BMW captive: Dealers want more than best price
Bugbee: "Each OEM is really fighting the others from a loyalty perspective. More and more that's encompassing how satisfied they are with the entire sales process -- including the finance."
It's no accident that BMW Group Financial Services is an early mover in e-contracting and the use of iPads in the F&I office, and also No. 1 in dealer satisfaction,.
So says Shaun Bugbee, vice president of sales and marketing at the captive finance company, based in Woodcliff Lake, N.J.
Bugbee said in a recent interview that there's more to dealer relationships than simply offering the best possible prices. For instance, he said the captive emphasizes to dealers the connection between fast, high-tech service and customer satisfaction and loyalty.
BMW Financial Services, the unit that serves the BMW brand, was No. 1 in the J.D. Power and Associates 2012 U.S. Dealer Financing Satisfaction study last summer, in both prime-risk loans and leases. It was No. 2 in dealer satisfaction in floorplanning, behind rival Mercedes-Benz Financial Services.
Alphera Financial Services, the BMW Group Financial Services unit that serves non-BMW Group brands, was also No. 2 in dealer satisfaction in prime-risk loans.
Bugbee recently spoke with Automotive News Special Correspondent Jim Henry about what lenders look for in dealers, and vice versa.
Do you need to remind dealers, "We're the captive, we're always there for you?"
It's more like we hope dealers see the value.
One of the things we specifically do is to make sure dealers understand we are proactive with innovation and technology that make sure the customer's experience is seamless, transparent and quick.
We go out of our way to make sure the dealers see that. We have metrics around how quick the turnaround is, how if they use the iPad, customers are more satisfied, and a more satisfied customer is more likely to come back for service and eventually to buy another car.
Do you measure that, too?
All of the OEMs are reimbursing dealers based on how satisfied their customers are. But as the products (vehicles) themselves become a more level playing field, each OEM is really fighting the others from a loyalty perspective. More and more that's encompassing how satisfied they are with the entire sales process -- including the finance.
What would you say dealers want from their captive finance company?
What the dealers want from the captives: That's where we spend a lot of our time, is trying to figure that out. We are consultative to their business. We're working with their sales; we're working with service, and warranties. We're helping with their entire business model.
We're aiming to make sure they see the right profit numbers. They have to make the profit levels they're expecting.
It's not all just about rates, or pricing?
It's not just about prices.
We see better penetration with the BMW-branded F&I products, even though pricing may be at higher end of the market.
If it was all about transactional cost, most providers would be in trouble, because some of the banks can offer rates that are lower than sales-supported programs (that is, incentive programs supported by the BMW of North America sales division).
Other lenders have told me how important it is just to have access to the right people at the dealership, and vice versa.
Whether you're a bank or captive, you need to be receptive to feedback. You have to be communicative with your dealers. It goes back to the dealer principals and the GMs and the others, they need to understand what the strategy is. If something doesn't work right, if they provide feedback they need to know there are folks who will listen.
You can reach Jim Henry at email@example.com.