Definitions

Some definitions first:

  • When I say OEM, I mean the factory, or mothership.
  • The NSC equals the ‘national sales company’ in a market.
  • And the context is that in most cases, the OEM is driving global strategy, with the NSC being responsible for roll out in their market.

So, what is the agency model?

Here’s a precis from the European Commission definition:

“An agent is a legal or physical person entrusted with the power to negotiate and/or conclude contract on behalf of another person (the principal)…”

The agent is the retailer, the principle the OEM.

What does this mean in practice?

The Key Sifts

For the OEM:

  • They move from a Business 2 Business Franchisor, where they speak to customers by exception…
  • To a Business 2 Consumer digital retailer with a national price.

For the Finance Provider:

  • They move from being a support to the OEM and Retailers…
  • To being an integral part of a new digital retail process.

For the Retailer:

  • They move from a franchisee with an agreement to buy cars…
  • To an Agent with an agreement to sell them.
  • They move from a ‘dealer’ to a ‘brand advocate’.

For the Customer:

  • They move from a relationship with the retailer…
  • To a sales contract with the OEM.
  • They move from ‘haggle’ to ‘no haggle’.

Change Management

The shifts above represent the high level. The programme of change requires, as a minimum, the following elements, supported by a shift in culture.

Topics in a Direct Sales Programme supported by Cultural Change

Culture Change

Let’s say the change programme is set up – how does the NSC change. Think about the moves ‘from’ and ‘to’ in terms of the cultural shift the organisation is making.

  • Wholesaler to retail
  • Demand creator – filling the gap left by retailers
  • Lead convertor – if the dealers switch off
  • Stock buyer – now an OEM job
  • Dynamic pricer – but based on proper data
  • Could be a used car buyer – if the model includes part ex
  • Could be selling additional products such as accessories and GAP insurance

What does it mean to you?

To find out more, click here.