Monday, 1 November 2010
NEWSFLASH 01/11/2010
My blog postings have been picked up on a regular basis by www.cardealermagazine.co.uk under the heading 'Trader Tales' so please help yourself to have a read. Thanks :-)
Saturday, 17 July 2010
Sell Cars? No, not me!
This is an article I wrote which appears on the Car Dealer magazine website (www.cardealermagazine.co.uk).
WHENEVER I am introduced to someone for the first time, I avoid where possible the subject of my occupation…
It is not because I am embarrassed or ashamed of a job I love, it is because more often than not I get told a horror story about a bad car retailing experience that person has suffered.
‘I went into xxx showroom on a Saturday afternoon in a pair of jeans and tee shirt, the salesman looked me up and down and decided I could not afford it so I walked out in disgust,’ or similar is a sentiment most of you would have heard in your careers.
‘I would have bought the car but they would only give me half of what my part exchange is really worth,’ is another well worn gripe.
In all cases I feel duty bound to defend my car selling brothers and sisters with sweeping statements like ‘if you didn’t make an appointment on a Saturday they were probably busy’ or ‘I am sure they would have done the deal if they could’.
However, at the weekend, my best friend asked me to buy a used car on his behalf. He has a specific need for a large German estate and likes to buy with the confidence of a manufacturer backed used car warranty. I located two examples on the manufacturer website and thus moved from gamekeeper to game.
The first choice car had been sold, the salesman took my number in the event that the buyer shed his skin so it was on to number two.
The dealer who owned the second car claim to be a ‘vibrant company with a fresh approach’. I called and asked to be connected to a used car salesman. ‘One moment,’ came the curt reply and that was to be it. The phone rang and rang to the point I had to hang up. I called an hour later with the same outcome.
Undeterred I left an enquiry for the specific car on the manufacturer website. I know what some of these ‘hot’ leads are like. You get everything from brochure collectors, 10 year olds doing their homework and in one extreme case that I experienced, an inmate of the local prison planning which car to buy on his release two years hence.
With this in mind I left a mobile number and a little message – ‘please can comeone contact me urgently about this car’.
Three days have passed and I am still without a call. I feel like Cheryl Cole might if she registered on a dating website with an artistic library photo and the phrase ‘liberal attitude to non committal sex’ only for her to get no interest.
I urge you all to think about your most basic of processes. Can a receptionist take details? What happens if you have a temporary receptionist? Who handles the portal for your web enquiries? How are they distributed? These are hardly challenges to test the boffins of Nasa.
Oh, and for the record, I called on a Saturday and I was wearing jeans…..
WHENEVER I am introduced to someone for the first time, I avoid where possible the subject of my occupation…
It is not because I am embarrassed or ashamed of a job I love, it is because more often than not I get told a horror story about a bad car retailing experience that person has suffered.
‘I went into xxx showroom on a Saturday afternoon in a pair of jeans and tee shirt, the salesman looked me up and down and decided I could not afford it so I walked out in disgust,’ or similar is a sentiment most of you would have heard in your careers.
‘I would have bought the car but they would only give me half of what my part exchange is really worth,’ is another well worn gripe.
In all cases I feel duty bound to defend my car selling brothers and sisters with sweeping statements like ‘if you didn’t make an appointment on a Saturday they were probably busy’ or ‘I am sure they would have done the deal if they could’.
However, at the weekend, my best friend asked me to buy a used car on his behalf. He has a specific need for a large German estate and likes to buy with the confidence of a manufacturer backed used car warranty. I located two examples on the manufacturer website and thus moved from gamekeeper to game.
The first choice car had been sold, the salesman took my number in the event that the buyer shed his skin so it was on to number two.
The dealer who owned the second car claim to be a ‘vibrant company with a fresh approach’. I called and asked to be connected to a used car salesman. ‘One moment,’ came the curt reply and that was to be it. The phone rang and rang to the point I had to hang up. I called an hour later with the same outcome.
