Following the launch of their flagship warranty scheme only one year ago this month, the WMS Group reflect on how despite the economy, the product has continued to boost revenue for dealerships, whilst helping the company to achieve a 30% growth in turnover and reach phenomenal milestones along the way.
The last few years in the used car industry have been tough for dealers to say the least. With footfall down, dealerships are turning their attention to giving their business a competitive advantage in order to attract customers, so with this in mind there has never been a better time to review their current warranty provider as the focus shifts to making the most of every profit opportunity.
In 2011, the introduction of the award-winning ‘Safe and Sound’ scheme (
) designed to install real peace of mind and value for buyers, changed the face of the used car sector and the network has continued to grow rapidly, with dealers recognising that it is bolstering their sales proposals and consumers acknowledging that they are making a sound investment when buying a used vehicle. Endorsed by motor racing legend Sir Stirling Moss OBE, the seven element scheme based on the company’s exceptional car warranty product, is today offered by a strong national network of dealerships that embrace the highest levels of customer care. The product which was developed to help dealers to attract and retain customers whilst adding tangible value to the buyer, actually became the brainchild of WMS Group business development director Eric Stone back in 2010.
Eric reports that the decision to create the scheme was heavily influenced by the company’s initial research into consumer buying behaviour. “There were recurrent concerns across the industry from buyers over the safety, value and provenance of their vehicles and consumer confidence was generally low, as there was little or no reassurance that they were buying from a reputable dealer or indeed making a wise investment. At that point it was a price war between dealers to entice buyers into their showrooms as the recession was hitting businesses hard, which certainly wasn’t helped by the lack of commercial opportunities available for dealers to protect and increase their profit margins,” he explains.
The introduction of the aptly entitled ‘Safe and Sound’scheme then ensued in early 2011, and was to include a wear-and-tear six month all mechanical and electrical warranty, sixty point vehicle inspection, six month comprehensive recovery package, provenance check, mileage verification, independent valuation and an exclusive dealer buy-back guarantee. Backed by a six figure investment, a national network of dedicated account managers, extensive marketing and public relation platforms, a plethora of point of sale materials and the WMS Group’s many years of experience in the warranty business, the scheme was first adopted by Harry Ross, Basingstoke; Newhall Cars, West Kirby; two Harratts dealers in Barnsley and Mertrux Cars, Derby, with many more to fly the ‘Safe and Sound’flags shortly afterwards.
With the scheme fully defined, the WMS Group were soon searching for a brand ambassador to endorse it. They wanted a figurehead in the motoring world who was well known but also most importantly encompassed their values of honesty and integrity. The obvious choice was to approach the iconic Sir Stirling Moss OBE, undoubtedly the greatest racing driver of all time and whose reputation precedes him.
Sir Stirling Moss
Eric talks about the decision to work with Sir Stirling Moss OBE: “Sir Stirling is respected worldwide not only for his racing career but for his trustworthy reputation. It was this that prompted us to contact him to personally endorse ‘Safe and Sound’as we wanted to work with someone who was instantly recognisable and credible. Most importantly we knew that Stirling would only agree to endorse those products that he has personally researched and believes in – he is not a man whose opinion is to be bought! We were therefore delighted when Sir Stirling agreed to work with us as he believed that we had a great product to offer the used car market.”
Sir Stirling Moss comments upon his endorsement: “I often get approached to put my name to products and services but when I was introduced to ‘Safe and Sound’I knew this was something that was valuable for the used car buyer and good for the motor industry. We all know buying a car is a big decision and this product brings with it peace of mind –removing those niggling doubts about safety, car history, real mileage and even if you’re paying a fair price. I am pleased to have my name associated with ‘Safe and Sound’; it’s a winning product for motorists in the UK and I feel confident that it will continue to be very successful.”
