Michael Edwards: why the top MG dealer prefers a low-tech approach

[gallery id=17]

Without a social media profile, expensive showroom fittings or furniture, coffee bar, Wi-Fi, gaming consoles, children’s play area or tablet-armed salespeople, the single-site Michael Edwards Group business has been singled out as a shining light in one brand’s sales network. 

♦ See more images of Michael Edwards MG here

The roadside dealership in Wigan, Lancashire, with a single-bay workshop, could be described as ‘old-school’. Its 20-car showroom is enclosed by glass on three sides with doors at the front and sides and offices to the rear. The building is just over 10 years old and there is little evidence it has had a corporate identity makeover in that time.

Michael Edwards is not an exceptional business in this regard. Yet MG singled it out as its most successful in the UK. Director Mike Latimer is confident he will exceed the brand’s sales target of 100 new cars this year and is confident he can sell between 150 and 200 next year.

Latimer puts the success down to a combination of an uncomplicated approach to sales and a similarly direct one from his franchise partner, plus MG’s “fantastic” small car, the MG3’s, sensible, no-haggle, pricing and generous specification.

“There’s a tendency in the business to overcomplicate matters. In an ideal world, manufacturers should price cars at the value they would sell them for,” Latimer said.

“Why price a car at £25,000, if you will sell it for £20,000 two weeks after you’ve launched it? It means customers are always waiting for the next deal. They know from the outset they can get the price down.”

“No one buys a sofa unless there’s a sale on – and there’s always a sale on. I believe the same mentality drives the car industry.”

Latimer’s showroom can accommodate up to 20 cars. He has 10 MG3s on show and will have a single MG6 soon. He has a couple of other makes of used cars inside and more outside on the half-acre site.

There is little MG branding – fascia signage, a totem outside, a ‘colour and personalisation’ board, plus a touchscreen configurator. Latimer doesn’t see this as a weakness: “Customers of high-end brands would more likely expect a certain standard of showroom – the latest tiles, furniture and tech.

“But when I see the same standard applied to mainstream brands, the impact on customers can be intimidating, leaving the impression of the nicer the showroom, the more they think they can charge. It can pay off for the dealer as margins can be higher.”

[page-break]

 In any case, customers rarely use the touchscreen configurator, said Latimer. His display of 10 MG3s, all ‘personalised’ with different colour schemes, are what sells them, together with the specification and pricing.

“The MG3 is the best small car on the market,” he said. “Any dealer would say they would like to see their franchise advertised on the television every day to ensure showroom footfall, but MG has done all that’s required with the car to generate maximum interest. It exceeds expectations. For the same spec Fiesta, you would need to be paying £5,000 more.”

 

Catering for online car customers

The austere presentation would also appear to match the growing consumer propensity to ‘showroom shop’ online first.

“Fewer people are walking in off the street,” he said. “When they travel, it’s to see a car or cars you’ve advertised and with a buying intention in mind.”

The nearest MG centre to Michael Edwards is in Oldham, 20 miles away. Before this it was Yorkshire or Chester, Doncaster or Sheffield, giving Latimer a “vast territory”.

Despite the growth of the MG network, customers still travel to Michael Edwards. While 35% of them live within five miles of the dealership, 15% are from more than 100 miles away.

Latimer said there is no need for sales training, mission statements or inspirational messages on the walls of the business to ensure staff do their jobs properly. Five people work for him: a driver/valeter, two technicians and two salesmen.

“Everyone knows what their role is and how to treat a customer. We will all greet a visitor and offer them a drink. I’m here all the time and some customers only want to deal with me. This might be because being able to speak to the owner is very rare these days.”

Latimer said customers have required assurances about the ‘new’ MG brand, following its reputation-damaging demise in 2005: “We’ve been trying to put across the size and commitment from SAIC and the new beginning, rather than a continuation of MGR, although there is an extraordinary loyalty to the brand that is bringing older customers to us.”

Michael Edwards was one of the early franchisees, starting in 2008 with the TF. It held the SsangYong sales franchise until October, when Latimer decided to commit solely to MG.

Despite a no-haggle price, the personalisation options available to customers on the car mean additional profit opportunities for the business. Latimer said it is from £150 to £850 per MG3 sold, but with F&I add-ons and accessories the margin is an average £900 – or 8% of transaction price.

[page-break]

His approach to marketing the business isn’t sophisticated.

He uses Auto Trader to market all his used stock. He avoids marketing via telephone (“too often people don’t recognise the number and won’t pick up”), uses text-only emails to highlight the latest offers to a live customer database of more than 1,000 people, and only uses SMS messaging for ‘ready for collection’ service alerts.

Local newspaper advertising has also fallen out of favour due to its high price, low response rate and by the time the ad runs, said Latimer, “I’ve sold quite a few of the cars being promoted”.

A recent promotion in Wigan Shopping Centre proved more effective. Two MG3s were on show for two weeks in July. The stand was unmanned, but contact details were displayed. “I can generate a better quality lead this way,” Latimer said.

“If someone is genuinely interested in a car they will get in touch. I don’t have to get them to enter a competition to get their contact details. I know if I do it this way and call them later, people say they’ve never heard of me.”  

The stand led to five sales. Latimer plans a return before the end of the year.

He has also avoided the pull of social networks. He doesn’t tweet and doesn’t have a profile on Facebook.

“Social networks like Facebook are hugely successful, but I see too many posts that say latest news and what they’re referring to is out of date or an offer that’s ‘valid until’ and you know it’s not a genuine assurance.

“I also wouldn’t get the volume of followers to make it worth exploiting the communication possibilities sites offer, like some of the larger groups.”

 

Focusing on the basics in car sales

MG is building its UK network – it currently has 50 sales points, but has targeted 80 by the end of this year and 100 by the end of 2015. It singled out Michael Edwards Motors as “maximising the MG opportunity”.

Guy Jones, MG sales and marketing director, put the success of Mike Latimer, and dealers like him, down to focus: “They are all very focused on the MG brand, with real commitment and passion to maximise the current opportunity. If they have other franchises or used car businesses, then they have really committed time and good resource to MG now and are not sitting waiting for the future.

[page-break]

“The commitment to MG is there from DP through to salesman, which in some cases is the same person.”

On Latimer’s point regarding the power of brand exposure on television, Jones said: “While they are all requesting us to increase our spend in marketing (which is happening as we increase volumes), dealers are not waiting for us to deliver the opportunity for them, they are working their databases and local areas to the best of their ability for MG.

“Key to this is taking the product out to the people and not sitting in the showroom waiting for people to find it – there’s no better marketing than people seeing the product with their own eyes.”

Doing the basics well is fundamental, Jones believes, and technology can be a distraction.

“I fully support the fact that people are increasingly using iPads, smartphones and PCs to access more and information before the purchase, but when they decide to enquire or purchase, doing the basics well is far more important than looking hi-tech on the surface.”