Undeterred I left an enquiry for the specific car on the manufacturer website. I know what some of these ‘hot’ leads are like. You get everything from brochure collectors, 10 year olds doing their homework and in one extreme case that I experienced, an inmate of the local prison planning which car to buy on his release two years hence.
With this in mind I left a mobile number and a little message – ‘please can comeone contact me urgently about this car’.
Three days have passed and I am still without a call. I feel like Cheryl Cole might if she registered on a dating website with an artistic library photo and the phrase ‘liberal attitude to non committal sex’ only for her to get no interest.
I urge you all to think about your most basic of processes. Can a receptionist take details? What happens if you have a temporary receptionist? Who handles the portal for your web enquiries? How are they distributed? These are hardly challenges to test the boffins of Nasa.
Oh, and for the record, I called on a Saturday and I was wearing jeans…..
Friday, 12 March 2010
Scrappage - Papering over the cracks - Part II
Jerry Maguire has to be one of my favourite films of all time. The context is sport which I love, I am not afraid to admit to a man-crush on Tom Cruise and I have huge empathy for the business and human themes which are central to the plot.
'Less is more' should have been the mantra for the motor trade for the last twenty years but sadly corporate big wigs getting fat on the bonus culture have meant a chronic issue of over production.
Unfortunately for the people of motoring towns like Birmingham, Antwerp, Trollhatten and Luton (not to mention Detroit) this issue is now being addressed in a more violent way than anyone could have predicted with job culls in the thousands.
The glutenous nature of the business then manifests itself in retailers. Targets, stretch targets and ad-hoc incentives mean that the primary concern for any dealer is volume. Forget profit retention, forget customer service and quality of business, it is all about the numbers.
Please do not think this is purely a car sales issue. Parts and hours are as important as the very things that start it all off.
As a result the need for space is huge. Bigger showrooms and used car display areas, bigger car parks, more parts storage and administration space and a number of workshop and valeting bays. This leviathon cannot be in any old location, it needs to be in a retail viable space and most importantly, the site needs to be corporate. Manufacturers (most of the time) dictate the architect, builders, design and even the type of chairs you sit on.
To pay for this you need some serious money. The most extreme case is West London Audi which is owned by the Sytner group, no change from £45 million pounds. The majority of retailers are debt funded so are precariously placed when times are hard (as in 2008).
So with scrappage about to end, the question being floated about the trade is 'what are you doing post scrappage?' as though the trade will cease to exist. For some weak dealers this maybe the case.
Like the macro-economic issue of over production, I believe there are many core micro-economic issues that overshadow many franchised dealers ability to perform profitably.
I will deal with these issues on an individual basis in later blog postings.
Friday, 12 February 2010
Autotrader - Where it's going wrong
I make no secret of my current disliking for the Trader Media Group. Here is the body of the e-mail I recently sent to their sales director:
Who are Autotrader to me?
I should add that I am referring to the digital side of the business, not the magazine.
From what you said to me earlier, I believe some of your colleagues may have lost sight of the pure essence of the company. Essentially you are the means in which I broadcast the cars I have to sell to the public at large. You own nothing more than a domain, some servers and what appears to be a patented search system.
This facility is available to me from a number of your competitors, eBay, motors, carmony, vcars, pistonheads to name but a few.
Where you have an advantage is your branding, your heritage and your technical superiority. This was important to me when I chose your company as a partner for me in 2007 when I started my business.
Where has it gone wrong?
The catalyst for much of my unhappiness comes from a lack of an Autotrader representative for a period of some eighteen months. There is no excuse for this, during this time I spent over £10k and had no relationship with which to speak of.
I cannot recall exactly but I would imagine there has been at least three rate rises within this period. Each time, a colleague of yours in your call centre would explain the new technology which was being launched to mitigate for each increase.
It is important to consider the car market at the time of these increases. We have seen dramatic falls in the number of new car sales which naturally have a knock on effect to the market as a whole. This is without considering the worsening wider economic climate.
