A4 PowerPoint Presentation

BUSINESS IMPROVEMENT PROJECT ANGELO NEFDT

INDENTIFYING THE PROBLEM

Identifying the Problem With approx 12 Nissan dealerships in the greater Cape Town area, our local Workshop & Parts Division loses a lot of Retail Customers who opt for using Dealerships closer to, and more convenient for them. As a result of this

•

Gross margins are shrinking in the competitive online market.

•

Gross margins are shrinking in the modern finance and insurance market.

Background & History

“Stop selling.

Start helping.”

Zig Ziglar

•

The automotive market has made a dramatic shift towards a buyers’ market.

•

Online third party Parts and Service websites allow customers to seek out discounts or waivers on registration fees.

•

1st and 2nd Gross margins are diminished, by offering incentive discounts such as onthe-road costs in order to retain the deal.

•

The Workshop and Parts Division are losing customers to Dealerships closer to, and more convenient for them.

•

A large percentage of customer use their banks to finance costs and as a source of value added products.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

Stakeholders currently impacted by the problem.

“Your attitude, not your aptitude, will determine your altitude.”

Zig Ziglar

STAKEHOLDER

HOW IT NEGATIVELY AFFECTS THEM

Salesman

The Salesman is impacted negatively by loss of income from lower profits.

The more discount we offer on cars, the less commission the Salesman earns.

Sales Manager

The Sales Manager is impacted by loss in profits because budgets rise, profits are shrinking and overall income is lower. Sales Managers have to replenish vehicle stocks to match higher budgets and higher income targets.

F&I (Finance and Insurance Manager)

The F&I Manager is losing income because of lower profits in 2nd gross and higher targets. F&I finds it more difficult to reach set 2nd gross targets.

Investors

The investors are losing on loss profit margins through discounting vehicles and on-the-road fees.

Workshop

The workshop struggles with dealership loyalty, as customers are driven by savings in their pocket. With more than 12 Nissan dealers in the Cape Town area, Customer’s tend to service their vehicles at Dealerships that are closest and most convenient for them.

Parts

The Parts Division struggles with customer retention - with even the most loyal customers purchasing parts at Dealership’s that are closest and most convenient for them.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

KEY OBJECTIVES OF THE IMPROVEMENT PROJECT

Key Objectives of the Project To introduce an attractive and effective customer loyalty program that will improve and retain customer loyalty through a rewards programme.

Points are redeemable on future transactions which include vehicle servicing or purchase of automobile parts at the local Dealership only.

For example:

“Most people think ‘selling’ is the same as ‘talking.’ But the most successful people know that listening is the most important part of their job.”

Don Cooper

•

Should a customer need replacement spare keys, they can redeem loyalty points as discount towards the purchase of that key.

•

Should the customer book a follow up service for replacement (wiper blades / brake pads) they can redeem their loyalty points to cover the cost for that service or items at the Workshop counter.

•

Points are awarded after each service and the customer benefits from the redemption of points for a number of future services - rather than benefiting from a once off discount - which incurs an immediate loss of profit for the Dealership at the point of sale.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

LOYALTY REWARD SCHEME

COST TO DEVELOP & IMPLEMENT LOYALTY REWARDS SCHEME

Cost of Developing and Implementing the proposed Customer Loyalty Reward Scheme

“I think we have to notice that the business processes we use right now for thinking and planning and budgeting and strategy are all delivered on very tight agendas..�

Margaret J. Wheatley

Capital Outlay

Consulting

Personnel

Hardware Acquisition | Software Installation | Staff Training

Marketing & Development Strategy | Developer Briefing

Staff Training Staff Salaries | Incentives

R23,100

R6,300

R50,150

Total Projected Costs

Capital Outlay | Project Consulting | Hardware Acquisition Software Installation | Staff Training

R79,550

*

Detailed Budget Projections are listed at the end of this document.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

PROJECTED IMPROVEMENT OUTCOMES

How will the Loyalty Rewards Scheme improve customer retention and profit saving?

“Your competition is everything else your prospect could conceivably spend their money on.”

Don Cooper

•

Customers may only redeem reward points at their local Dealership, so there is a significant chance of them returning to gain reward points and to conveniently redeem them against future vehicle repairs, full service, or even a new car purchase!

•

The New- and Used Car Divisions will award loyalty points depending on the terms and conditions of the sale and how it was structured.

•

Instead of offering an initial R5000 discount to close the sale, the customer benefits from R2500 worth of loyalty points redeemable at our Workshop and Parts Divisions in future.

