional. His management style was
to this day. He will be sorely missed in a cultivation of quality personal relationships
always engaging and his ability to listen and
noisy world.’ – in the process he established a network
provide sound advice was unique. Ronnie
remained ‘an officer and a gentleman’ who of associates, friends and fans all over the
From Brand Pretorius, former head of world.
had started at the bottom and finished at
McCarthy Motor Holdings: ‘Ronnie wasn’t only a top business leader,
the top – as CEO of WesBank.
‘The name Ronnie Watson and WesBank ‘During his career spanning more than 40 he was also a great South African – patriotic,
had become synonymous; he made long years Ronnie played a key role in establishing committed and caring. In short, he was a
term friends in cities and small rural towns WesBank as the dominant force in its man of significance – one who made a big
across the country, indeed wherever cars sector. Through his efforts the WesBank difference because of his wisdom, character
were sold. brand became even better known and even and contribution.’
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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’.
Managing Editor – Dennis Anderson (danderson@sewellsgroup.com); Editor – Robin Emslie (twolakes@iafrica.com);
sewells group
Printing – Goldfields Press (edb@goldfieldspress.co.za). Published by Robin Emslie on behalf of Sewells Group South Africa 1st Floor
Block A, La Rocca Office Park, 321 Main Road (Off Petunia) Bryanston. Telephone +27 (0)11 463-2444. ADDITIONAL COPIES – Extra
copies of BenchMarker for distribution to key staff can be pre-ordered from akruger@sewellsgroup.com at R35.00 per issue.
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