Funders wishing to deploy a dealer self-auditing program should do so with the knowledge that there are substantial benefits to be gained by their dealer group partners, as well as by their own organisations.
However, change will always bring objections, no matter how unfounded or trivial, and it is incumbent on the funder to overcome these and take their dealers on the digital audit journey with them.
While there is no single, fixed approach that will guarantee a successful implementation, there are learnings, gained from experience, that should be carefully considered to make get the best from the process.
Recognising different funder-dealer relationships
It’s tempting to generalise about best-practice in dealer self-auditing roll-outs and, while many of the most successful approaches can work in any context, it is important to recognise that there are different types of relationships between funders and dealers that can have an impact.
Perhaps the most obvious is the level of influence that the funder can exert over its dealer network; manufacturer captives having significantly greater sway than independents or, in particular, challenger banks looking to gain traction in a particular market.
While coercion is never a good strategy for building genuine support for change, it’s clear that the sway held by the likes of a captive funder does open up alternative methodologies to help to embed them.
Buy-in at senior and operational levels
Regardless of the approach taken, banks must always ensure as much dealership buy-in as possible at each stage of the implementation process; when technology initiatives fail, it is usually because of attitudes to the change rather than the technology itself.
The most important buy-in is at the most senior level in the dealer group; without the support and authority of the leadership team, change of any sort is unlikely to be fully embraced and the resources and skills required will not be made readily available.
Those directly involved in establishing and using the dealer self-audit must also be a key focus. An important aspect of this is ensuring that individual KPIs and performance-related remuneration are aligned with the successful roll-out of the system. While this may be out of the direct control of the funder, coaching and support in this area can pay dividends.
It’s also a fact that most funders will know whom to expect objections or blocking tactics from before deployment is even announced. It is important to try to work with these individuals, bringing them into the process as early as possible, as, in many cases, they can become the strongest advocates if they know that their views are being heard and addressed.
Overcoming key challenges and objections
Some of the most common objections raised to dealer self-auditing come from the (incorrect) assumption that the self-audit will be the same as an external audit, simply with the onus placed on the dealer to complete them rather than the funder.
The objections include:
- No physical capacity to conduct audits
- Lack of the correct skill sets to conduct audits
- Push-back to the funder that it is their role to conduct audits and no advantage is gained by the dealer
Where a digital audit solution is being implemented, these objections have no grounds in the reality of what a dealer will actually experience.
A great way to overcome these barriers is to facilitate a mini-audit by the dealer of a very small number of vehicles for them to see the process for themselves and be given an opportunity to deliver feedback.
Where the units being audited are actually on-site, it can take less than 15 seconds to complete each vehicle – a typical 50-unit site audit can easily be completed in less than 30 minutes. In addition, the skills required to undertake the audit are minimal, meaning the task can be delegated to almost any staff member.
While funders that continue to charge for audits that are now conducted by the dealer do find it harder to exempt themselves from their responsibilities for the process, this can be overcome, to some extent, with the significant benefits that the dealer group will derive. More on this later.
Centralised and consistent communication
Communication plays a key role in the implantation of a successful dealer self-auditing process, regardless of the funder type. Once the deployment has been introduced, regular communication must be provided, with a consistent and clear message about the benefits and the process.
Failure to provide this leads to assumptions and rumours filling the void and this can have seriously detrimental effects on an otherwise well-planned roll-out. Experience suggests that the best source for the initial communications is the Head of Credit at the funder – this provides weight to the message and demonstrates a senior commitment to the project.
While this channel will remain important throughout the change process, other channels will also need to be employed to provide more granular information and the implications for specific dealer groups. Perhaps the most critical of these will be the teams with day-to-day responsibility for managing dealer relationships.
Importance of area / regional management teams
These individuals own the relationships with key dealer stakeholders and should be heavily involved in the communication and onboarding process. One highly successful tactic with these teams is to provide them with training in the new audit system and ask them to conduct a sample audit. This enables them to experience exactly what the dealers will experience when deployment commences. Likely objections, and how to overcome them, can then be discussed as a group before implementation begins.
These teams should also lead the communication and onboarding process for each of their dealer groups, providing continuity and taking advantage of their unique understanding of the business context faced by each organisation. This activity could include:
- Coordinating dealers’ first self-audits with visits by the area manager to observe and assist.
- Emphasising the area manager as the key contact point for queries and feedback on the process.
- Channelling follow-up communications for overdue audits through the area manager so that additional assistance can be provided where necessary.
- If required, area managers can undertake the first audit on behalf of the dealer (with the caveat that the dealer be present throughout) to demonstrate the simplicity of the process.
Use of dealer forums or councils
While dealer councils are more commonly used by captive funders, others do create similar forums for the discussion of new initiatives and the resolution of issues. If the funder does have such a facility, these can be invaluable in the early stages of dealer self-audit communication and deployment.
One particularly useful tool that can be employed is to secure volunteers from the group to act as preliminary testers of the new system. Issues and objections raised by these dealers can then be addressed within the forum and communicated to the broader dealer network.
Simplify new dealer sign-ups and update existing dealer agreements
Where a funder is committed to deploying dealer self-auditing across its dealer network, any new clients must be onboarded to the system as an integral part of the sign-up process. This means clear communication that the dealer self-audit is a key tool for sharing information between the parties, and provision in the terms and conditions of the contract that credit will only be provided to those accepting its use.
The dealer self-auditing system provider should help to make this as seamless as possible by automatically generating a new audit account as part of the credit onboarding process. They should also provide clear welcome and instructional communications to the dealer along with log-in details to complete the first audit.
For existing dealers, contract amendments can also play an important role – formalising the requirement that information be provided via the deal self-audit, honestly and in good faith, and restricting credit to those who refuse to sign updated contracts, can help to cement the importance of the deployment in the minds of dealers.
Highlighting the benefits to the dealer group
Be they captives or independents, and for new or existing clients, it would be remiss of funders to fail to point out the very substantial benefits of the self-audit to their dealers. These include:
- Audits can be carried out at a time that suits them rather than the timetable of an external auditor
- Audits will take far less time than a manual external audit
- There is no disruption to business caused by the presence of external auditors
- Internal inventory audits can be carried out with funder audits, simultaneously
- Access to additional credit is often the outcome of increased audit frequency and demonstrable good stock management
- Audits act as an external validator of the dealer’s processes and will highlight any operational issues
- Feedback following a dealer self-audit is instant, unlike external manual audits
Expect support from your chosen audit partner
Funders do not enter the process of deploying a digital dealer self-audit alone, they should be given dedicated support at every step by their chosen software partner. It goes without saying that this should include assisting with dealer communications and education, being part of the feedback loop and issue-resolution process and providing technical support at enterprise and individual dealer level.
What is even more critical is that the solution provider guarantees satisfaction with the deployment and plays an integral role in ensuring that the funder fully achieves the business benefits that they expect from the process.
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