Thanks to the agency model, the role of Field Force Managers and Field Force teams in the automotive industry is changing.
Instead of working solely as an extension of the manufacturers team, these professionals are evolving into dynamic strategists and problem-solvers, adapting to the shifting landscape of automotive retail.
They must take both the needs and interests of the manufacturers and dealerships into account, with the aim of prioritising the customer experience and elevating the brand.
In this blog post we’re exploring the changing role of Field Force Managers and the challenges and opportunities this transformation presents.
Let’s start by defining the agency model.
What Is the Agency Model in Automotive Retail?
The agency business model in automotive retail represents a departure from the conventional manufacturer-dealer relationship that has long been the norm in the industry.
In this model, the traditional wholesaler-retailer structure is reimagined, with a focus on collaboration and shared goals between manufacturers and dealerships.
Unlike the traditional model where dealers purchase inventory from manufacturers and operate as independent entities, the agency model positions dealers as agents or representatives of the manufacturer.
In this setup, dealers no longer hold physical inventory; instead, they facilitate sales transactions on behalf of the manufacturer. This shift introduces a new dynamic, emphasising a more collaborative relationship between manufacturers and dealers.
The agency model encourages a shared commitment to success, with manufacturers and dealers working collaboratively to achieve common objectives.
Manufacturers maintain more direct control over pricing, branding, and the customer experience, while dealers benefit from reduced inventory costs and a more streamlined sales process.
This evolving paradigm highlights how the agency model is reshaping the landscape of automotive retail, fostering a more integrated and cooperative approach between manufacturers and dealerships.
The Importance of Field Force Managers
Field Force Managers act as the primary interface between manufacturers and dealers. Traditionally, these managers were tasked with overseeing and enforcing manufacturer standards, ensuring compliance at the dealership level.
However with the emergence of the agency model in automotive retail, the role of Field Force Managers has evolved significantly. In response to this model, these managers are now at the forefront of fostering collaboration and synergy between manufacturers and dealerships.
The agency model has transformed the dynamics of the manufacturer-dealer relationship, necessitating a more intricate and cooperative approach.
Field Force Managers, in this evolved role, act as strategic facilitators, balancing the interests of both parties and ensuring a harmonious working relationship. They play a crucial role in implementing and adapting corporate strategies at the local level, aligning manufacturer goals with the unique needs and dynamics of individual dealerships.
This requires a multifaceted skill set that extends beyond traditional sales and compliance monitoring to include strategic planning, data analysis, and relationship management.
As the automotive industry continues to navigate the agency model, the importance of Field Force Managers is becoming increasingly pronounced, making them instrumental in steering the success of manufacturers and dealerships alike.
We’re exploring how this role is changing in more detail below.
The Traditional Model vs The Agency Model
As we’ve discussed, the role of Field Force Managers is changing in line with the agency model.
To understand this shift in more detail, we’ve outlined the key areas below, highlighting how this used to be in a traditional sense compared to now.
Inventory Ownership:
- Traditional Model: Dealers typically own and purchase inventory directly from the manufacturer, taking on the financial responsibility and risks associated with maintaining stock.
- Agency Model: Dealers in the agency model do not own the inventory. Instead, they act as agents facilitating sales on behalf of the manufacturer, which retains ownership of the vehicles until sold.
Pricing and Control:
- Traditional Model: Dealers have more control over pricing strategies, promotions, and sales incentives, often making independent decisions based on local market conditions.
- Agency Model: Manufacturers exert greater control over pricing, branding, and promotional activities. The uniformity in these aspects is often more centralised and aligned with the manufacturer’s overall strategy.
Financial Model:
- Traditional Model: Dealers make profits through the sale of vehicles and services, with their revenue stream directly linked to inventory turnover and profit margins.
- Agency Model: Dealers may earn commissions or fees for each sale made, shifting the financial model from one based on inventory ownership to a more service-oriented compensation structure.
