Half-time team talk

The June Auto Retail Live webinar gave the opportunity for key auto retail figures to give their opinions on the state of the market and advise on how businesses can improve in the second half of 2024. The panel of the Business Booster comprised: Nathan Tomlinson, owner/dealer principal, Devonshire Motors; Craig Petty, sales director at Hatfields and Real World Analytics and RWA Automotive’s founder and CEO, John Hogan. Here are a selection of comments that were made but, you can listen to the whole event as a podcast, by searching for ‘Auto Retail Live’, wherever you get your podcasts from.

Choose your customers carefully

Chairing the panel discussion was industry expert Mike Jones, who acknowledged that business was tough and welcomed the advice that was forthcoming from the panel. Nathan kicked things off by saying that it was important to not try and attract every potential customer in the marketplace, but instead focus on the most likely successes.

“What we found very useful was getting people to drive EV products,” he explained. “We’ve run two-week long events introducing people to EV technology, including a traditional prospecting day with a lot of pushback from customers who were embedded in ICE and have very strong views. But, when customers drove an EV, not only did their perception change, but they were trying to find solutions for the obstacles that they had in their heads.” His key takeaway from the event was that retailers have more control than they think over converting customers to EV. “The key barrier is bringing them in, educating them and getting them to try the technology and ask questions – but not under the pressure of a sales environment.”

Meanwhile, Craig reported that he had a similar experience and agreed on concentrating on a specific target audience. “We want to look after people in our local area, so I always think that marketing budget should be spent around where your business is based,” he reasoned. “Where do you find customers? Look in your own back yard and make sure you keep hold of them. We are strong on customer satisfaction – our customers need to be happy and this is helped by us sponsoring local events and sports teams in the community.

Nathan added that it wasn’t so much about finding customers, but looking after the ones that you have got. John agreed that looking after existing customers was deemed more important – in some ways – than generating new business leads, saying that cleaning up the CRM is an important process. “Having accuracy around warranty details and when finance agreements finish, as well as other sales and marketing aspects, is vital to success.

Part-exchange possibilities

The conversation in the webinar touched on the downfall of Cazoo, with Craig saying he believed it would make retailers sharper. “Everyone thought that we traditional retailers were the dinosaurs but, actually, we proved that we know how difficult the market is and that we can roll our sleeves up when times get tough,” he reasoned. Craig added that there was a slight issue with negative equity in used cars – especially with EVs – but concluded that “it was less noisey than it was”.

Nathan acknowledged that a current factor at play is that there is currently a bigger gap between vehicle order and delivery, which gives people more time to conduct more research and shop around for deals. “But, at the end of the day, we have to be realistic. If we want part-exchanges, you have to pay the price, but also factor in the margins that you charge,” he stated.

Cost management concerns

Looking at the costs and revenues in place within auto retail, John recognised that the cost of living is the biggest factor for everyone when looking at new vehicles. “Driving efficiency across sales staff and aftersales technicians is a major priority,” he said. “There are more league tables as well as growing margins – and used cars are controlled there. The other opportunities we see are around more business with bodywork and alloys and also looking more at paint protection being offered to customers. Continuing, John reinforced the importance of aftersales. “Generally we find it doesn’t get as much attention as it deserves, but there is money to be made, there. “One of the most important elements is being as consistent as possible to ensure that customers know exactly what is on offer across your business.”

Roles and responsibility

When talking about staffing, Craig explained that his business runs lean, which means that it can react quickly when it needs to move people, without the tiers of management involved in a big PLC. “Our organisation is definitely one that has people taking on tasks outside of their main job role, but they actually enjoy doing them,” he reported. “If we’ve got an issue with long-term sickness somewhere, we have people in other departments who can step in and fill the gap.

“I think we’ve got a great workforce at Hatfields and what we also do well is look at the suppliers and people who work with us,” he explained. “If we are not happy with anything we either speak to the bosses or move to different suppliers. Relationships are important, but sometimes, when big amounts of money is involved, change is necessary.

Ideas for retailers

All three panelists had advice for retailers looking to improve business in the second half of the year. “People instinctively know what areas they are not so good at, compared with what they are good at,” said John. “So evaluate those areas and see how much money they are potentially leaving on the table – because it is easier to get a 20% improvement on something you’re not good at, compared with 5% on something you are already good at.”

Nathan – speaking from his own experience, suggested organising an EV event. “We need to start making a difference around the transition to EV,” he reasoned. “Whether that will return profits immediately is debatable, but you need to be part of the transition, because it is the only opportunity in the market at the moment. Now is the time to sow those seeds.”

Finally, Craig again stressed the importance of having the right people around you.

“If your business is working well – and you’ve got disciplines in place around test drives and conversion rates – my advice would be mitigating costs. Look at your suppliers – especially if you haven’t heard from them in a while – and find out if they have anything new in their business that might make or save you money.”

Boost your business: strategies that deliver additional profit

By John Hogan, CEO, RWA Automotive

As we enter the second half of 2024 and review performance, now is the time to identify additional opportunities to boost profits for the second half of the year. RWA Automotive sponsored the latest Auto Retail Live webinar on this very topic, so here are a few insights to where our customers successfully find additional profit.

The price is right

We are in a competitive market with used cars. Every vehicle matters now that supply is tight, so retailer need to deliver as much margin as possible. Most have implemented pricing policies, but maintaining them can be a challenge – this is where serious margin can be attained. We work with our customers on maintaining strict pricing policies such as 70 days with seven days grace. After that, the car is sent to auction. These policies are consistently reviewed, using the data to show you what cars are a problem and what prices need to be adjusted.

The golden goose of aftersales

When asked where we think many retailers are missing profit-boosting opportunities, we always say aftersales. Our team regularly sees potential for additional profit in VHC and workshop productivity. While this is not breaking news for any retailer out there, the amount of profit possible might be. Our customers see an additional average of £25,000 in earnings through focusing on these areas alone. That is a substantial boost for any business. Concentrating your efforts here in the next half year will lead to profit and set you up for success for years to come.

Closing out the first half of the year can be a hectic time, but it is also an opportunity to implement new procedures and ensure you are on track to deliver your year’s target. We hope the tips above help you and your business to achieve your goals.