Product Weaknesses
When I was asked to comment on the new artwork and beta concept a few months ago, I reported back saying something like 'looks like a five year old has done it'.
When it was launched, the functionality of the site was appalling. How a company like Autotrader can launch a site with so many technical flaws is incomprehensible.
The most concerning part for me was the reaction of the most important people in the whole process, the users. If you have not seen this then I would urge you to look at it:
http://tinyurl.com/y8wrf24
Then there is the new 'technology'.
Launching products like enhanced advert sizes, pay per click and promoted listings is hardly driving the market. I accept BETA is a great product in concept but as referred to earlier, that was not ready at launch.
I do not want to see advertisements for breast enlargement alongside my cars. As lovely as my friend's wife is to look at, I do not want to see any form of advertising next to mine. You are a classified car site, that is what I want to see, that is what customers want to see.
I notice from your latest dealer panel, you expect us to be amazed by telling us we can have a 'fully branded' display if a customer clicks into our car. That is exactly what we should have in the first place.
Cost
I have just used some of my saving in my package reduction by signing up to a 15 car agreement with motors.co.uk. The cost of this is £81.25 + VAT. Autotrader is approximately £500. I cannot confirm exactly as I am waiting for a new invoice.
I can list a car on eBay with nine pictures for 28 days for £12.99 including VAT. Some £150 for fifteen cars, if I sign up for an eBay motors package it would be less.
Can you honestly say you believe Autotrader is worth that much more?
One of my biggest issues is the lack of product flexibility. I cannot use itemised pay per clicks, I cannot chose not to have video, I have to sign up to a specific number of cars. If I had the ability to be more precise with my spend, I might spend more.
Motor dealers are notorious for spending money at advertising as a knee jerk reaction, this used to be done through an advert in the paper but dealers are not using this any more for obvious reasons. Here is a glaring business opportunity for Autotrader to take yet it fails to do so.
Lack of Proactivity
I had a phone call from Vodafone when my contract was close to the end saying that they had reviewed my deal and they had a new one which would save me a lot of money. I now spend a third of what I did but I am still with them. I could have spent a third with O2 or Orange but they kept me on board.
I have been overspending for six months or so, I am sure you have the technology to write reports which isolate dealers in my position but where is the outbound call?
I had been a subscriber to Autotrade Mail since we started in 2007 and was very happy with the product. I received a letter a month ago telling me the cost of the service was increasing by 25%. I asked Laura (sales manager) why, 'because we have not had a price rise for ten years' she replied, 'yes, but what about all the extra subscribers you have now, shrinking margins etc etc'......silence. Exactly the sort of blatant profiteering that we are seeing with Autotrader.
I finally met my local representative some two weeks ago. When I told her that I had heard you had a retention team that was cutting deals to existing customers, she told me she could do nothing about it and had to liase with someone else.
What is her function? As lovely as it is to see a nice girl with a pretty smile asking me what business is like, I am afraid I am too busy to indulge in meaningless chit chat. She said to me 'there is a brick wall up and I can't get over it' during her visit, 'that is because you don't have any ladders' I replied.
The irony of it all
What makes me laugh the most is the new CRM hat that everyone at Autotrader is wearing. You are telling me that I will get monthly visits and reviews and that essentially you want to cuddle me.
The current pricing and product actions do little to reassure me your long term goals include building customer relationships.
You now want to put prices up from March the 1st.
This is not a good start for the new regime......
Who are Autotrader to me?
I should add that I am referring to the digital side of the business, not the magazine.
From what you said to me earlier, I believe some of your colleagues may have lost sight of the pure essence of the company. Essentially you are the means in which I broadcast the cars I have to sell to the public at large. You own nothing more than a domain, some servers and what appears to be a patented search system.
This facility is available to me from a number of your competitors, eBay, motors, carmony, vcars, pistonheads to name but a few.
Where you have an advantage is your branding, your heritage and your technical superiority. This was important to me when I chose your company as a partner for me in 2007 when I started my business.
