Lead Management

As I was reading my colleague Mark Pauze's piece on Asian Americans and the U.S Auto Market, the table which listed the Asian OEMs, got my attention. It seemed the Asian Americans were heavily into Asian makes. But how do they compare with the rest of the population?

So I used PolkInsight to pull some numbers:
The average distribution of new registrations in the U.S. is something like 50% Asian, 40% Domestic, and 10% European makes. Both African American households, and Eastern/Western European households in the U.S. fall in line with that average.

The second group based on the percentage distribution, which includes Eurasians, Hispanic, and Pacific Islanders had an average distribution of 60% Asian, 25% Domestic, and 15% European makes.

Finally, the Asians lead a group of their own with 75% Asian, 10% Domestic, and 15% European makes. The interesting part isn't only that Asian Americans buy overwhelmingly Asian makes, but that they are the only group along with Middle Eastern American households where Domestic makes gets the 3rd place in purchase preference.

What does this all mean?

• A dealer candidate may want to think twice before opening a Ford or GM dealer in a prominently Asian American neighborhood
• In terms of lead management, a lead coming to an Asian OEM from an Asian American household might have to be scored a lot higher than any other ethnicity in terms of possibility of a sale

Interesting stuff!

*Data Source: PolkInsight, new retail registrations CYTD August 2009
Percentages are generously rounded and approximate

Posted by Cenk Hepaktan, Global Product Strategist, Polk (11.13.2009)

In my last blog post, I shared two critical dealership survival strategies for today's economic slump: 1. Know your market and 2. Obtain a fair and objective assessment of your dealership facility. Following are two additional steps that all dealers should take in light of the current automotive industry challenges: 

Step 3: Maintain a steady and open dialog with your OEM and understand your dealer agreement: In most countries, the only way new vehicles can be sold or have warranty service performed is through a franchised dealer. Accordingly, auto companies are continually seeking to optimize their dealer networks by evaluating and scoring such items as sales performance, customer satisfaction and financial strength. Through open and direct communication with their OEM's field or home office personnel, dealers need to be in tune with their OEM's network strategy and how they fit into it.  Just as every college student knows what their GPA is, every dealer needs to know what their performance scores are with their OEM. Any shortfalls need to be addressed with a corrective plan.

While listening to the recent Capitol Hill testimony regarding U.S. dealer terminations, it became painfully clear that many dealers either didn't read or understand their dealer contracts to know what was expected of them. Most don't read it until there's trouble.  Dealers need to thoroughly understand every facet of the contract by reviewing it with either their field rep or business attorney.

Step 4: Take care of your current and potential customers:  CRM, business development centers and effective lead management are more than just industry buzzwords; they are the most important activities a dealer can and should undertake to ensure survival. Many dealers have told me that following up with existing customers is the major initiative getting them through these tough times. 

Customers now expect basic conveniences like service shuttles or free overnight service loaners. Dealers that don't offer these and other customer perks aren't even in the game. Customer handling may get a little lax in a 17 million unit industry, but it's importance cannot be overstated in a 10 million unit industry.

The economy will eventually recover, but the "good old days" and "boom times" for dealers may never return. The future for a dealer includes increased competition from existing dealers and new entrants (e.g., Mahindra, Geely, Cherry, Fiat and the "new" Saturn), continued economic pressures (fluctuating oil prices, credit & real estate) and a more discriminating consumer with lofty expectations. The days of "Mom & Pop" dealerships are long gone, and going forward, the successful dealer must be sophisticated, technologically advanced and competitive in all aspects of the business.

Posted by James Dimond, Vice President of Global Network Planning, Polk (07.29.2009)

A couple of weeks ago (June 25th – 26th), I attended the NAMAD (National Association of Minority Automobile Dealers) conference in Chicago. NAMAD is committed to increasing opportunities for ethnic minorities in all aspects of the automotive industry, representing all African American, Asian and Hispanic dealers in the United States. These extraordinary entrepreneurs and community role models who call themselves dealers own or manage franchises that cover all Asian, Domestic and European brands.  I was invited to participate in the opening panel discussion. The goal of the panel and overall conference was for the approximately 1,200 minority dealers to come together and discuss the current state of the automobile industry and what Minority Dealers can do, both collectively and individually, to get through the current tough times.

I was joined on the panel by my colleague Jim Dimond, VP Dealer Network Planning, and the following:
 

• Rev. Jesse Jackson – World-renowned Minority Leader
• Damon Lester – President of NAMAD
• Sil Gonzales – Owner, Casa de Gonzales Automotive Group
• Jay Rivchin – Owner, Dadeland Chrysler, Dodge, Jeep
• Todd Bullard – Partner, Harris Beach Law Firm
• Randi Payton – Owner, On Wheels Magazine

The three-hour panel started with me sharing my thoughts on what happened, both in the auto industry and economically, that created the current dealer crisis, which lead to a discussion on group and individual dealer solutions.

 

First and foremost, the minority dealers MUST come together as a single voice and support a united vision if change is to occur. I was a little disappointed to see only 25% turnout at the National Conference (300 of the 1,200 minority dealers in attendance). Based on this, I agree and support both Jesse Jackson and Damon Lester when they suggested the group come together as one unit instead of continuing with their current fragmented approach and collectively work with Washington to get some short-term relief. The relief from Washington could include a share of the bailout money designated for the Minority Dealer Community or some form of guaranteed loans.

 

Secondarily, there are immediate solutions that each dealer could independently implement to improve their business position including:

• Recognizing the days of the “Fat Cat Dealer” are over and changing the way they’re doing business to align with the current industry.
• Understanding the numbers are the key to success. What do I mean by this? For example, if a Dealer Principle does not like analyzing the numbers, then they should hire someone that does. Organizations such as Polk have solutions that can help dealers sell more cars while realizing more Return on Investment.
• Building or strengthening their relationship with OEM regional representatives.
• Proactively posing questions to OEM Reps to better understand their current position and what changes need to be made to improve this position with the OEM.
• Re-assessing and improving their lead management strategy.

I recommend the extraordinary entrepreneurs and community role models who call themselves minority dealers go back to the basics that allowed them to become the successful Dealer Principles, Vice Presidents and General Managers they are today. Know your market including current strengths and weaknesses, focus on the customer, get behind the numbers and overall, remember it’s a business. If each minority dealer takes this approach with his or her dealership, then collectively the minority dealer community will persevere despite the current automotive industry challenges.

Posted by Marc Bland, Manager of Analytical Solutions, Polk (07.13.2009)
 

I am excited to be kicking off this launch of the Polk Blog. Together with many of my Polk colleagues, I welcome the chance to share thoughts and insights and to engage in dialogue on the automotive industry challenges that surround us every day.

Our goal is to share perspectives, market analysis and forecasts on the shifts we see in the global automotive marketplace. I have no doubt that the next few years will be turbulent. There will be continuous change in sales trends, lead management practices and aftermarket support that will drive loyalty to manufacturers and their dealers. Other factors like changing CAFE regulations and hybrid technology advances will influence product decisions in the industry.

And the breadth of changes will be global. I made a presentation last week on the Chinese automotive outlook. One of the highlights for me was the significance of General Motors as the leader in the Chinese light vehicle market (17.4% market share). GM had the largest largest share gains in China in 2009, succeeding despite the turmoil around the US bankruptcy issues. There will be winners and losers around the world, and the final outcomes will be very volatile.

It is going to be an exciting time. Welcome, again, to our inaugural Polk Blog. We welcome your comments as we discuss our perspectives.

Posted by Stephen Polk, Chairman/CEO, Polk (06.29.2009)