The WMS Group report that many dealers who have joined the ‘Safe and Sound’network within the twelve month timeframe are acknowledging that the package is perfect for giving them an alternative way to entice buyers into their showrooms, over and above entering a price war amidst these tough trading conditions. It has helped them to differentiate themselves from their competition, providing a compelling reason for customers to buy from their dealership whilst being able to deliver complete peace of mind. Lee Richards, Sales Manager of Mertrux Cars explains why his dealership chose to embrace the scheme: “As Mercedes-Benz Specialists, all our cars are premium quality and low mileage so it makes perfect sense to offer the ‘Safe and Sound’programme along with every car. It is a top quality package which reflects the quality of our marque and reaffirms to our customers the confidence we have in every car supplied by us”.
The WMS Group were delighted when the scheme was recognised last year, scooping a gong at the prestigious Car Dealer Power Awards for ‘Best Innovation’. ‘Safe and Sound’was voted for by car dealers who chose the scheme as the product that they thought had truly blown the competition away, having recognised the UK’s best dealerships whilst helping businesses to provide a truly exceptional service to their customers.
The Group add that much of the current success of ‘Safe and Sound’is fuelled by the addition of franchised dealers to the network, particularly in those businesses that are struggling with new car sales or wish to keep ‘non-home brand’models separate from their new cars, and those that are simply recognising the sales opportunities in ‘used other makes’. Initially designed around the independent dealerships, the company report that ‘Safe and Sound’ has since exceeded expectations having been adopted by Proton for their non-home brand stock to boost footfall, with many other manufacturers and large dealer groups acknowledging that it is comparable if not better than their approved used programme. Kings Chrysler of Teeside reinforce this, stating: “As a ‘Safe and Sound’ dealership, we find the warranty cover to be equivalent to that of the manufacturers’ warranties, and the prices are very competitive too.”
Standing out over the competition
One dealer who can demonstrate the benefits of the scheme to their business model is Luigi Motor Services of Stockport. Sales Manager Nick Raimo comments: “We had a customer who was looking to purchase a Porsche Boxster. He had thoroughly researched the market and viewed this model at several used car dealerships in the area. The customer bought the car from us because he was so impressed with the ‘Safe and Sound’warranty scheme, including the coverage of wear and tear items not normally covered by other warranties.”
The icing on the cake is that a fantastic incentive is currently being offered by the company, in order to help their network to attract buyers. When buying their next car from an approved dealer, the customer would be automatically entered into a draw to win back the car’s purchase price, right up to £15,000 and Sir Stirling will be randomly drawing the winner from the ‘Safe and Sound’ database in September 2012.
Eric Stone adds: “The right warranty protection is actually the best profit and retention tool available to dealers, and if presented to customers correctly, will help to increase margins substantially by ensuring that customers come back time and time again. Of all the products available to your customers, a warranty not only ticks the box for profit at the point of sale, but also bears a phenomenal amount of opportunities where additional profit can be made, including service work required to ensure the warranty remains valid; repair work carried out under the terms of the product; extension plans available to your customers and resolicitation when the policy is due to expire. If a customer buys more than once, they are your customer – but if they only buy once they are someone else’s prospect! We all want customers for life, and what other product will do all of this? What’s more, we also have some fantastic opportunities for buyers to receive up to 50% warranty cover free of charge when buying a longer term.”
Since the launch of the scheme, the WMS Group have gone on to roll out a range of pay-monthly rolling Guaranteed Asset Protection products across their entire dealer network, branded as ‘Safe and Sound’and again backed with the endorsement of Sir Stirling Moss to aid take-up. In only one year from a standing start, ‘Safe and Sound’now boasts a national network in excess of 70 dealers including many of the top 50 dealer groups, determined by their turnover. The company also report that 2011 also saw a staggering 30% growth in turnover compared to 2010, much of which they attribute to the development of the ‘Safe and Sound’network.
It is clear that during these tough times, dealerships need to address the importance of going above and beyond the customer’s expectations, not only to generate new and repeat business but also to ensure that they make the most of every profit opportunity. Despite the economy, the WMS Group conclude that they have dealers achieving a 100% product penetration and a 60% uplift on warranty sales, and confirm that focusing on the customer care aspect of your dealership is a surefire way to guarantee a profitable business.