•

This will increase future revenue and business retention for both our Parts and Workshop Divisions and could potentially lead to longterm service relationships with customers

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Every product or service purchased earns the customer loyalty points. These points can be redeemed in various ways, according to the plan agreed by dealership management.

•

Points are automatically awarded, tabulated and sent to the qualifying customers by text or email.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

How will the Customer Loyalty Programme address the problem?

• Customer loyalty programs are crucial in the retail industry.

Its main purpose is to make more money by keeping your current customers. This can be achieved because they’re cost-effective, and they help to increase word-of-mouth and customer referrals.

• Studies show that 69% of customers allow the presence of rewards or loyalty programs to influence their shopping decisions.* With more than half of consumers looking for rewards, most companies cannot afford not to have a program that offers benefits for customer loyalty.

• Repeat business from loyal customers can prove to be more valuable than gaining new customers.

• Failure to have an attractive loyalty program could result in the loss of a Dealership’s most loyal customers.

• “Sales are contingent on the attitude of the salesman, not the attitude of the prospect.”

W. Clement Stone

Loyalty Programs offer incentives (over convenience) for customers, and increases the chance of regular, return business for Retailers. Many large retailers (Woolworths, Checkers and Pick’nPay) have tried and tested loyalty programs which have formed part of their successful business model for decades. * www.annexcloud.com/blog/10-statistics-prove-effectiveness-loyalty-programs/ BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

HOW A CUSTOMER LOYALTY PROGRAMME WILL IMPROVE OUTCOMES FOR STAKEHOLDERS

How a Loyalty Rewards Programme will positively affect or impact stakeholders.

“Your competition is everything else your prospect could conceivably spend their money on.”

Don Cooper

STAKEHOLDERS

HOW OUTCOMES WILL POSITIVELY IMPACT STAKEHOLDERS

WORKSHOP

The Loyalty Rewards Program will benefit workshops by increasing customer retention. Additional incentives are available for businesses who maintain their company cars through our Dealership through priority appointments with the Service Division.

PARTS

Parts Division can benefit by the increased retention from workshop customers and also by customers redeeming points for parts such as batteries, spare keys and other over-the-counter spare parts.

NEW CAR SALES

The loyalty scheme needn’t be limited to individual customers but can also be offered to businesses who buy company cars through our dealership. The scheme also provides Dealerships with key customer data, in order to target our marketing campaigns more effectively.

USED CARS

Used Car Division benefits from return business as customers redeem point against the purchase of their next family vehicle, instead of requesting additional discount or discount for on-the-road costs.

SUPPLIERS

Our Suppliers will benefit, improving relationships between our dealership and supplier and being able to negotiate increased discounts from future Suppliers.

SALES PEOPLE

Sales people benefit because customers stay in touch and salesman / customer relationships grow stronger.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

DETAILED BUDGET BREAKDOWN

PROJECT PLANNER SUMMARY

ACTIVITIES AND TASKS

RESOURCES

WORK BREAKDOWN STRUCTURE

HUMAN RESOURCES

PHYSICAL RESOURCES

Needs Analysis Identify suppliers in the retail loyalty program/card industry.

Project Manager

Laptop/notepad

Team meeting/discuss business improvement plan and implement change management strategy (Vuca Model)

Project Manager / Sales Team

Consultation with various service providers

BUDGET /COST CAPITAL

CONSULTING

PERSONNEL

0

0

400

Laptop/printed notes/meeting room, Projector

0,00

0,00

1 800,00

Systems Advisor, Loyalty Systems Advisor

Laptop, email, telephone

0,00

2 400,00

400,00

Identify new options and best practice from other dealerships using the loyalty programs

Systems Advisor

Laptop/telephone

0,00

0,00

400,00

Conduct more research on loyalty programs www. customerconnectland.com) and wwwautoconversations. net)

Project Manager

Laptop, meeting room

0,00

0,00

400,00

Meeting with FM to discuss cost admin, discuss SMART goals , admin integration and funds channeling options to various departments.

Project Manager, Finance Manager

Laptop, meeting room, notes from supplier

0,00

0,00

400,00

Discuss Installation, software, CRM solutions and obtain quotes from supplier MigrandCard CC

Systems Advisor

Computer/ Telephone/meeting room

0,00

0,00

400,00

Follow up meeting with sales team and general feedback session/set change management goals.

Project Manager / Sales Team

Meeting room, Laptop, Projector

0,00

0,00

1 800,00

Stakeholder meeting with Dealership Management team, discuss business improvement plan/objective,best practice and way forward.

