Framed By The Frogs

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As I mulled over Toby Johnstone’s suggestion to sell retail cars using a corporate client's discounts I realised that he was endorsing exactly what Dopplegänger had claimed to be going on all the time. 

Here was an employee of Renault Croydon, a dealership actually owned by Renault, telling me to do exactly what Dopplegänger had done and sell cars to retail customers using the discounts available from a corporate client's account. 

Maybe I had misjudged Dopplegänger, though somehow I just didn’t think so.  Even if what he’d said about franchised dealers and manufacturers abusing their own discount codes appeared now to be true, he had still tried to double-cross me and extend his own business empire using my money.


But that was then and this was now so, with Toby Johnstone’s proposal still ringing in my ears, I went straight to work on drumming up car sales for Renault.


E-mails went out to car brokers offering deals and it didn’t take long before orders for Renaults started coming in.  Lots of them.  So it wasn’t long before Toby suggested that we should get together with Renault again to see if the discounts could be improved. 

Toby organised a meeting with Carolyn Sample, the Southern Area Corporate Sales Manager at Renault.  Apparently Simon Arnold had left Renault and Carolyn, his former boss, was covering his patch until a replacement could be found.


We met with Carolyn Sample at Renault Croydon and it wasn’t long into the meeting when Carolyn said that the sudden surge in sales through the BALPA account had not gone unnoticed and Renault was pleased with the extra business. 

Then Carolyn said that she was concerned about whether or not the public could see the deals on the account and asked how I stopped the public getting to see the prices on the web site being used by BALPA members. 

Carolyn said that Renault didn’t want to upset its franchised dealers by having the discounted prices on view to the public, who would undoubtedly take the details down to their local dealer and demand the same price from them.


I assured Carolyn that the web site was secure, with access to the web site only available from a password protected part of BALPA’s web site, so that members of the public would not be able to stumble upon it or find it through Internet search engines, all of which was absolutely true, but totally irrelevant, as we all knew that the cars weren’t being sold to BALPA members anyway.


Then Carolyn asked what Renault could do to help with selling more cars. We discussed some extra discount in the form of free metallic paint on each car, worth about another £350 per vehicle.  Once again Toby had been right.  Generate sales and more discounts will appear to keep the orders coming.


After the meeting with Carolyn had finished I stayed on to chat with Toby Johnstone and asked what he thought about the meeting.  Toby said it was obvious from Carolyn’s questions that she knew the score on what was really happening. Toby reckoned that all Carolyn was concerned about was keeping the deals out of sight from other dealers in the Renault network in case they got upset, which was understandable.


As for Toby, more discounts would inevitably translate into more sales for him, and therefore more commission as well, a point which I couldn’t let pass.  So, after some discussion, Toby agreed to increase Renault Croydon’s discount to me, in fact he increased it to the entire 7% discount that Renault Croydon got from Renault for each car.


Now the significance of this can’t be overstated because it meant that, by the time that Renault Croydon had given me all of its 7% discount, then paid Toby his commission on each sale, and also paid commission to his boss, Pam Hillman (who got a cut of each sale in the Corporate Sales Department), Renault Croydon would actually lose money on each car sold.


And the only way that Renault Croydon could possibly make up that lost money would be because the cars would still qualify towards Renault Croydon’s monthly sales targets from Renault UK .  Reach those sales targets and Renault would pay Renault Croydon a special sales bonus for each car sold.  Getting that extra bonus back from Renault for hitting the sales targets would put Renault Croydon back in the black on each car.  Miss the sales targets and Renault Croydon would also miss the bonuses and therefore lose money on every car sold.


So Renault Croydon now had to be pretty damned certain that the sales through the BALPA account would come in each month. 

If the sales suddenly dropped off then Renault Croydon could find itself having not only sold cars at a loss, but then not reaching its sales target, which would mean no bonuses from Renault. 

And that, in turn, meant real trouble, as Renault Croydon would never, ever, recover the money it had given to me on the cars that it had sold at a loss, so it would be well and truly stuffed.


Which meant that Renault Croydon had to do everything possible to keep the sales momentum going.  And, by the looks of it, if it meant turning a blind eye to what was really happening with the BALPA discounts, then the attitude of both Renault and Renault Croydon seemed to be ‘So what?’ 

Renault in the UK needed to sell cars to meet its targets from Renault France, Renault Croydon needed to sell cars to meet its targets from Renault UK and earn the bonuses that would turn the losses on each car into a profit, and Toby Johnstone needed to meet his sales targets each month to ensure that he and Pam Hillman got their commission cheques.


