24 May 2021

Evolution is the gradual development of something, often a slow process especially for us humans. However, every now and again there is a catalyst that forces an evolutionary jump. Like a thumping great global pandemic,

Huge amounts of progress in a much shorter timescale than normal, and the simple output of all this noise and change is change itself. How we adapt and change to our new normal falls into three distinct categories. Some will survive, some will thrive and some, unable or unwilling to adapt, will simply die away.

It’s the same in automotive, anyone else remember the launch of unleaded petrol in 1986? Some said there was nothing wrong with a bit of lead, never did them any harm etc., but change happened and now it is the de facto fuel standard for combustion engines. Maybe it is notable that during this change some large forecourt fuel businesses saw unleaded as a gimmick fuel, a novelty, and that after a bit it would simply fade away. Try getting a gallon of 4 star or LRP now, or indeed try getting a ‘gallon’ of anything.

We all work in an industry that has evolution at its heart, we know change and progress is inevitable, and we as individuals, business owners, stakeholders and employees all have a part to play in embracing that change in order that we can slot gently into the ‘survive’ bracket, or better still the ‘thrive’ bracket. No one wants to be the dinosaur.

Notable regulatory changes

I mentioned a catalyst that forces an evolutionary jump, and the last 12-months-plus has been exactly that, challenging and difficult to navigate of course, but for those willing to learn adapt and evolve it has meant opportunity for survival or success in equal measure.

During this difficult time, we have also seen some regulatory changes regarding the sale of motor finance and the FCA’s snappily entitled CP19-28. This was the followed then by the scintillating and effervescent follow up of PS20-8 relating to motor finance discretionary commission models and consumer credit disclosure of commissions – perhaps not easy to get your head around initially, especially with the noise of others all saying it will simply fade away like unleaded fuel did 35 years ago.

These changes are good for our industry and the way our products, services and processes are viewed by our customers. Customers simply want transparency in the buying process which the FCA has recognised and is exactly what they are asking us to modify with these regulatory instructions.

But the noise of others has also been loud, the doom-mongers and naysayers are out in force yet again, eroding the credibility of our professionalism and ability to adapt and then eroding the confidence our sales teams have in our asset finance products, so let’s just look at the clues for a minute.

Some automotive retailers have decided that they will generally not offer motor finance products directly at all. These colleagues have made the decision not to learn a new way, and like our friends the dinosaurs run the risk of simply fading away through lost opportunities and a loss of deal control.

Some retailers have decided to offer motor finance, but only through a third-party unconnected broker. I’d challenge them to think about where their broker partner derives their income – that could have been their income stream but for the sake of some effort.

I’d also remind them of the double whammy of deal loss, that under data protection and GDPR rules they have potentially lost ongoing relationship access to the customer whilst still carrying the burden of merchantable quality and similar warranty issues. All of the pain, none of the profit. I’d propose this category is the ‘survive’ cohort.

But there is the ‘thrive’ cohort, and during this year I have seen these traditional retailers embrace new ways of doing business, adopting social media, recognising the power of digital and engaging with prospects and customers online via videocalls such as Zoom, Teams and more.

I’ve even seen cleaning evolve from a necessary and expensive chore to a proactive reason for marketing and sale, and I’d suggest that this is the critical bit of it all, to take what you have to do and turn it to your advantage, to spin it to suit your purposes and to turn our prospects into customers by doing what we have to do anyway but making it all feel very bespoke.

Tell your customers you have to do it anyway and it holds no value, tell them the value it represents to them and they will trust you for it, and it will build value. Be honest and open – but before you do, talk to your funding partners to make sure the right figures are used and the wrong ones avoided.

[YOUR ACTION PLAN]

• Look for the sales angle to every challenge
• Embrace the bespoke
• Talk to your funding partners
• Ensure that the right figures are presented