Dealing with mystery shoppers

Mystery shoppers may highlight an area of concern but they do help dealers get the best for their own business too.

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For franchised dealers, managing the dealer network and maintaining standards is essential. And in order to do this, various processes are put in place to ensure that those parameters are met, with the OEM franchise ultimately at risk through repeated failure.

One way this is monitored is by mystery shopping, which you may know is commonplace in day-to-day retail, but it exists in car dealerships, too.

Every mainstream franchise has a set of standards by which their dealers must adhere, and on which they are measured as much as they are on sales performance.

They’d often lead the customer into a finance deal that was, in fairness, the right one for them, but they’d forget the upsell.

As a result, every day, car manufacturers send mystery shopping agents around their dealerships asking for them to check that certain core standards are being met – and often it’s a lack of training for dealership staff that can lead to problems.

Marketing Consultant Rebecca Lawman spent a decade working in senior management marketing roles for General Motors, and she used mystery shopping to identify and understand which dealers were doing things as expected and which needed training support.

“I’ve worked on the dealership floor as a sales manager,” she said. “So I do understand and empathise with sales staff, who have targets to meet and volumes to achieve. Sometimes, they’ll do whatever they deem is necessary to secure a sale. So the idea of mystery shopping was not to try and catch them out – far from it.

“A sale is as important to the brand as it is to the dealer, so while we’d encourage our dealership staff to work as hard as they could to realise the deal, we also needed to monitor the fact they were staying within the accepted boundaries.”

In recent times, this has become even more important with the Financial Conduct Authority (FCA) sending out its own mystery shoppers to ensure that all staff understand the rules and customers aren’t being mis-sold or misrepresented finance packages.

Paul Guy, a director of Automotive Compliance Ltd, which helps dealers understand the ramifications of getting it wrong, said: “In previous mystery shop exercises, the FCA has reviewed whether the advisers give customers correct and up to date documents and also assessed whether the contents of conversations were clear, fair and not misleading.

“The concern for dealers would be that should the mystery shop highlight an area of concern in one particular area, the FCA is then duty bound to act upon this and review the rest of their operation.”

An FCA review is obviously not good news for a dealership, but a main dealer franchise review is a concern too – and while the most important element of both is to stay on the right side of the law, for the main dealers there are also other considerations.

“We used to zero in on a couple of things that dealers missed out on,” said Rebecca Lawman. “They’d often lead the customer into a finance deal that was, in fairness, the right one for them, but they’d forget the upsell. Accessories, paint protection, service plans, all of which were essential to customer retention and dealership profitability.

Paint protection and accessories in particular were of benefit to them more than the manufacturer, as the margin structure favoured the sales agent. Dealers need to be aware that mystery shoppers are not necessarily there to ‘police’ them, but to help them get the best for their own business as well.”

 

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