Coachworks Consulting is urging Dealer Principals to do all they can to maintain margins and profitability rather than cash in on self-registration bonuses.
Coachworks made the call after Cap said that self-registrations now account for three in ten new car sales.
Karl Davis, Managing Director of Coachworks Consulting, said: “There is already evidence that self-registrations are having an impact on forecourts, with the average period a second hand car is in stock rising to 65 days this year compared to 60 last year.
“New car registrations were up 9.3 per cent in July, but wider economic indicators like GDP and earnings tell us the market can’t be growing, and it’s self-registrations that are skewing the picture.
“When even premium brands are forcing volumes to the point at which you can get £5,000 off a BMW 530 diesel for example, you know that you’re witnessing a mad market”
An over-reliance on self-registration kills margins and profitability and it reduces the earning potential of the salesman, Coachworks said.
But retail groups can increase revenues and profitability if they commit to bringing in higher-margin retail business in Quarter Four.
Research carried out by Coachworks this year on behalf of one the largest manufacturers in the UK found there are four crucial elements to securing a larger share of a smaller market:
• Heighten retail marketing activity with finance-led offers or free servicing
• Present deals to change to those service customers that are entering the buying window
• Interrogate enquiry management reports to identify the real opportunity to do business
• Ensure a great guest experience in the sales department, with presentations and test drives tailored to the customer
• Social Media should be central to your digital marketing strategy; it costs next to nothing but is hugely valuable
Coachworks Consulting has recognised the need for businesses to increase higher-margin retail sales with the launch of Soul Provider – a 26-week culture change programme for car sales departments designed to generate more revenue; improve enquiry management; differentiate the dealer from the competition; strengthen sales coaching and control; and deliver greater margin retention and up-sell.
The car sales department signs up to specific growth targets and every participant is shown how to sell on value rather than price – protecting margins and helping feed the aftersales department.
Soul Provider identifies new opportunities to do business and it analyses the entire sales process using the “tell me, show me” approach.
It uses authentic mystery shops to identify opportunities for sales growth, and it encourages senior managers to make sure enquiry management software reflects reality rather than masks it.
Mr Davis said: “You can have all the enquiry management technology you like, but if it’s not giving you a true picture then it’s counter-productive. Soul Provider shows Dealer Principals how to ensure IT is used to help growth rather than hinder it.
“In addition, combining authentic mystery shops with enquiry management software is a superb way of identifying growth opportunities and finding out how salespeople can improve.
“If you know your opportunities to do business, you can scrutinise your team, find out what the best performers are doing differently and apply it to the worst performers.”
He added: “If you’re mortgaging the last quarter now by using self-registration bonuses for short-term gain, there’s likely to be one hell of a hangover by the end of the year.
“To be confident of an acceptable Quarter Four trading position, Dealer Principals need to be putting in place marketing activity and enquiry management controls that will give them the required level of retail business. Soul Provider is an excellent way of doing this.”
To find out more, call 01335 324325 or visit www.coachworks-consulting.com