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Blog Post #2 – Great customer service starts with setting best practice standards

9/25/2013

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Welcome back to the Improve My Dealership blog brought to you by eTag, the dealer key management systems provider. We’ve decided to focus Improve My Dealership posts (which we will issue every three weeks) on exploring avenues to efficiencies and higher profitability for dealerships.

During the last few weeks there has been a good deal of media attention given to National Franchise Dealers Association (NFDA) Trusted Dealers ‘10 Points of Difference’ for used car sales operations: http://www.trusteddealers.co.uk/10-points#point-9 which is gaining support across the dealership world ahead of a potential backing of the code by Which? (previously known as the Consumers’ Association) and Trading Standards.

The 10 points of difference are a great start. To summarise quickly, all franchised dealers that want to be in the Trusted Dealer scheme must prove the following:

1.       Nothing to hide: All cars must be background checked to avoid inadvertent trading of cars that have been stolen, involved in serious accidents etc.

2.       No nasty surprises: All cars must be bought legitimately and every vehicle is checked to make sure there is no outstanding finance on it. The dealer must own the vehicle the customer is buying off them

3.       Every inch. Every car: All cars must be subject to a full mechanical inspection and faults rectified before it is delivered to the customer

4.       The clock never lies: No ‘clocking’ of cars will be done. This is effectively theft as it is misrepresentation of the car by giving it a lower mileage than the reality. The result is often that servicing is not done at the right time and serious maintenance changes like cam belt replacement will be done late and put the whole engine at risk

5.       Try before you buy: All Trusted Dealers need to offer a proper test drive of the car they are planning to buy

6.       Passed with flying colours: All Trusted Dealers will make sure there is a minimum of 3 months MOT on a used car, many offer a full year’s MOT today.

7.       Not a care in the world: Trusted Dealers offer a warranty or guarantee with used cars so that if there is a problem shortly after delivery it can be taken back and rectified free of charge

8.       Trade in and trade up: Trusted Dealers must welcome part exchange and use that as a contribution to the purchase of your new car.

9.       See yourself in it: Every used car from a Trusted Dealer comes with a full professional valet inside and out

10.   No need to stretch: Trusted Dealers must offer you finance to purchase your car. All Trusted Dealers must also offer service plans which mean that you can budget your servicing costs monthly or even pay upfront as you purchase your car.

There are no doubts that the NFDA’s Trusted Dealers 10 Points of Difference scheme - if it is promoted well and the consumer is educated to look out for its badge - offers a great benchmark for best practice when selling used cars in the UK.

We liked it so much, we decided to take the concept of standards into our area of specialism – key management in dealerships - and apply them to see what high standards in dealerships’ handling of customer keys might look like.

We came up with the following, which we believe constitutes Best Practice Key Security:

1.       Remove all personal keys and give them back to the customer before taking your vehicle keys

2.       Label your key (ideally with your name and registration) so that it can be found if misplaced

3.       Replace your key free of charge if we lose it

4.       Store your keys in a secure cabinet whilst not in use

5.       Keep a secure audit trail of when and who used your key whilst with us

6.       Never keep your key with your vehicle unless someone is working on it

7.       Only allow authorised users to access to your keys

8.       Offer the ability to review the usage of your keys on request, in a fast and simple-to-understand way

9.       Return your key and vehicle to you in a timely manner

10.   Treat your key as if it was one of our own.

Once we had drawn up this 10 Point Plan for Best Practice in Key Management we were acutely conscious that for it to work we would have to persuade dealers of its value - as many of them may not immediately be able to offer all 10 assurances and might need to invest in training and equipment to achieve it. We also knew we needed a system for monitoring standards, awarding certificates and stripping dealerships of these certificates if they failed regular audits of their key management standards and policies.

In short, we realised fairly quickly that the sort of charter mark we were looking to launch only works if it is backed, enforced and marketed by a relevant standards body with a strong following just as the Trusted Dealers scheme is by the NFDA.

Do you think key management should have its own Standards Charter?  Would conformity to an agreed set of principles and processes help your dealership to stand out from the crowd?  Please feel free to post your comments – if there’s a positive reaction, we will set up and promote an official Key Standards Charter on your behalf. At the very least, what this exercise illustrates is that every interface with the customer in a dealership is valuable. Procedures and standards for all of these interactions need to be set with a view to meeting or exceeding customer expectations. And they need to be backed by an organisation the customer can place their faith and trust in.

That is why I was really encouraged to read in MTN a couple of weeks ago about how Jaguar dealers have come out top of the JD Powers Dealer Satisfaction Survey for the second year running: http://motortradenews.com/mtnb/050/#4/z , largely because they understand as Jeremy Hicks, Jaguar Land Rover UK MD said that their “dealer network is the most important point of contact we have with our customers”. The Survey recognises dealers for good service including friendly and efficient and value for money service. Dealers that want to sell more and hold onto more after-sales business could do a lot worse than drawing up and living buy a standards charter of their own for all aspects of interaction with customers.

