Monday, 24 September 2007
“We are delighted to be recognised by the Motor Trader Awards panel,” said Black Horse Finance's managing director John Woolley. “We are continually looking to offer our dealers a more streamlined process and to give them a competitive edge, so it is very encouraging when we receive recognition, as it confirms that these changes are having a positive impact on dealers and the industry as a whole.
“We've already used the winner's logo on advertising. We're also promoting it in internal publications, external press releases, dealer newsletters and advertising. We also aim to use the specific phrase ‘Motor Trader Awards Winner' wherever possible.”
Development
Black Horse — part of Lloyds TSB — spent nearly three years developing LetsUConnect to help it consolidate and potentially grow its share of the motor retail finance market. It has already claimed market leadership of the non-manufacturer sector with around 16 per cent of sales and 45 per cent of manufacturer schemes. But it recognised that many of the procedures for deal authorisations have changed little in 30 years.
If a dealer agreed the sale of a car with a retail customer, it would then relay the customer's details to Black Horse by fax or phone and then wait, possibly overnight, until it was sanctioned.
That could make the difference between the customer buying finance from the dealer or turning to a high street bank.
“To remain competitive, we recognised that we must manage our costs by streamlining processes, reducing error rates and empowering motor dealers to be more self-sufficient through the use of new technology,” said Woolley.
The winning ingredient of LetsUConnect is its combination of the use of electronic signatures with other online facilities at the point of sale.
It was the first in the market to use the facility for electronic signatures, which are legally acceptable. Customers can sign finance agreements electronically online, thus reducing error rates and speeding up the whole authorisation process.
Previously, dealers had to submit finance applications to Black Horse by 3pm for same-day authorisation. That deadline has been extended to 7.30pm, which is close of business for most car retailers.
Business savings
Since LetsUConnect was introduced in February 2006, Black Horse has redeployed two-and-a-half full-time people who previously dealt with incoming calls from dealers.
One of the most telling statistics is that the average number of phone calls per deal has fallen from 1.7 to 0.6. A lot of these were what is called “noise”, calls made to establish if the fax had been received and not about the substance of the deal itself. The other startling statistic is that the 30-minute turnaround time has fallen to four minutes.
Another major saving has been in eliminating inaccuracies. As Black Horse puts it delicately, the combination of paperwork and car salesmen creates a propensity for error, not least when 12 or 14 pages of faxed documents are transmitted in the wrong order.
The LetsUConnect system prompts sales staff to provide the correct information, which is always assembled in correct order.
Customers still have the option of requesting a paper copy of the agreement but by last summer more than 60 per cent of agreements were being processed electronically. Online fraud detection also greatly reduces the opportunities to submit false applications.
The other side of the coin is that the streamlined system also provides dealers with up-to-date and accurate information on their performance in selling finance.
With previous arrangements, dealers received a commission statement one week after the end of each month, which meant this information could be up to five weeks out of date. Now, LetsUConnect means they see the figures as soon as the deal is done.
Black Horse claimed this was a huge advantage to finance directors, as it helped them manage cash flow more
effectively and could influence the sale of finance over the remainder of each month.
Also dealers are now paid commission nightly rather than at the end of the month. All of this information is presented on dealer computer systems, allowing finance directors to make year-on-year or month-on-month comparisons with how they are performing.
Again, this level of information greatly reduces the need to contact Black Horse with queries about these matters.
Looking to the future
From 2008 Black Horse reckons it will save £5.5m a year through reduced fraud and costs associated with sales and new business and the quality of service it provides will be improved as it concentrates on managing its relationship with dealers rather than
micro-managing the actual transactions.
LetsUConnect is in around 20 per cent of its dealer partners, with new dealers going over to the system at a rate of around 100 a week.
This summer it said it also detected a slight increase in its market share. While it does not suggest this was all down to LetsUConnect and its innovative electronic signatures, Woolley is convinced it played an important part in the process.
“Black Horse has broken new ground by pioneering LetsUConnect, an on-line finance authorisation system that takes away one of the biggest headaches facing dealers when closing a sale.
“Its legally approved electronic documents cut paperwork to a minimum, greatly speeding up the process of approving finance applications and reducing the scope for errors. It has extended the cut-off time for each day's finance approvals from mid-afternoon to early evening, helping car retailers capture a bigger share of the highly competitive market for finance for vehicle purchases.”
Every firm strives to find The Big Idea: the one development that puts business on a new plain – leaving the competition behind. The Innovation Award, sponsored by Trader Data Systems, recognised the company which created such a scheme during 2006 and could show it had been successfully and profitably implemented.
l Desperateseller.co.uk
l Manheim Auctions
l Peter Vardy
l Shell UK Lubricants
Previous winners
2006: Akzo Nobel's Autoclear UV
2005: EurotaxGlass's
2004: Mirka
2003: Foray Motor Group
2002: Dealer Car Manager
2001: ASA Insurance
2000: Woodhouse Engineering
1999: Prophets Garage
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