Mike Britton of Barclays Partner Finance explains how customers with a ‘beer wallet’ can still afford a taste for champagne
With a full month of sales already concluded for 2013, it is true to say that many dealers have a divergent view on how this year has started.
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A consistent point is that planning and preparation for the correct marketing strategy is vital. Offering something to maintain strong customer retention while bringing in new customers is key to a successful year.
Barclays Partner Finance is a point of sale finance provider with a selection of innovative products. Our mission is to help our dealer partners make the desirable accessible. So how do we do this? Well, as a market-leading brand we deliver industry-leading service levels and promotional credit offerings to drive customers into your showroom. We assist businesses from showroom to aftersales by embracing new ideas. And, backed up by Barclays Bank and Barclaycard with access to a range of outstanding Global Business Solutions, we can help you deliver the aspirations of your business too.
There has been much discussion over recent months about where the actual entry point to the marketplace now is these days when a consumer is purchasing a new vehicle. The days of visiting numerous showrooms before making a decision no longer exist – few customers visit more than a few. In fact, surveys indicate that the average number of visits is now well below two. As the internet provides customers with access to a dealer’s stock and car prices, dealers’ pricing strategies have become more aggressive. And customers are far better informed about not only car prices but available finance offerings; the FLA website, Financing Your Car, received well over half a million hits in January.
These indicators suggest that if you’re not converting at least half your enquiries, you’re losing your market share. Customers are coming prepared and ready to make a purchase, and by getting it right you can encourage referral business via the digital environment.
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By GlobalDataCustomers have always been at the heart of all our businesses, but with increased regulation and the digital age it is even more important to ensure they’re given not only the very best guidance but the very best experience when they visit your dealership.
The Barclays Partner Finance portfolio of products can assist in driving showroom traffic through advertising. Our product portfolio has been expanded for 2013 and we now offer conditional sale, personal loan, PCP and motor loan with a balloon. Each one of these can not only help you to promote and sell but earn you money – with reduced margins on vehicle sales, finance earnings have never been more important.
Until recently, certain customers may have walked into your showroom with ‘champagne tastes and a beer wallet’, i.e. with spending power vastly lower than expectations. But manufacturers have tailored their marketing campaigns around PCP with the aim of keeping these customers for life. The effect is that customers can now have ‘beer wallet’ and afford champagne! Through massive finance deposit allowances, very low interest rates and very keen residuals, new cars are as cheap, if not cheaper than used cars to finance, leaving a problem for the dealer. These new-car PCPs don’t earn enough money, as although they enable the manufacturers to shift metal, if you’re not selling as many used units, profits will be down.
Traditionally a new car was a higher price walk from a used one – a natural progression – but now that price walk has inverted and there is no perceived value in three-month to two-year-old vehicles for the customer. There are no finance deposits and you cannot match the very low APR% deals. The dealer needs a new strategy.
How do we help to deliver this? By creating the price walk from a used to new car again. This can be achieved by selling a Barclays PCP. You’ll get an industry-leading residual that is guaranteed. You will get low rates which can attract excellent commission. You can have terms of 12-48 months on used cars. You can sell used cars with confidence again and make a profit, your customer retention will increase and you can look forward to PCP renewals month after month.
We want to be your preferred lender and have the tools to add value to your business. Backed up by competitive rates and terms, along with excellent service levels, this makes Barclays Partner Finance an attractive proposition.
So whether you need to sell new, pre-reg or used stock, speak to one of our professional and enthusiastic area managers about having new Barclays PCP to offer your customers. Give us a call today on 0844 811 7747* or visit us at barclayspartnerfinance.com/business/motor
Mike Britton is a Sales Director at Barclays Partner Finance
*For BT Business Customers calls will cost no more than 5.5p per minute, min call charge 6p (current at February 2013). For BT residential customers, calls will cost no more than 5.5p per minute, plus 13.9p call set-up fee (current at February 2013).
