In our first blog, we discussed why the agency sales model offers benefits to all parties involved and explained how OEMs can gain a competitive advantage by implementing agency sales with the help of our Capgemini Invent Agency Sales Framework. Our second blog focused on dealers as one main key stakeholders and elaborated on the importance of collaboration and early buy-in by means of our Structure and Strengthen principles.
In this blog, we focus on our Specify and Scale principles to explain how structural changes of the sales organization and a standardized rollout approach contribute to the successful transformation to agency sales.
Specify – a flexible organizational model as the foundation for transformation
Agency sales enables automotive manufactures to leverage existing dealer assets to provide a superior omnichannel experience. Although the agency sales model – like the traditional sales model – still involves all three stages of the value chain, new roles arise for all parties involved and responsibilities are shifted. Hence, our Specify principle considers the structural changes that are necessary to flexibly manage different sales models at the same time.
As OEMs and importers (markets) take over processes and workflows from dealers, building up internal functional and technical capabilities becomes key to success, especially in terms of price setting, control over sales channels, customer data management and warehouse logistics.
“The complex interaction of business, technology, and organizational aspects is one of the key success factors for the implementation of the agency sales model.”
Multiple sales models will have to coexist in order to meet customer requirements – call this “parallelization.” The transition to agency sales gives OEMs the opportunity to use it as an enabler to bridge online and offline sales channels and hence, push the adoption of online sales, accelerating customer-centric omnichannel experiences. In order to successfully steer and manager different sales models at the same time, OEMs need to further develop their sales organizations.
We recommend piloting agency sales on a specific product and market to build up expertise and gain organizational and process-related experiences.
Once the model has been tested in a pilot market, efficient scaling and rollout is the next challenge. OEMs therefore need to become agile at scaling pilots into new models and markets. Scaling rapidly means benefits are obtained as quickly as possible and the full potential of agency sales is realized.
Scale – the right mix of standardization and market localization
Central steering by headquarters is vital to provide guidance and support to markets and help disseminate learnings and best practices. At the same time, local teams need enough freedom and empowerment to adjust the model to their market-specific, often regulatory, requirements and settings; for example, to market size and resources, competitive landscape, and IT infrastructure.
Providing a standardized rollout approach for the localization of agency sales in each market will help harmonize processes and guide concept localization. In this context, the close collaboration between all stakeholders (OEM, importer, dealer network) and their early involvement can accelerate decision-making processes. In addition, cross-functional collaboration will be vital as well, among others, to establish uniform processes across brand and markets.
Our Capgemini Invent core principles help to successfully master the agency sales rollout:
- Market first – initial analysis of market needs
Before implementation starts, market-specific needs and requirements must be analyzed so that necessary adjustments to IT systems and processes can be estimated and planned.
- Collaboration – cooperation of all stakeholders
Cooperation between OEM, markets, and the dealer network is essential during all phases to make the rollout as efficient as possible and to realize synergies between activities.
- End-to-end process – holistic rollout approach
The focus on end-to-end processes in combination with the integration of online/offline sales channels enables a holistic rollout approach.
- Adaptivity – localization to market conditions
The adaptation of the standardized rollout approach ensures specific market conditions, such as structural differences of the national sales company (NSC) or resource capacity in the market.
- Partnership – an equal relationship between OEM and dealers
Because the success of agency sales depends to a large extent on the buy-in by the dealer network, it is important to design the agency sales model in such a way that it is suitable for both dealerships and OEMs (e.g. attractive provision model).
The principles of our Capgemini Invent Agency Sales Framework will help OEMs overcome potential obstacles during the transformation journey and gain a lasting competitive advantage:
- Adapt structures and responsibilities by establishing new functional roles and building technical skills to flexibly manage different sales models at the same time.
- Scale fast, lean, and in a standardized way but at the same time enable adjustments to local market conditions.
- Generate synergies through knowledge transfer with an agile rollout team consisting of a central core team and flexible local teams with experts on individual markets.
- Focusing on a holistic approach involving all stakeholders early to accelerate decision speed and to increase collaboration.
At a very early stage, OEMs must adapt their organizational model and set up their rollout approach in order to secure a competitive advantage. This is where preliminary analyses of processes, IT system landscapes, and organizational structures in the planned rollout markets, can be decisive.
As the agency sales model impacts the entire sales process, one-time investments in technology, business processes, additional resources and training are needed.
In order to realize substantial cost saving potentials and to achieve break even after four to five years for a mid-sized automotive market, efficient scaling and obtaining synergies are crucial. In our fourth blog we take a closer look on the short- and long-term effects of adopting the agency sales model and explain how the new sales model boosts profit in the long run.
This blog was co-authored by Sarah Schneider, Nicola Adams, and Anne Junge. Please get in touch if you have questions or need further information. We look forward to exchanging ideas on this particularly current topic.
For more insights, please also read our recently published Agency Sales Model Point of View.