Car finance broker Jigsaw Finance is hiring regional account managers and introducing a dealer system developed by Codeweavers. Alan Smith and Roland Schaack speak to Richard Brown.
Changes are being made at Jigsaw Finance. The intermediary based in Stoke-on-Trent has been advertising for, and appointing, regional account managers. The expansion of its staff, previously numbering 35, including dealer development director Alan Smith, is tied to the replacement of its dealer system supplied by software development firm Codeweavers, also Staffordshire locals.
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As much as regulation may suggest the need for finance companies to be fair to customers, Smith believes Jigsaw will secure more business from dealers from being as fair as possible to them, something enabled by the implementation of Codeweavers’ advances.
While these developments are happening the company is enjoying a prosperous 2013, according to Smith, including a "really good" first three months of the financial year. "We produced a business plan this year which would exceed our previous last five years’ results," Smith explains. "We’ve achieved almost double the business plan for the first quarter."
Richard Brown: You were advertising for account managers at several offices, how many new staff were you hoping to recruit?
Alan Smith: We were hoping to recruit a maximum of three. We’ve recruited two of those now. We’re very much recruiting on the basis of finding somebody who’s the right fit for the business, and we will find a role and a territory that is fit for them.
Brown: And where have you hired?
Smith: In the south-east, based in Berkshire to cover the south-east corner of the country, and we’ve recruited a guy for Staffordshire. One of the statements we want to make is we want to dominate our local area. Being a local business can be quite important. Interestingly, most of the car finance brokers tend to be in the north of the country.
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By GlobalDataBrown: Is the south-east an expanding area for you? How much penetration do you have there already?
Smith: We’ve got some established, current relationships with dealer groups there, which would be enough to get our appointment in the area started. Obviously, he’ll bring in some key contacts and relationships, both appointments will. The rest of the role will be based around new business.
We’re not working with any more dealers at the minute than we have for the past couple of years, but we’re probably getting more out of the ones we’re working with because our product suite is impressive. We’ve got unique products other brokers just aren’t able to offer. It’s probably those reasons we’re writing ever more business.
We’ve got a funding line with ALD Automotive. The key point with the ALD product is, nine times out of 10, the residual value on a 0-2-year-old is higher than any other PCP on the market.
We have exclusivity on that line. They have no appetite to deal with anybody else. It enables us to highlight to dealers, with some substance, that this is something which makes us different.
Brown: What is the new dealer system?
Smith: We actually have some dealers who enjoy working with us because of our current system. Our current system functions really well. What our new system does is allow the dealer to compare multiple quotations side-by-side.
One of the main frustrations a dealer has is – if they want to do a PCP quotation and find the best PCP quotation in the marketplace – they have to go to each funder’s system to get back a quotation.
It’s time-consuming and the reality is: most dealers don’t do it. They’ll use their preferred lender, which, very often, doesn’t deliver the best product for them or the customer, but they do so out of habit.
We’ve provided a facility which we call the comparison section of our system, which enables dealers to pull multiple PCP quotes back within one quotation.
It will pull anything up to 15 separate quotations side-by-side, so the dealer can then decide which will be the best for the customer.
We want to demonstrate that the ALD product is going to be the best product and dealers can’t get it from anywhere other than us.
There’s an ulterior motive from our point of view, but it also gives complete transparency to the dealer and the customer, showing them every product that’s available.
The Consumer Credit Directive suggests you should be giving the customer all of the information to make an informed choice. Dealers often do not present a hire purchase and a PCP quote next to one another. We’re giving them all the options available. We’re giving them a low-rate plan, a hire purchase plan, a lease purchase.
It’s not just PCP available, it’s all the products, and the customer will have the opportunity to make an informed choice.
Brown: How did the work with Codeweavers come about?
Smith: They produced this system for us. It’s something they had in mind for some time and they asked us what we wanted.
Codeweavers will probably look to take this product to market for other lenders at some point. At the minute, we’ve got a certain period of exclusivity, but Codeweavers sells technology to finance companies and businesses so it’s going to maximise business potential from it.
Brown: How do you get from contacting a customer to sealing a finance deal?
Smith: I’ll use a business manager’s day off as an example: If a site sells 10 cars a day and it’s the business manager’s day off, they’ll probably not sell finance for seven of the customers. This is a way where the business manager can potentially phone the customer the next day and talk them through finance products, have some interaction with them, display the figures accurately, amend the deal while the customer’s on the phone.
It also displays the Codeweavers product videos which explain to the customer what the product is, PCP, HP, and so on, so the customer has complete knowledge of the product they’re taking out. Again, from a compliance and transparency point of view, this can only add benefit. It’s all controlled from dealership level.