Project Manager, Dealer Management Team, Systems Advisor

Meeting room, laptop,Projector

800,00

0,00

2 750,00

Conduct customer study to Identify retention opportunity, frequency and lift opportunities

Project Manager, Senior Sales Executive, Stock Controller, Costing clerk, Parts Manager

Meeting room, laptop, Sales reports

0,00

0,00

800,00

Conduct customer experience/satisfaction study

Project Manager, Senior Sales Executive

Meeting room, laptop, CSI reports

0,00

0,00

750,00

Conduct customer spend meeting with parts and service

Project Manager, Parts Manager, Service Manager

Meeting room, projector, laptop, notes from stakeholders

0,00

0,00

600,00

Service Provider and IT related services Follow up meeting with service provider , discussing software / hardware installation process and integration strategy with CRM support and service provider

Project Manager, Service Provider, CRM Support

Laptop/meeting room and telephone

0,00

0,00

400,00

Training, implementation strategy and product related needs analysis

Project manager, Service provider

Boardroom, laptop, projector

400,00

650,00

400,00

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

PROJECT PLANNER SUMMARY

ACTIVITIES AND TASKS

RESOURCES

BUDGET /COST

WORK BREAKDOWN STRUCTURE

HUMAN RESOURCES

PHYSICAL RESOURCES

CAPITAL

CONSULTING

PERSONNEL

Software and hardware implementation cost and strategy meeting and product roll out strategy meeting with IT

Project Manager, Group Marketing Manager, CRM Support, Service Provider and IT team, Senior sales exec

Boardroom, projector, laptop, notes

10 500,00

850,00

4 000,00

Identify product support specialist or loyalty program manager assistance strategy

Project manager, service provider

Laptop, teleconference

0,00

0,00

12500/PM

Software installation,billing and reporting management implementation strategy setting

Project manager, FM, Service Provider

Meeting room, laptop projector

0,00

Product implementation, testing and training, loading of software and system integration in various departments

Project manager, IT and service provider

Various department workstations, IT systems, network, laptops

800,00

0,00

2 750,00

Software and hardware configuration of POS and other billing systems

Service Provider and IT services

Laptop, various workstations, computers

800,00

1 200,00

2 750,00

Roll out testing phase and POS (point of sale testing) billing management testing

Project Manager, IT and service provider

Computers, POS systems, IT and network

800,00

0,00

2 750,00

Implement training and support services, set up Q&A protocols are in place. Set dates for live implementation.

Provide user support initiatives.

Project manager, IT support, Service provider, Sales team, Parts team, service advisors, costing clerks, cashiers

Computers, POS systems, meeting room, pens, notes, network.

0,00

0,00

6 000,00

Implement and testing of loyalty data management (for use of mailing and communication systems to customer e.g. sms and email notifications)

Project Manager, IT Team and service provider

Laptops, meeting room,various workstations, notes

2 400,00

0,00

2 500,00

Discuss record keeping and system maintenance initiatives, loyalty hosting,

Project Manager and Service provider, Admin team, costing clerks

Boardroom, projector, laptop, project notes.

800,00

0,00

400,00

Project and User support initiative set layout for dealing with possible errors and system “teething problems that might occur set live date

CRM support, Project Manager, IT, Marketing Manager, Stake holders, Sales Teams, Admin staff, cashiers

Boardroom,laptop, projector, project notes, training notes

0,00

0,00

1 200,00

Set up loyalty point benefit (Points for Rand Value)and rule structure with various departments heads New cars benefit discussion session + Q& A (questions and answers) 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Project manager, New cars sales, service provider, Entire new sales team, admin

Boardroom,laptop, projector,project notes, training notes, case study material

800,00

0,00

1 800,00

Used Cars benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Project manager, service provider, and entire used sales team

Boardroom,laptop, projector, project notes and case study material

800,00

0,00

800,00

Workshop benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Project manager, workshop manager, service advisors, costing clerk

Boardroom,laptop, projector,project notes and case study material

800,00

0,00

800,00

3 000,00

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

PROJECT PLANNER SUMMARY ACTIVITIES AND TASKS

RESOURCES

WORK BREAKDOWN STRUCTURE

HUMAN RESOURCES

PHYSICAL RESOURCES

Parts benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Parts manager, Project manager, parts cashiers, parts sale staff

F& I benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM (Used) and 12h30 PM to 14h00 PM (New Cars) x 2