Where has it gone wrong?
The catalyst for much of my unhappiness comes from a lack of an Autotrader representative for a period of some eighteen months. There is no excuse for this, during this time I spent over £10k and had no relationship with which to speak of.
I cannot recall exactly but I would imagine there has been at least three rate rises within this period. Each time, a colleague of yours in your call centre would explain the new technology which was being launched to mitigate for each increase.
It is important to consider the car market at the time of these increases. We have seen dramatic falls in the number of new car sales which naturally have a knock on effect to the market as a whole. This is without considering the worsening wider economic climate.
Product Weaknesses
When I was asked to comment on the new artwork and beta concept a few months ago, I reported back saying something like 'looks like a five year old has done it'.
When it was launched, the functionality of the site was appalling. How a company like Autotrader can launch a site with so many technical flaws is incomprehensible.
The most concerning part for me was the reaction of the most important people in the whole process, the users. If you have not seen this then I would urge you to look at it:
http://tinyurl.com/y8wrf24
Then there is the new 'technology'.
Launching products like enhanced advert sizes, pay per click and promoted listings is hardly driving the market. I accept BETA is a great product in concept but as referred to earlier, that was not ready at launch.
I do not want to see advertisements for breast enlargement alongside my cars. As lovely as my friend's wife is to look at, I do not want to see any form of advertising next to mine. You are a classified car site, that is what I want to see, that is what customers want to see.
I notice from your latest dealer panel, you expect us to be amazed by telling us we can have a 'fully branded' display if a customer clicks into our car. That is exactly what we should have in the first place.
Cost
I have just used some of my saving in my package reduction by signing up to a 15 car agreement with motors.co.uk. The cost of this is £81.25 + VAT. Autotrader is approximately £500. I cannot confirm exactly as I am waiting for a new invoice.
I can list a car on eBay with nine pictures for 28 days for £12.99 including VAT. Some £150 for fifteen cars, if I sign up for an eBay motors package it would be less.
Can you honestly say you believe Autotrader is worth that much more?
One of my biggest issues is the lack of product flexibility. I cannot use itemised pay per clicks, I cannot chose not to have video, I have to sign up to a specific number of cars. If I had the ability to be more precise with my spend, I might spend more.
Motor dealers are notorious for spending money at advertising as a knee jerk reaction, this used to be done through an advert in the paper but dealers are not using this any more for obvious reasons. Here is a glaring business opportunity for Autotrader to take yet it fails to do so.
Lack of Proactivity
I had a phone call from Vodafone when my contract was close to the end saying that they had reviewed my deal and they had a new one which would save me a lot of money. I now spend a third of what I did but I am still with them. I could have spent a third with O2 or Orange but they kept me on board.
I have been overspending for six months or so, I am sure you have the technology to write reports which isolate dealers in my position but where is the outbound call?
I had been a subscriber to Autotrade Mail since we started in 2007 and was very happy with the product. I received a letter a month ago telling me the cost of the service was increasing by 25%. I asked Laura (sales manager) why, 'because we have not had a price rise for ten years' she replied, 'yes, but what about all the extra subscribers you have now, shrinking margins etc etc'......silence. Exactly the sort of blatant profiteering that we are seeing with Autotrader.
I finally met my local representative some two weeks ago. When I told her that I had heard you had a retention team that was cutting deals to existing customers, she told me she could do nothing about it and had to liase with someone else.
What is her function? As lovely as it is to see a nice girl with a pretty smile asking me what business is like, I am afraid I am too busy to indulge in meaningless chit chat. She said to me 'there is a brick wall up and I can't get over it' during her visit, 'that is because you don't have any ladders' I replied.
The irony of it all
What makes me laugh the most is the new CRM hat that everyone at Autotrader is wearing. You are telling me that I will get monthly visits and reviews and that essentially you want to cuddle me.
The current pricing and product actions do little to reassure me your long term goals include building customer relationships.
You now want to put prices up from March the 1st.