We believe setting standards, living by them and communicating them effectively to staff and customers alike, is the bedrock of any customer service improvement drive in dealerships. More power to NFDA for its Trusted Dealers scheme. Let’s hope used car dealers nationwide continue to sign up and promote it.

We will return to many of these themes in more detail in future posts so please sign up for our blog or check back to this site or www.etagsolutions.com   for the latest thoughts and tips on finding routes to increased profitability.

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Blog Post #1 – Productivity and Profitability in Dealerships

9/3/2013

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Welcome to the Improve My Dealership inaugural blog post. Yes we too recognise the power of self-publishing, entering and stimulating the big debates in the UK car dealership world. We’ve decided to focus Improve My Dealership posts (which we will issue every three weeks from now on) on exploring avenues to efficiencies and higher profitability for dealerships.

On the flip side, we will not be afraid to tackle the issues which might damage profitability if dealership management teams do not address them. Our posts should act as a digest for busy executives that do not have enough time to plough through AM, ARB, MTN and a myriad of other online trade titles which we will draw from. I hope you like it. If you do please spread the word and sign up at the top of this page to receive future posts.

I was reading through the 2012-3 financial results of some of the biggest names in the car dealership world and what strikes you is that - for many of these firms - scale continues to be all-important for progressing in the UK market.

For example Inchcape was able to continue growing this year even while margins and profitability fell away.  Its H1 2013 financials revealed an increase in sales in its UK retail division of 4.8% to £1.12bn but a trading profit drop by 0.9% to £33.5m. Inchcape sold its Ford businesses to Group 1 Automotive in February and invested in facility upgrades. For more on this go to ARN at: http://www.auto-retail.co.uk/public/02-08-2013/record-first-half-inchcape?utm_source=Inchcape+H1+2013&utm_medium=News+Alert&utm_campaign=Inchcape+H1+2013

Inchcape is preparing for the installation of BMW sub-brand ‘ibrand’ infrastructure at five UK BMW locations for a Q4 launch and completed major VW corporate identity upgrades at Wirral and at Swindon. Before the end of 2013 it will complete enlargement of its BMW, Mini and Motorrad retail centre in Sunderland and a full upgrade at BMW Norwich.

Size and heavy exposure to less mature markets – most notably China and the Asia Pacific Rim down to Australia – are clearly bolstering Inchcape Retail’s financials and enabling it to continue investing in the UK market, even as margins do come under pressure.

And UK dealers that are investing in discrete parts of the market - and principally those operating at the prestige-end of the market - are enjoying real growth. Perhaps is should be no surprise that HR Owen has set up a new Lamborghini dealership: http://www.motortrader.com/latest-news/hr-owen-lamborghini-dealership/ in Pangbourne recently. Almost simultaneously it turned in strong interim profits - up 23% on the previous year - and also picked up Motor Trader Dealership Group of the Year Award this summer: http://www.motortrader.com/industry-news/hr-owen-profits-surge/ . At the prestige end, other groups have also been investing in growing their BMW estates: http://www.am-online.com/news/2013/8/6/bowker-bmw-reveals-750-000-expansion-plans/33389/

So what has HR Owen been up to apart from cashing in on the growing luxury market and increasing its used car sales by 24%? Areas hinted at in the piece including improving procurement systems and other ‘business processes’ and adopting a ‘multi-channel approach to advertising’ (for this read heavier investment in building its online presence and securing online sales).

Perhaps HR Owen’s directors have been reading one resource I regularly turn to for new ideas in our market – US online title DealerMarketing which recently detailed how one US Chrysler Jeep Dodge dealership had benefitted from ‘video SEO’: http://www.dealermarketing.com/internet-marketing/search/3106-dealership-profile-branhaven-chrysler-jeep-dodge-ram?utm_source=DM+Weekly+2013-06-20&utm_medium=email&utm_campaign=DM+Weekly

There is no doubt that for top UK dealerships, scale is only part of the equation for securing continuous and profitable growth in a highly competitive market.  Other keys to profitable growth appear to be knowing your market intimately; looking for new brands and vehicles to help serve that market better; as well as engaging more deeply with customers and prospects (at whatever stage of the buying cycle they are in, see: http://www.dealermarketing.com/bizdev/crm-solutions/3107-four-tips-for-turning-be-backs-into-sales?utm_source=DM+Weekly+2013-06-20&utm_medium=email&utm_campaign=DM+Weekly ) and through whichever channel they prefer to use. Deeper engagement through social media, ‘video SEO’ as well as investment in other online marketing activities, is also becoming crucial to help the customer find their way to your door.

We will return to many of these themes in more detail in future posts so please sign up for our blog or check back to our site for the latest thoughts and tips on finding routes to increased profitability.


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    The ImproveMyDealership blog is published by Paul Smith, Director of Traka Automotive, the leading electronic key management solution for car dealerships. Paul has worked in the UK Automotive Industry since 1995. He is passionate about Retail Dealerships, the challenges they face and the opportunities open to them

    “Any opinions stated here are those of Paul Smith himself rather than the company he works for.

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