Reduced Inventory Costs:
- Traditional Model: Dealers bear the costs associated with purchasing, storing, and maintaining inventory, which can be a significant financial burden.
- Agency Model: Dealers in the agency model benefit from reduced inventory costs, as they are not required to invest heavily in maintaining a large stock of vehicles.
Customer Experience:
- Traditional Model: Dealers have a more direct role in shaping the customer experience, from negotiation to the delivery of the vehicle and after-sales services.
- Agency Model: The manufacturer has a more direct influence on the customer experience, as dealers focus on facilitating transactions and providing customer support within the framework set by the manufacturer.
Branding Consistency:
- Traditional Model: Dealerships may have more autonomy in branding, resulting in variations in branding, marketing, and customer interactions.
- Agency Model: Manufacturers can enforce more consistent branding across all dealerships, ensuring a uniform and cohesive brand image.
Streamlined Sales Process:
- Traditional Model: The sales process is often more complex, involving negotiations on pricing, trade-ins, and financing, with dealers having significant influence.
- Agency Model: The sales process is generally more streamlined, with pricing and terms set by the manufacturer. This can lead to a more efficient and standardised transaction process.
Manufacturer-Dealer Collaboration:
- Traditional Model: Collaboration between manufacturers and dealers may vary, with dealers sometimes operating more independently.
- Agency Model: There is an increased emphasis on collaboration and shared goals between manufacturers and dealers, fostering a more integrated and cooperative approach.
Challenges and Opportunities of the Agency Model
As the automotive industry embraces the agency model, Field Force Managers find themselves at the forefront. Understanding these new dynamics is crucial as they adapt their roles to suit both manufacturers and dealerships.
This means balancing manufacturer-dealer interests and finding the equilibrium between these sometimes divergent needs.
For example:
One potential conflict could revolve around inventory management and product promotions. Manufacturers typically aim to ensure a consistent brand image and push certain models or product lines to align with broader marketing strategies.
On the other hand, dealerships often prioritise the need to tailor their inventory to meet local market demands and respond to specific consumer preferences.
Imagine a manufacturer launching a new line of electric vehicles as part of a broader sustainability initiative. The manufacturer may want dealerships to feature and prioritise the sale of these electric vehicles to reinforce the brand’s commitment to eco-friendly technology.
However, a Field Force Manager might encounter resistance from dealers who, based on their understanding of the local market, believe that there’s a stronger demand for hybrid vehicles rather than fully electric ones. Dealerships might be concerned that pushing the new electric models too aggressively could lead to excess inventory, impacting their profitability and overall business performance.
In this scenario, a Field Force Manager would need to find a compromise, such as allowing dealers some flexibility in choosing the mix of vehicles in their inventory while still ensuring the promotion and visibility of the manufacturer’s new electric model.
However despite challenges such as this, there are lots of opportunities to be had as the agency model encourages more collaborative decision-making. Field Force Managers, in this context, have the opportunity to act as facilitators, playing a more integral role.
Furthermore the evolving role of Field Force Managers necessitates ongoing training and skill development meaning managers can enhance their skill set and stay ahead of industry trends which could lead to further job opportunities.
The Changing Role of Field Force Managers in Automotive Retail
The evolution of Field Force Managers in the automotive retail sector reflects a paradigm shift that extends beyond conventional industry norms.
As the agency model continues to redefine the relationship between manufacturers and retailers, these managers find themselves not only as facilitators but as architects of change.
The dynamic landscape demands adaptability, strategic insight, and strong communication skills.
In this transformative journey, Field Force Managers have emerged as crucial orchestrators, shaping the customer experience and influencing the success of retail operations.
At JBA, we work directly with clients to stay ahead of any changes in the automotive industry, including the shift towards an agency model. We don’t advocate out-of-the-box solutions, as we listen to what your team needs and then develop tailored solutions to suit. To find out more, get in touch with our team.
