Sorry, you need to enable JavaScript to visit this website.
News   |   5 December 2022

The OEM agency model – what retailers need to consider

jacqui barker

Jacqui Barker, OEM Director, Global (Alliances Team)

The latest buzzword sweeping (as buzzwords tend to do) in the automotive industry is the “agency model”. As is the want with trends, it heralds significant change, but exactly what those changes are and how retailers need to flex and adapt, is harder to pin down. Whilst there are many types of agency models, the consistent theme across all is that dealers will need to move into a more experiential and “agent” role to help facilitate sales. Whilst the agency model has been the cause of much discussion and debate, there is no doubt there are advantages to the dealer whether it be the potential reduction in distribution costs, allowing dealers to focus on what they do best – providing exceptional customer service, or enabling more effective omnichannel operations.

However, before dealerships move to this new model, there are some important factors they will need to consider.

    1. Beware of customer expectations when making the transition

Other retailing experiences have conditioned the customer to believe that any buying journey will be a seamless process - whether purchasing groceries or buying a car.

When buying a car, customers want to have fun and enjoy the process. They want to spend as little or as much time in the dealership as it suits them, they don’t want to negotiate on price, or enter into complex transactional processes.  Dealers should listen to their customers to understand what best suits them, and to deliver on those expectations as a personalised and transparent way as possible.  The agency model, and it’s move into making dealerships experience centres, will enable retailers’ to double down on those areas where they best add value in the car buying journey - customer service and delivery.

    2. Build a customer streamlined journey

Dealers need to remember that most customers only see one ‘brand’ when buying a car or going for a service, even if it involves multiple suppliers or moves between off and online interactions.  So, it is important to ensure the journey is streamlined to meet customers expectations at every touchpoint. Brands and retailers need to connect their individual customer datapoints to build a customer-focused journey.

Keyloop is especially well placed to flex its technology and connect the dots, delivering a truly end -to-end omni-channel approach across the car buying journey, from the point of discovery to the moment of delivery and beyond.

    3. Identify where and how you can maximise revenue

Car dealers are making less money on new cars, and the aftersales value of an electric vehicle is half the value of other vehicles, so retailers will need to be strategic about maximising all areas of their sales experience.

The key to turning these challenges into opportunities lies in how manufacturers and retailers look to approach the change. Those adopting a holistic approach and focusing on consistent customer service across all brand touchpoints, should achieve greater efficiencies and more streamlined processes. Not only enhancing the customer experience but creating greater loyalty, leading customers to return for aftersales opportunities.

The agency model presents an incredible opportunity to transform the way the automotive industry engages with its customers. Providing buyers with a smoother, more consistent purchasing and after-sales journey, dealers will lessen their commercial risk, and OEMs will benefit from a heightened awareness of customer needs.

Company contact details: