What’s a sale?

I seem to be on a stream of blogs with a common theme of looking at things differently, and potentially getting different answers as a result.  I make no apologies for this one continuing that theme as there is always a danger of getting stuck in a rut, particularly when an industry tends to be quite insular as is the case in automotive.

Following on from last week’s blog on rethinking what a factory produces, there is also an argument that we should rethink how we measure the performance of sales processes.  This is going to be increasingly important as we move further into omni-channel as the customer journey will very likely have used different resources, and treating the point at which the customer signs the contract as the sales channel for performance measurement and reward purposes may not reflect the truth.

Some years ago, I attended a breakfast meeting with a number of dealers with a discussion around online sales through dealer websites.  Whilst one dealer adamantly insisted that websites were simply another form of advertising, another who was clearly well ahead of his time talked about his website as being his eighth and largest store.  He described how each morning he “walked” this showroom to make sure that all the stock was correctly displayed and promoted in the most positive way.  He recognised that whilst at that time it was not possible to complete a sale online, it was actually his most important source of leads that would then be transacted in his seven physical sites.

I was reminded of this in research that I conducted for ICDP’s autumn meeting for members of our research programme last week.  I was looking at future facility needs but also revisited our work on outlets in shopping malls which in 2017 we assessed to be primarily a marketing tool rather than a sales channel.  However the process in these mall outlets has been improved and the tracking of prospects from an information sharing discussion and possibly a test drive at a mall through to that prospect turning up at a physical dealership is now much better.  We identified outlets in France, Italy and the UK where they were able to show that an initial contact in the mall often led to the sale six to twelve months later in a dealership.  Even though the tracking was still imperfect, it turned out that the mall outlets were initiating more sales than any traditional dealerships in the same group and in one case the same franchise network.

As the capabilities of omni-channel networks improve through more capable customer-facing systems and more integrated customer data (whether under agency or franchise), this question of understanding the contribution of different channels will become more acute.  It is relevant for the planning of physical networks with the potential not only of mall outlets, but also locations that might major on aftersales whilst also offering test drives and simple sales support.  It is also relevant to how staff are rewarded.  If you only measure staff on the final output, i.e. contract signature, then this will drive behaviours that create barriers to the seamless customer journey promised by true omni-channel.  A salesperson will rugby tackle a customer who wants “time to think about it” rather than let them leave the showroom and complete the deal online, if that means that a sales commission or bonus will be paid to someone in the customer call centre rather than to the salesperson.  Some years ago, a regional UK dealer group (Benfields, now part of Lookers) operated a pay plan where the call handler in the contact centre and the salesperson shared the commission on a sale that was routed through the call centre to the dealership.  This incentivised the call handler to fully address all the needs of the potential customer and make an appointment for them in the dealership (online sales were not possible at this time).  The salesperson in the dealership knew that any lead was well-qualified as the call handler ‘had skin in the game’ so there was a good prospect of a sale.  Everyone won from this balanced and equitable process.

The situation is not restricted to car sales.  If ‘amber’ work is identified during a service visit, i.e. work that will need doing before the next service, when does the actual sale take place?  In accounting terms, it is clearly when the invoice is created, but in reality, the customer possibly came back because the need was well-explained by the service receptionist when they picked the car up originally, a call centre follow-up was timely and well-managed, or the workshop went the extra mile to minimise the inconvenience of bringing the car back in again for the work to be completed – or any combination of these.

Similarly when over-the-air upgrades become more common to add features on demand, is that a sale by the manufacturer who offered it to the customer through an in-car message on the display, or by a salesperson who recommended considering the upgrade after the customer had the chance to experience the car for a few months?  When for regulatory reasons (as in Australia now) or due to the restrictions of some agency sales processes, you can’t complete the sale of some F&I products at the same time as concluding the sale of the car itself, does the original sales person who explained the offer to the customer or the person who handles a follow-up call to conclude the sale get the credit for that sale?

Whether we are thinking about planning of physical and digital networks or the management and reward of staff in frontline and supporting roles, it is clear that without tracking actual customer journeys and their touchpoints from start to finish, we are flying blind.  Capturing and sharing data will not only improve the customer experience, but also the ability of manufacturers, dealers and repairers to plan and manage their businesses.