BUDGET /COST CAPITAL

CONSULTING

PERSONNEL

Boardroom, laptop, projector, project notes and case study material

800,00

0,00

800,00

Project manager, New Car manager, F & I manager, used car sales and new car sales teams

Boardroom,laptop, projector, project notes and case study material

800,00

0,00

800,00

Testing of reporting ,billing, magstripe readers and POS receipting systems, Redemption software

Project manager, IT services and service provider, Cashiers, Costing clerks, Debtors clerks

Various point of sale stations, computers, POS hardware

1 800,00

1 200,00

4 500,00

Live dates set for various departments

Project manager Service Provider, Wynand Mans

None

0,00

0,00

0,00

Feedback sessions/ New ,Used and F& I

Project manager, Service Provider, New Car Manager, Danie Groenwald

Meeting room, laptop projector

0,00

0,00

1 800,00

Feedback sessions, Workshop and Parts

Project Manager, Workshop manager, Parts Manager, Service Provider, Costing and Cashiers

Meeting room, projector and laptop

0

0

1800

R23,100.00

R6,300.00

R50,150.00

GRAND TOTAL

R79 550,00

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

PROJECT PLANNER COSTINGS PLANNER COSTING

Capital charges is set for hardware, software, utilities and meeting refreshment cost

PROJECT MANAGER : ANGELO NELFT PROJECT : MOTUS NISSAN PAROW LOYALTY PROGRAM

Consulting cost rate is set by the service provider

WORK BREAKDOWN STRUCTURE

PLANNER COST COMMENTS

Needs Analysis Identify suppliers in the retail loyalty program/card industry.

Employee hour rate charge (FIXED)

Team meeting/discuss business improvement plan and implement change management strategy (Vuca Model)

Personnel cost is calculated on basic (Fixed) hourly rate of dealership employees CAPITAL

CONSULTING

PERSONNEL

0

0

400

Employee hour rate charge

0,00

0,00

1 800,00

Consultation with various service providers

Service provider consulting fee employee hourly rate

0,00

2 400,00

400,00

Identify new options and best practice from other dealerships using the loyalty programs

Charged based on hour rate

0,00

0,00

400,00

Conduct more research on loyalty programs www.customerconnectland.com) and wwwautoconversations.net)

Employee hour rate charge

0,00

0,00

400,00

Meeting with FM to discuss cost admin, discuss SMART goals, admin integration and funds channeling options to various departments.

Employee hour rate charge

0,00

0,00

400,00

Discuss Installation, software, CRM solutions and obtain quotes from supplier MigrandCard CC

Employee hour rate charge

0,00

0,00

400,00

Follow up meeting with sales team and general feedback session/set change management goals.

Employee hour rate charge

0,00

0,00

1 800,00

Stakeholder meeting with Dealership Management team, discuss business improvement plan/objective,best practice and way forward.

Meeting refreshments and employee hour rate charge

800,00

0,00

2 750,00

Conduct customer study to Identify retention opportunity , frequency and lift opportunities

Charged based on hour rate

0,00

0,00

800,00

Conduct customer experience/satisfaction study

Charged based on hour rate

0,00

0,00

750,00

Conduct customer spend meeting with parts and service

Employee hour rate charge

0,00

0,00

600,00

Service Provider and IT related services Follow up meeting with service provider , discussing software /hardware installation process and integration strategy with CRM support and service provider

Employee hour rate charge

0,00

0,00

400,00

400,00

650,00

400,00

Training, implementation strategy and product related needs analysis

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

PROJECT PLANNER COSTINGS PLANNER COSTING

Capital charges is set for hardware, software, utilities and meeting refreshment cost

PROJECT MANAGER : ANGELO NELFT PROJECT : MOTUS NISSAN PAROW LOYALTY PROGRAM

Consulting cost rate is set by the service provider

WORK BREAKDOWN STRUCTURE

PLANNER COST COMMENTS

CAPITAL

CONSULTING

PERSONNEL

Software and hardware implementation cost and strategy meeting and product roll out strategy meeting with IT

Software and hardware cost/SP consult fee/employee hour rate charge

10 500,00

850,00

4 000,00

Identify product support specialist or loyalty program manager assistance strategy

This fee will be established when project is in full swing and service might be provided by the product suppliers

0,00

0,00

12500/PM

Software installation,billing and reporting management implementation strategy setting

Employee hour rate charge

0,00

Product implementation, testing and training, loading of software and system integration in various departments

Utility cost and employee hour rate charge

800,00

0,00

2 750,00

Software and hardware configuration of POS and other billing systems

Utility cost/SP consult fee/ employee hour rate

800,00

1 200,00

2 750,00

Roll out testing phase and POS (point of sale testing) billing management testing

Charge based on hour rate

800,00

0,00

2 750,00

Implement training and support services , set up Q&A protocols are in place. Set dates for live implementation. Provide user support initiatives.