Brown: Generally, what’s the broker market like at the moment?
Smith: Traditionally, we’ve done a portion of new car business, about 70/30 on new and used vehicles. In the last 12 months, that’s shifted dramatically to about 90/10.
Because the manufacturers are so dominant in the financing of new cars now, it’s had a knock-on effect on our business. We’ve had to really work on new car product and supporting the nearly-new, what I call ‘short-cycle’, market, pre-registration demos, that sort of thing.
That seems to be where dealers struggle. If you can hit a nerve with a dealer and really want engage with them, having conversations around that type of stock always seems to be a conversation they want to have.
Certainly, for brokers to be successful, you need to be supporting dealers with their challenges. At the minute, those challenges seem to be in pre-registration and short-cycle stock.
Remote presenter
Roland Schaack, managing director of Codeweavers, talks about the dealer system developed for Jigsaw, his company’s plans and car finance technology.
The system is a quote-and-propose tool for Jigsaw to present products to dealers who then demonstrate the products to showroom customers. The tools available to dealers allow them to provide comparative calculations for the customer and "to control, stack and build the deal the customer wants with their finance profit built into it".
Dealers can compare the differences between finance products for the consumer without having to run two separate examples. The deal can then be proposed to Jigsaw, and the progress of the proposal communicated, through Jigsaw’s back-end system (which Codeweavers also provides).
The system will likely be exclusive to Jigsaw for three-to-six months and Codeweavers, which includes MotoNovo Finance and Close Motor Finance within its clients, is talking to lenders about taking it on. Although a "similar version" is tied into the finance calculators Codeweavers supplies to dealerships, the Jigsaw version "allows remote presentation of finance products and real time calculation". The system is geared to combine customer interaction, with maximum transparency, with contemporary technology focused on smartphones and tablets.
According to Smith at Jigsaw, 20% of customers don’t reach a dealership until collection of a vehicle, with finance and add-on sales particularly low for such customers.Combating this, the Remote Presenter function enables the broker to perform an interactive quote with the consumer by phone.
Having sent a consumer the appropriate online link, Jigsaw may then discuss discounts, add-ons, loan amount, term and deposit. Finance adjustments are relayed to customers automatically on their computer or tablet screen at home, presenting them with an offer sheet on a remote basis.
"We’ve demonstrated it to all of our pilot dealers and they’ve absolutely loved that part of the system," says Smith. "They see that as a massive benefit to convert customers to finance customers."
As Schaack explains, Codeweavers has also geared the system to be "as easy for dealers to use as possible as some dealers struggle with technology. We’ve learned over time to make it a clear path. We try to avoid training dealers on a system; it should be intuitive. That’s how we built the system."
Integrated stock, credit-scoring and showroom links
Schaack says Codeweavers is also working on "quite a few things", including integrated stock to aid a dealer presenting his vehicles in his point of sale system.
"We can take a feed of their used car stock and integrate that in so they can perform a payment search natively in their point of sale system, and that payment search can then be used to go into a full deal to play out the other calculations," he explains.
Codeweavers is also in the process of integrating a credit-scoring system, allowing dealers to pre-qualify customers, with the customer’s consent, "before they spend ages fitting them to a vehicle, only to find they’re not creditworthy".
Finally, the company is linking the dealer’s website into the showroom: "If a customer makes any call to action on the dealer’s website, then the dealer will be instantly notified via an email and we’ll probably create an app for their mobile phone," says Schaack.
"The idea is: once the customer begins completing their details, the dealer gets an instant notification. The dealer can react immediately to that customer while they are on the website. They’ll be able to see what action the customer has taken, what vehicle they’re looking at, what finance they’re interested in, with the contact details sent to them through the email.
"We’re trying to tie the two together. The dealer can click a link on the email and, in effect, watch the customer completing the application form or the credit check.
"It’s a real-time link of the two systems, between the showroom and its website. There’s always a right time to catch a customer and if the customer’s taking a call to action on your website, there’s no better time to engage."
The Amazon experience
The philosophy of Codeweavers’ work, says Schaack, is to bring dealer technology in line with the demands of the customer.
Customers want "an Amazon-type experience", as Schaack calls it. "They don’t want to come down to a dealership and be strong-armed. By the same token, dealers still want to exert their influence on customers, to help them make the right choices and to make profit on selling additional products. We’re creating a set of tools which will help dealers do that.
"You need to present the information to the customer, but give the dealer the tools to influence the customer."
richard.brown@timetric.com
