Source: Reforma more information

Source: Reforma more information

Source: El Diario more information

Source: Revista T21 more information

Source: Reforma more information

Source: Reforma more information

ARTICLE OF THE WEEK

Execute the right programs.

If your marketing and sales processes were perfect, everything - and everyone - would work together to achieve a few differentiating advantages: flexibility to introduce (or discontinue) programs quickly; visibility to enable collaboration and efficient program execution; and innovation to stay in a game that's always changing. The fundamental characteristics of a "good" process are well known: simple is better; waste and redundancies are bad. Apply those truths to marketing and sales, and opportunities for "working smarter, not harder" are suddenly apparent.


OEMs: Here are a few suggestions.

• During program development and execution, adapt the principles of lean production already in place in your factories. Let dealers "pull" the programs they want, rather than you "pushing" programs (one after another) out to them. Collaboration allows you to address each dealer's most urgent problems (and escape a "one size fits all" mentality, because it doesn't). Test and measure a program's performance before you roll it out; then, resist the temptation to execute too many programs at once. The place to begin is with an honest assessment of the programs in place - all the programs - for new cars, CPOs, parts, captive finance, and service.
  
  
• Design programs around the dealer's processes, asking for dealer participation and input. By the way, have you ever noticed that you expect dealers to "fit" with your processes and not the other way around? For example, an informal question at a dealer meeting in the US revealed that almost half of the audience didn't know about key service offerings found on the OEM's DCS.
  
  
• The only way to know what's working - and what's not - is to look at the data. (Pay attention to the dealers' knowledge of local markets and customers. But don't forget: While dealers interact with customers all the time, roughly 20 percent of their data becomes obsolete every year). Say to the dealer, "Share your local market data with us; we'll help drive customers to your store." Encourage dealers to use your customer data to follow up on leads.
  

Ask yourself questions like these.

• Which of our programs are working? If one is not working, can it be fixed?
  
  
• How do our customers feel about the car buying experience?
  
  
• What do we do about regional differences in our marketing and sales?
  

Right now, the Asian OEMs have the lowest costs per vehicle for incentives, advertising, and distribution. And the Asians are investing in their businesses at a much higher rate. Is Toyota's practice of giving dealers marketing funds and letting them execute programs at a regional level a "best practice"? Honda, on the other hand, centralizes marketing, running it out of corporate headquarters. Is that the better way? Perhaps the most radical approach of all is no dealers; the CEO of Nissan is always threatening to sell his cars through Wal-Mart. And how will the emerging Chinese OEMs sell their vehicles? Dealers: You might have to start from scratch - mapping work flows, finding bottlenecks, and eliminating waste and redundancy. Once you have the facts - about what works and what doesn't - you can get your priorities in order. Sales people need to be trained and motivated. Together, OEMs and dealers can segment and target customers, and then put the right programs (and autos) in the right stores, at the right times, to appeal to the right customers.


Principle #5

"Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information."

Measure the effectiveness of your actions. Again and again.

It's easy to get caught up in a daily "to do" list. But if you had a free day to devote to your business, what would you do with your time? OEMs: Success can't be repeated (or failures prevented) if you don't know what went wrong in the first place; talk to dealers about programs and processes. Dealers: Tune into the key processes that can make a big difference in your financial results. Make it a routine to look at a half dozen key indicators about every month. Make it known that you're tracking these things, perhaps by posting them in a break room or discussing them with your key managers. Change one every now and then. It will keep your people on their toes. If you think you've realized a collaborative supply chain, what might you measure?


Suppose you could know anything. What would it be?

OEMs and dealers share a need for a few core metrics. These include inventory turns and gross margin, or customer satisfaction (including ease and speed of the transaction), promotional spending per vehicle, and sales productivity. Here are some rules of thumb for setting up a performance measurement system that really works:


Establish a common language.

Make sure everyone - the OEM and the dealer - uses the same definitions for key terms. Then, create a communication "dashboard" with the goal of sending fewer - and better - notices and e-mails. A dashboard should be a regular summary of all the measures that matter to both the OEM and the dealer, expressed in ways that create clarity and consistency. (Use the same measures and calculations over time to ensure validity.)


Illustrate the possible.

Establish a minimum rate of return for marketing and sales activities - for example, for specific or for lead management activities. While dealers might not accept the judgment of the OEM, they trust each other's numbers - so it's smart to publish the performance of other dealers, too (individually, by size, and by region) to establish an objective and independent benchmark. Of course, this suggests visibility to the dealers' activities and results. Leading OEMs have feedback mechanisms in place for data and processes shared with their dealers (such as leads, service reminders, warranties, and incentive management). Two-way data integration is key.


Measure the right things.

Many factors affect overall sales. Use control groups and other statistical mechanisms to isolate the true lift produced by specific sales and marketing activities, and then use that number to estimate the impact of future programs. It's critical that measures be linked to actions: Output measures alone do not suggest a course of behavior or correction; balance output measures with process measures to create an "actionable" measurement system.

A word to the wise (two of them, actually):

1. Manual metrics are never the answer. Metrics must be produced as a by-product of business processes. If there are no rewards for tracking metrics (manually), they won't get tracked; if there are rewards, the outcome will be biased. For example, when salespeople are compensated based on lead closure rates, only good leads get entered into the showroom control system.
   
   
2. Beware of incentives that become standard. Too often, an incentive continues long after the behavior supposedly triggering it has stopped. When it comes to incentives, the bar should be set high enough so that the bottom 20 percent of a dealer network doesn't achieve them.
   

Five things you can do Monday morning.

"You miss 100% of the shots you never take."

Deloitte estimates that OEMs and dealers could achieve a 20 percent increase in sales without fancy marketing programs or yet another new niche model. What would have to change? The way they think about their businesses.


Here's how to get started.

1. "Go spend a day in the trenches" selling cars. It will refresh you and give you a new perspective. OEMs, find one purchase you can consolidate and make centrally in order to deliver economies for your dealers; they'll love you for it.
   
   
2. Shove aside the mounds of market research. Create a single page that says who you are to your customers. List as many customer "touch points" as you can: Are you delivering your brand message at each one? If you're not, begin fixing that problem today.
   
   
3. Learn a lesson from successful non-car retailers that quantify the "tipping point" for a customer's purchase decision. For example, what drives increased conversion and greater-than planned spending? Then, find ways to enable and promote that desired behavior in your own sales cycle.
   
   
4. OEMs, take your next, new program - the one that's about ready to launch - and walk through it with a dealer, asking (and then really listening to the answer) whether it works. Make changes based on what the dealer tells you. Test it before you roll it out broadly.
   
   
5. Pick your top five metrics and ask yourself four questions about them. (If you can't answer a definitive "yes" to all four questions, it's time to change or scrap the metric.)
   
   

• Are these numbers credible and meaningful?
  
• Do these metrics really make any difference in behavior?
  
• Does their value outweigh the effort to generate them?
  
• Can the numbers distinguish great dealers from the rest -and make it clear why they're great?

As Steve Case says, "If you believe that some day 'it' will happen, some day it probably will. You just have to make sure you're there when it's happening, and ideally you're at the front of the parade, and the principle beneficiary of when it happens, but that's not the kind of thing where you just sort of sit back and wait."

MEXICO'S WEEKLY HEADLINES