Meeting refreshments and employee hourly rate charge

0,00

0,00

6 000,00

Implement and testing of loyalty data management (for use of mailing and communication systems to customer e.g. sms and email notifications)

Utility/hardware/ and employee hour rate charge

2 400,00

0,00

2 500,00

Discuss record keeping and system maintenance initiatives, loyalty hosting,

Meeting refreshments/employee hour rate

800,00

0,00

400,00

Project and User support initiative set layout for dealing with possible errors and system "teething problems that might occur set live date

Meeting refreshments/employee hour rate

0,00

0,00

1 200,00

Set up loyalty point benefit (Points for Rand Value)and rule structure with various departments heads New cars benefit discussion session + Q& A (questions and answers) 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Meeting refreshments/employee hour rate

800,00

0,00

1 800,00

Used Cars benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Meeting refreshments/employee hour rate

800,00

0,00

800,00

Workshop benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Meeting refreshments/employee hour rate

800,00

0,00

800,00

Personnel cost is calculated on basic (Fixed) hourly rate of dealership employees

3 000,00

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

PROJECT PLANNER COSTINGS PLANNER COSTING

Capital charges is set for hardware, software, utilities and meeting refreshment cost

PROJECT MANAGER : ANGELO NELFT PROJECT : MOTUS NISSAN PAROW LOYALTY PROGRAM

Consulting cost rate is set by the service provider

WORK BREAKDOWN STRUCTURE

PLANNER COST COMMENTS

Workshop benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Personnel cost is calculated on basic (Fixed) hourly rate of dealership employees CAPITAL

CONSULTING

PERSONNEL

Meeting refreshments/employee hour rate

800,00

0,00

800,00

Parts benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM and 12h30 PM to 14h00 PM

Meeting refreshments/employee hour rate

800,00

0,00

800,00

F& I benefit discussion session + Q& A 2 sessions 09h00 to 11h00 AM (Used) and 12h30 PM to 14h00 PM (New Cars) x 2

Meeting refreshments/employee hour rate

800,00

0,00

800,00

Testing of reporting ,billing, magstripe readers and POS receipting systems,Redemption software

Utility cost/SP consult fee/ employee hour rate

1 800,00

1 200,00

4 500,00

Live dates set for various departments

0,00

0,00

0,00

Feedback sessions/ New ,Used and F& I

0,00

0,00

1 800,00

Feedback sessions , Workshop and Parts

0

0

1800

R23,100.00

R6,300.00

R50,150.00

GRAND TOTAL

R79,550.00

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

SIX KEY REASONS TO IMPLEMENT THE CUSTOMER LOYALTY PROGRAM

Six key reasons why the dealership should implement a customer loyalty program •

Increase Revenue: Increased customer retention helps boost profits because loyal customers already trust and rely on your brand.

•

Save money: While creating and implementing a loyalty program is an investment, customer retention strategies are often less expensive when attracting new customers which can be 25% more expensive than retaining current customers.

•

Make consumers feel valued and appreciated: Customers are inclined to feel an emotional connection with your brand when you implement and incorporate ‘surprise & delight’ rewards for special occasions such as a customer’s birthday.

•

Measure loyalty through engagement: Track and monitor customer engagement and buying behavior to measure program efficiency. Measure important retention metrics like program engagement, repeat customer rate, and purchase frequency.

• Attract new customers: By offering points or discounts for signup, you automatically

“Take care of your car in the garage, and the car will take care of you on the road.” ― Amit Kalantri, Wealth of Words

add new customers to your mailing list. If customers learn that the customer loyalty programme offers rewards that are easily accessible, worthwhile and attainable, they are more likely to try your brand.

•

Increase sales: By personalizing the consumer shopping experience through gathered data, you can improve suggestions to customers and increase the likelihood of more sales.

While loyalty programs do take a bit of work and planning, they are certainly worth implementing and will help ensure future business success.

BUSINESS IMPROVEMENT PROGRAMME | ANGELO NELFDT

FOR MORE INFORMATION EMAIL ANGELO ON ANGELO@HPIAUTO.CO.ZA OR CALL 076 804 7157