DEALERS have to act now and ensure new requirements are integrated into their processes and procedures.
This is the first of my columns in Car Dealer magazine and I would like to welcome you to it. Over the coming months I will look at issues that impact on the performance and profitability of motor dealers — especially from a finance and insurance perspective.
With the future of the industry about to undergo significant change (for instance, with the introduction of the Financial Conduct Authority), I believe stimulation of debate in this area can only be positive.
One thing is for sure: the burying of heads in the sand is not an option — at some stage engagement WILL be required!
Let’s look at how change is welcomed within dealerships. I think it’s fair to say that in many cases change is not welcome — there are many people within the industry that have made a very good living and enjoyed successful careers out of doing things in their own unchanging way.
So when a change, such as new F&I regulation, comes along, many people will try to avoid it and see if there are ‘ways around’ the new regime.
I’ve had considerable experience in this area — in a previous role I worked with the introduction of FSA regulation of insurance products and I lost count of the number of phone calls that I received where dealers wanted to let me know that they were confident that they had ‘found a loophole’ in the new regulations.
Of course, there were no such loopholes. However, this illustrates an important point — that there was a substantial amount of time and energy being put into trying to find ways to circumvent new mandatory rules.
Surely this energy and time could have been better utilised in embracing the new regime and just getting on with things?
Also, some dealerships struggle with embedding the required change into their businesses. There can be political issues and resistance to change within the organisation. The hard fact is that change within the industry is inevitable.
Sometimes it will be forced on us by regulation or the requirements of our business partners and, in some cases, it is the best thing for a company to do.
I strongly recommend that when change is required you grab it with both hands and integrate it into your processes and procedures — don’t think it will all go away.
There are benefits in doing this. You could steal a march on competitors who may decide to wait until the last minute and then rush into a solution, and you can also spend time putting together a good-news message to your customers that you have acknowledged the new rules and are on top of things.
It also means that you have a proven template for managing change in the future. It might be worth taking a look at your own business — is it in good shape to embrace essential industry change?
If not, then maybe it’s worth considering how things can be improved.
