Cutting up the sales cake, St Patricks and Ford

I hope that you are enjoying a good St Patricks day and that life is treating you well. There’s been a fair bit of stuff that has been happening at this end and loads of stuff happening in the auto world so I felt that it’s time for a decent catch up.

Onto our news;  We have our Irish newsletter to bring you up to date with the trade there Issue 78 we’re onto issue 6 of our Pit Stop which is worth a quick visit for the lighter view and we have a complete set of New downloads to pick up. We are also now on Twitter, Facebook and our Blog is now out there and bang up to date.

thats enough news from me; what i find interesting when you compare the news from different countries is the general mood of the news that is covered; Ireland still somewhat downbeat and negative, the UK motor industry more positive and the US just getting on with business (albeit they have a few problems with a fair few recalls at the moment).

It’s the way the news is delivered that makes the difference, look at how Toyota dealt with their problem at the beginning and how they are dealing with it now with full page adverts in the press globally, using the social media websites really effectively and really getting behind their dealers. They are not out of the woods yet but they are working on it.

Sales figures


The true picture of the drop in car sales over the last 5 years (updated January 2012) shows the impact of the economic downturn in the west on the automotive industry.

Year	Ireland	UK	USA
	New car sales	New car sales	New vehicle sales
2007	186,540	2,403,376	16,460,000
2008	151,722	2,131,795	13,493,000
2009 2010 2011	57,460 88,373 89,896	1,994,999 2,030846 1,941,253	10,601,000 11,588,783 12777939
Fall since 2007	-51.8%	-15.5%%	-22.36%

The reality of this economic downturn is that it’s a bit like a an earthquake, the initial shock has resulted in factory stoppages, sales diving off of the cliff, dealers, manufacturers and their supply chains suffering and some going bust in a realtively short period of time.

That was the first wave, like an earthquake there have been and there will continue to be aftershocks. The US for example has dropped nearly 10 million units in just 3 years; that’s a lot of cars out of the system. The impact of this drop is only just starting to be felt in dealerships as the aftersales market slows down and is unlikely to recover quickly (aftersales always lags behind sales and is suffering a double whammy as customers will put off critical servicing to the last minute when times are tight). Recovering this lost business is going to prove an interesting challenge. As with most challenges in life it’s the way that you see them, as you deal with them, that will make the difference.

A lot of the news at the front line is still about cutting back, reducing spending and cost bases. Whilst it’s very prudent to keep a really close eye on all business expense lines in your accounts in an economic downturn, it’s just as important to make sure that you are exploiting every single sales and aftersales profit opportunity that you have. It is still important to get your pricing right, it is imperative that you market your cars and your aftersales services in the correct mediums (internet, press, promotions and CRM) and it is critical that you give you customers a level of service that is second to none.

Ford


It is also important to make sure this is not just directed at sales customers. If you look on our Facebook page you will see some pictures of a Ford initiative in the US to help their dealers improve aftersales profitability. Ford are getting behind a Vehicle Health Check and customer loyalty program across the country because they have to; it’s not a like to, if they don’t help their dealers recapture their aftersales business it will be lost and more of their dealers will disappear from the landscape.

The same thing is happening in the UK with most franchises recommending or requiring their dealers to install a vehicle heath check program. Ford Ireland have recently recommended to their dealers to get behind a vehicle health check program called AutoVHC as a key component in Ford’s initiative to help their dealers increase profitability. 

AutoVHC is a computerised vehicle health that has been installed in Ireland for the last 7 months showing an increase in dealer profitability there of €33 per repair order within 2 months of being installed (go to our friends page for more information on it).  Ford has to get behind initiatives like this because if it doesn’t more of its dealers will fail which will ultimately mean that their customers will suffer. That’s the bigger picture.   

This is my third recession in the motor trade and there will be more casualties to come, absolutely guaranteed. There will also be winners though; and my belief is that those dealers will be the ones that make sure that all of basics are all in place, the ones that really focus on their customers and those that work with each customer to ensure that they have given the customer their very best. This does not mean focusing solely on price (although there will be consumer pressure to drop prices which you will need to react to) but focusing on every profit opportunity (to maximise the opportunity and exploit the potential of each profit centre in their dealership with more focus than ever on aftersales).

I have uploaded an interesting report from Ogilvy North America on marketing in a recession which is well worth downloading and reading around this very area.

And perhaps now will also be a good time to revisit your approach to customers. Pure sales processes work, they serve their customers and they serve the businesses that employ them well. Pure sales process is about ensuring that your customers are genuinely welcomed into your business. It’s about finding suitable products that match your customer’s needs, it’s about making sure the car fits the customer (through a test drive) and it’s about giving the customer all the information they need to make an informed decision. Trade-ins I believe should be pro-actively encouraged from customers (by calling them) as they supply us with the used cars to sell and you are going to have to work harder to find good used car stock as well (one of my clients has a dedicated used car buyer employed in a different country to source supply).

  

And if the customer doesn’t buy on the day then I believe that it is simply good manners to follow them up with a simple call to say thank you for the opportunity to help them (another core of the AutoVHC product).

That’s pure sales process and the ingredients don’t change much, but the way you deliver them does (like baking a cake, the ingredients will all be pretty much the same, the way the cook prepares the ingredients, cooks and presents the cake is what makes the difference).

There are opportunities to exploit in a slowing market and perhaps the positive spin on the downturn is that it will help you really tweak the performance of your company and the tweaks will not only help you sustain the profitability now but will also help you grow in the future; and at the very least your business will be better prepared to capitalise when things start to really improve.      

That’s my monologue done and dusted for this week and I hope that I have drivelled on too much. 

Have a great start to the end of the week! and hopefully see you soon.

Brian