INSIGHTS

In Australia, Toyota Moves to Unify Its Dealer Network

Barry Money

Already the largest auto brand in Australia, Toyota is moving to give its two hundred plus dealers a clearer view of the customer through innovations that could turn its sometimes technology-fragmented dealer network into a unified force.

Over the past six decades, the company’s entrepreneurial dealers have earned an 18 percent share of the market. But with that came a lot of fragmentation in terms of technology, according to Barry Money, General Manager for Retail Development in the company’s Australia operations.

We have so much data out of many, many different silos, but really, it’s not the data we need. It’s insight from the data that we need and that insight will drive the strategy, and the strategy will drive innovation.

“We have allowed our independent & entrepreneurial dealers the ability to determine their own destinies, shall we say. Specifically, we’ve allowed them to determine their own systems and processes,” Money said in a recent interview with Transform to Better Perform. “But we now realize that one of Toyota’s strengths is in standardization. Not necessarily standardization of the platform. But standardization of the approach to how we utilize customer data.”

In other words, the company making Australia’s best-selling cars now wants to use data from the people who bought those cars to help Toyota make their cars more responsive to consumer desires.

“What we have to do is collaborate, and we have to collaborate with many partners, many suppliers and our main stakeholder - our dealers – our business partners at the front end,” Money explained. That brings up two key questions: one is philosophical and the other cultural.

“The philosophical argument is always: Who owns the customer and, therefore, the customer data?,” Money said. The second question, he says, is cultural: What does collaboration on a new standardized approach to customer data mean among dealers who’ve competed as independent businesses for decades?

Issues like this often surface as companies undergo a technology transformation. Organizational change recently was cited as one of the top obstacles to upgrading to new Hybrid IT models that blend the power of modernized data centers with the many advantages of working in the cloud. But the goal is important enough to take on that burden. “I think as time moves on, we’ll have a single view of the customer activity in real time, which will move away from that fragmentation,” he said.

Into the Funnel

“What we are trying to do is, I guess, take prospective customer data, understand the customers’ needs and wants, segment them and target them in a certain way, understand the propensity for certain offers in terms of a consumer purchase, measure any type of conversion through a particular funnel – whether it’s a sales funnel, a service funnel or a finance funnel,” said Money.

“We have so much data out of many, many different silos, but really, it’s not the data we need. It’s insight from the data that we need and that insight will drive the strategy, and the strategy will drive innovation,” he added. The overarching goal of the effort is to stop focusing so much on data extraction and start focusing more on generating better insights that help the consumer engage with the Toyota product. This is a goal shared by many sales and marketing managers across almost all industries.

"We have seen retailers create competitive advantage by successfully leveraging customer data to generate insight. So, there is an equally huge opportunity for automakers," said Raj Mistry, Group Vertical Sales Director, Dimension Data. "However a pragmatic approach is required to the aggregation and analysis of data, otherwise it will be very easy to get lost in a mire of useless information.” 

In Toyota’s case, Money’s team often gets the data it needs, but not in a timely fashion. “Because of the fragmentation [in internal systems and in the dealer network], it requires extraction from many systems,” the Toyota executive said.

For example, there are over twenty dealer management systems (DMS) in the network, making it “a bit time-consuming” to get the information Toyota requires for front-end innovation. “If you can imagine trying to invent something new, often you need new sets of data or new ways of looking at data, but that extraction is often not timely,” Money said. “So yes, we get the data we need for the best part, but often we will struggle to get that in real time.”

Many of the business executives we’ve interviewed spoke about the need for innovation within their own companies. If it wasn’t about getting better tools for data analytics, it was often about developing better apps, or refining the goods and services they offer to the public. Like Money, they often mentioned the need to do that faster. We asked Money if he was satisfied with the speed and quality of innovation coming from his IT organization.

The Steve Jobs Standard

“I think anyone in a front-end retail research and development environment like myself is always going to be dissatisfied with the pace of IT innovation and the pace of data extraction, analytics and the provision of insights,” he said. “I feel a little bit like Steve Jobs sometimes when I go back to the IT people and say, ‘No, not good enough. Please start again.’”

He said the IT team is clearly moving towards greater collaboration with the business side, but added that in his personal view, the wheels do not always turn as quickly inside the conservative automaker as he’d like. Money said the greatest fruit of the collaboration between IT and business is education –“education of the IT division in terms of the need for speed and the need for continual lean startup-type learning metrics and minimum viable product type approaches.

“I think those things are the seeds of innovation in our IT division,” he said.

To pull all the fragmented systems together and to create a standardized process of collecting the data will require new technology based on data centers and the cloud – so-called Hybrid IT.

“We’ve worked on that pipeline,” he said. “I think the push from our side is to treat data as more of an asset and therefore create an infrastructure around it, but it’s early days for us to be quite honest.”

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Among the challenges ahead are “very stringent Australian privacy laws” that not only apply to the collection and storage of consumer data, but to its destruction when it is no longer needed for its original purpose.  The company also has to get permission from its many customers to use their data.

“That’s our biggest challenge to be quiet honest,” Money said, “getting people to sign up to the usage of their private data.”

Contributors

Barry Money
General Manager - Retail Development
Toyota Australia


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