Competitive Advantage through Dealer Technology
Published in Credit & Car Finance, January 2004
With interest rates at their current low levels there is less opportunity for finance companies to discriminate their products through better rates and prices. Improved customer service via systems technology has now become the important driver for competitive advantage. As a consequence, many finance suppliers are modernising the technology made available to dealers by providing web based solutions.
The provision of smart point-of-sale (PoS) software is fast becoming a necessity for companies that wish to win new business or remain the primary finance provider at the dealership. Lenders that can provide access to a fast, flexible, customer-focused quotation system are more likely to be one step ahead.
The advantages of this approach for the finance house are clear: reduced administration and internal process efficiencies coupled with business intelligence and CRM facilitation. However the key question: “What’s in it for the dealers?”, still needs to be answered so that retailers can be encouraged by their finance providers to move away from existing manual processes and paper based systems.
Dealer Benefits
Put simply, the major dealer benefit from using web-based technology is improved customer service. Quality customer service, as far as the dealer is concerned, means being able to facilitate the vehicle sale using the most suitable finance option, with minimal disruption to the sales transaction itself. In real terms, this translates to the need for access to accurate information to evaluate the deal and determine credit worthiness, fast turnaround of credit applications, and the ability to sign the customer up at the dealership quickly and efficiently.
A web-based proposal system allows the dealer to capture the basic customer details, select the appropriate vehicle and model the payment profile to suit the customer’s specific financial requirements. A well designed system will present the dealer with all the information necessary to assess the customer and identify the profitability on the deal, whilst easing the customer through the transaction with relevant online content and visual aids.
Once the detail is agreed with the customer, the dealer must next obtain credit acceptance as quickly as possible. The use of automated credit scoring, which references internal and external credit history data made available to the finance company, facilitates hasty turnaround. The dealer is able to print an electronic copy of the agreement document, which the customer signs on the premises.
Fast payment of the financed amount to the dealer completes the process, but may not be enough to persuade a salesperson or administrator in a busy motor dealership to adopt this practice. One of the recurring objections focuses on the need to enter data more than once in related, yet unconnected systems.
Specialist motor finance providers are helping to solve the problem by integrating web-based proposal processing software with the dealer management system (DMS) to accept data to be included in proposals, removing the need for double entry. These organisations have drawn on their experience in the provision of wholesale finance to dealers, which has traditionally benefited from the use of web-based dealer interfaces and tight integration with DMS.
Enterprise-wide solutions
The end game for finance companies could be to offer an enterprise-wide solution, which provides seamless integration for all aspects of asset based lending, with a common user interface for internal staff, partners and customers. This can be achieved through the installation of a leading edge back-office system, with carefully chosen ‘touch points’ deployed to the dealer over the web, offering relevant customer service information and proposal processing capability. Alternatively, a stand-alone PoS may be deployed in order to provide a fresh look and feel to more traditional administration systems, eliminating the need for costly back-office replacement projects.
The shift from competing through better products and terms to improved customer service via web based technology, has presented an important opportunity to finance companies. Those who are able to grasp the challenge by delivering better service with proven dealer benefits, will be best placed to achieve competitive advantage, win and increase market share.
James Powell
Business Manager
Sword Apak
Published in Credit & Car Finance, January 2004 |