This is not a good start for the new regime......
Thursday, 7 January 2010
Scrappage - Papering over the cracks - Part I
Eighteen months ago, many franchised dealers were left hanging over the financial precipice with only the thinnest of credit lines or reserves preventing their doom. Inevitably there were some casualties and most towns saw at least one familiar dealer face disappear.
The scrappage scheme is forecasted to end next month and unless there is another form of respite, some of the dealers who survived by their fingernails could again be left dangling on the edge.
So why are many in this unfortunate position?
The noughties (I cannot get my head round this expression but for lack of a better term) was the period of excess in all industries and the motor trade was no exception.
Record registration figures, easy credit and a spend culture meant manufacturers of all sizes went on the offensive for market share and it was down to the dealer network to deliver it.
Most franchised dealers are independently owned by groups of differing sizes or in some cases owner drivers. Manufacturers reluctantly get involved in motor retailing but central London locations are often manufacturer owned.
European competition legislation saw a change of margin structure for dealers in the noughties. Whereas in the past a dealer bought a car for a typical wholesale cost of some 15% less than retail, front end margins reduced to between 5-8% with an additional 7% or so subject to both target and dealer standards.
The term 'dealer standards' will cause dealer principles or company directors up and down the land to shudder. Essentially a large operating manual exists for most manufacturers, usually taking the form of an acronym. This 'bible' covers everything from colour of the showroom carpet to how an enquiry is managed.
Using the target and dealer standard payments as a form of carrot, manufacturers encouraged many motor businesses to invest in new premises or redevelop existing sites. Again, examples of this will be evident anywhere across the country.
It should be noted that average returns for dealers had dropped from somewhere like 10% in the 1990's to around an average of 2%. Porsche retail consistently led the market with returns of 4-5% so increasing volume was paramount to retain profitability.
So armed with large mortgages and loans from manufacturers, many dealers embarked on relatively large scale developments using market projections which to say were ambitious would be an understatement.
And then the wheels came off.
Scrappage has limited the impact of large scale volume reductions for many dealers but those searching questions are soon to be asked of the industry again.
The next part will concentrate on the weakness of the retail motor industry.
The scrappage scheme is forecasted to end next month and unless there is another form of respite, some of the dealers who survived by their fingernails could again be left dangling on the edge.
So why are many in this unfortunate position?
The noughties (I cannot get my head round this expression but for lack of a better term) was the period of excess in all industries and the motor trade was no exception.
Record registration figures, easy credit and a spend culture meant manufacturers of all sizes went on the offensive for market share and it was down to the dealer network to deliver it.
Most franchised dealers are independently owned by groups of differing sizes or in some cases owner drivers. Manufacturers reluctantly get involved in motor retailing but central London locations are often manufacturer owned.
European competition legislation saw a change of margin structure for dealers in the noughties. Whereas in the past a dealer bought a car for a typical wholesale cost of some 15% less than retail, front end margins reduced to between 5-8% with an additional 7% or so subject to both target and dealer standards.
The term 'dealer standards' will cause dealer principles or company directors up and down the land to shudder. Essentially a large operating manual exists for most manufacturers, usually taking the form of an acronym. This 'bible' covers everything from colour of the showroom carpet to how an enquiry is managed.
Using the target and dealer standard payments as a form of carrot, manufacturers encouraged many motor businesses to invest in new premises or redevelop existing sites. Again, examples of this will be evident anywhere across the country.
It should be noted that average returns for dealers had dropped from somewhere like 10% in the 1990's to around an average of 2%. Porsche retail consistently led the market with returns of 4-5% so increasing volume was paramount to retain profitability.
So armed with large mortgages and loans from manufacturers, many dealers embarked on relatively large scale developments using market projections which to say were ambitious would be an understatement.
And then the wheels came off.
Scrappage has limited the impact of large scale volume reductions for many dealers but those searching questions are soon to be asked of the industry again.
The next part will concentrate on the weakness of the retail motor industry.
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