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Triangle of Chesterfield, a small privately run solus site, provides a textbook study of how to grow profitability with a volume franchise in this special Dealer Insight sponsored by AutoProtect.
A Kia outlet since 2008 and named the brand’s UK Dealer of the Year in 2012, Triangle of Chsterfield has seen impressive year on year growth.
Last year was a particularly good one for the business: new car turnover climbed 35%, gross profit on those sales by 22%, used car turnover rose 40%, and labour sales by 28%, leading to overall gross profit up by 20%. And to cap it all, Triangle took the Franchised Dealer of the Year accolade in the 2013 Motor Trader Awards.
Winning our award brought the firm’s managing director David Dench full circle, for having learnt the trade in dealerships owned by his father, he established Triangle in 1991 after spotting an advert for a Subaru/Hyundai outlet in Motor Trader.
The Hyundai franchise was dropped and Dench settled down to selling Subaru, consistently making the brand’s top three dealer list. By 2008 Dench decided the business needed a volume marque and Kia, a brand in the ascendancy, proved to be the perfect choice. The refranchising was seamless with the business retaining many of its loyal customers.
Triangle beat its first year new car sales target four-fold and has continued to grow at an impressive rate; success built on Triangle’s professional staff and their relationship with customers.
“It sounds corny, but the customer is all that we are here for – I once thought we were the important bit and customers should be grateful to come here, but as you mature you realise it’s the other way round.”
Shortly after launching the new business came the downturn. Although Kia’s new car sales were helped by the scrappage scheme, Dench said it was difficult to retain customers buying purely on price.
“The scrappage scheme had a huge influence on how we functioned, with the tiniest of margins on substantial volumes.
“We had to work really hard to keep scrappage customers as service customers and then repeat new car customers – and we did convert many to new car buyers.
“We had to impress on such customers the responsibility to have their car maintained, so we used very inexpensive fixed-price servicing packages, to make them more comfortable.”
Service plans are today a core part of the business. New car customers are actively offered Kia’s Care3 plan and Triangle tailors its own plans to suit certain buyer profiles, with plans for those who like to trade-in after two years.
Plans are also offered to used car buyers, all part of efforts to keep customers loyal: “We want them to come to us even if they just need the car washing. Something we learnt from scrappage we’ve applied across our business – it taught us a lot about customers.”
Most of Triangle’s marketing activity is increasingly web and text based, with a New Year push underway to remind existing customers and their families about aftersales and trade-in opportunities.
The business is also looking at ways of developing its social media channels.
“We have generally only relied on customer reputation but we are going to use media with careful audience targeting, more extensively this year. Having seen how it works, it’s awesome.”
The business works hard to capture email addresses and mobile phone numbers for texting.
“Text marketing for servicing is fantastically effective, customers you text with a service reminder often phone straight back and book it.”
Many staff have been with Triangle for more than 15 years, which Dench believes is a crucial factor to the business’s success.
“Customers know every member of staff by name and we know all the customers, though that’s getting more difficult as the volumes grow.”
A long-serving team also brings benefits within the centre. “With a relatively small team you all talk on a daily basis and there is no structure to follow, it’s a flat organisation. We have harsh conversations, but we have them both ways and deal with the outcome – my staff are comfortable with being able to say what they are thinking.”
Staff training benefits from Kia’s national training centre in Nottingham being just an hour away. “We have at least one person there every week – Kia has a fabulous training programme. We also do constant revision and training in house – nothing fancy, straightforward, beneficial procedures.”
The site, near the M1, converted to Kia’s Red Box design in 2012 but Dench is on the lookout for a bigger purpose-built location to facilitate the business’s growth potential. He foresees a move to new facilities in the next 18 months.
“In 2013 we achieved figures that we had predicted for 2015 in our Kia our business plan. That shocked us – we knew we were doing well but we didn’t realise just how well.
“Whilst we’d like to claim much of the credit it’s the brand that is flying, Kia’s management have done a stunning job.”
However, Triangle’s customer focused approach, a factor acknowledged and rewarded by the Motor Trader Awards judges, has also been an important factor in the business’s ongoing success.
“We’re very different to many dealers. Every time something challenges us we deal with it instantly. We all work in the business, there are no boards to go through when a decision is needed, we just do it. We make life as simple as we possibly can.”
Fact File: Triangle of Chesterfield
Location Chesterfield, Derbyshire
Brand Kia
Established 1991
Staff 30 (15 in aftersales)
Ramps 10
Andrew Charman