What a bloody Merry-Go-Round.  Not one that you’d want to try and jump off, that’s for sure.  Or stop, as the results would be quite catastrophic for everyone.  No sales means no profits means no bonuses.  Not for anyone.  Enough said.




So, armed with more discounts I took the hint and pushed on with selling even more cars for Renault and generating more bonuses for Renault Croydon, Toby Johnstone and Pam Hillman.  And the sales kept coming in and the Renault Merry-Go-Round kept turning, generating more and more sales.


But that must have upset someone.


Because a few months later I had a phone call from a worried Toby Johnstone.  He had just been phoned by Steve Wilson from Renault.  Steve was Simon Arnold’s eventual replacement and Toby told me that Steve would be calling me to ‘challenge the arrangements for BALPA’. 

It was a bit of an odd phrase for Toby to use, but Toby explained that Steve had told him Renault was concerned that cars bought through the BALPA account might be making their way onto car supermarket forecourts at prices undercutting Renault’s franchised dealers.  And that was a ‘No-No’.


Apparently a Renault dealer had heard about what was happening with the BALPA account and had complained. 

Now dealers don’t just get to hear about this sort of arrangement, someone must have tipped them off.  And that was most probably another broker like me who was buying cars from the miffed dealer and who was jealous about losing customers to me and so had put the dealer up to complaining about me.  A bit of a snake in the grass given that, whoever it was, he was almost certainly doing exactly what I was doing.  But knowledge on deals gets around the grey market in new cars fairly quickly, especially if a new kid on the block is taking customers off established suppliers.


And despite the number of cars I was selling, Renault couldn’t afford to take the chance of those cars ending up on the forecourts of car supermarkets where they might be spotted by its dealers.  That would have really upset the Merry-Go-Round ride.


But I hadn’t gone through my ordeal with Dopplegänger without picking up some lessons on what keeps the new car sales Merry-Go-Round spinning and I had already anticipated that Renault would want some assurances about where the cars were going.  Remember I said earlier that Dopplegänger would probably hold on to the registration documents for the cars he bought in bulk?  It’s known in the motor trade as ‘V5 retention’.


V5 retention is a charade to allow the manufacturer’s auditors to certify that cars bought by a fleet operator are still in the fleet operator’s possession.  It works because, if you have sold a car, you have to return the V5 to the DVLA so that it can be registered in the name of the new owner, after which a new V5 is issued to them.  So the auditors use the simple logic that if you still have the V5 then you still have the car.  I had simply done what Dopplegänger had done and I still had the V5s for all the cars I had sold so far for Renault.  I told Toby Johnstone, who said ‘You’re safe mate, let Steve Wilson see them and that will keep Renault happy.’


Sure enough, the next day Steve Wilson arrived and after the usual pleasantries he began asking questions about the steps I took to make sure that the Renaults I sold did not end up on car supermarket forecourts.


But, being forewarned by Toby Johnstone, I had already put together a file containing the V5s for every Renault sold so far.  So I showed Steve Wilson the file, put it on the table in front of him, asked if he would like a tea or a coffee and left him alone with the file whilst I wandered off to the kitchen and deliberately took my time about making drinks.


About five minutes later I returned with a tray of refreshments.  Now whilst I can’t say for sure that Steve Wilson had taken the opportunity to look at the file, let’s face it, who wouldn’t have done so in the circumstances?


Your bosses want proof that cars being sold at huge discounts from one of your client’s accounts haven’t been sold on to car supermarkets.  You are offered a file with all the V5s which would give a good indication that the cars haven’t gone anywhere untoward.  And then, despite being left alone with the file on a table in front of you for 5 minutes, you don’t look in it?


Nah. What sane and rationale employee would have missed the opportunity to take a peek in that file, especially someone supposed to be investigating allegations that cars were being sold by me to supermarkets?


Steve Wilson said nothing about the V5s when I got back with the tea and biscuits, but it was noticeable immediately that the tone of the meeting had changed.  The questioning from Steve stopped, instead we concentrated on what could be done to help improve sales and Steve offered even bigger discounts for more sales.  And so the speed of the Renault Merry-Go-Round was cranked up another notch higher.


But someone had it in for me.  And I needed to either find out who it was, or at least minimise the chances of the same thing happening again.


Now there’s an old adage in business.  It’s called the 'Eighty-Twenty' principle.  It’s based on the rather random rule of thumb that 80% of your business probably comes from just 20% of your customers, making not only them your most valuable customers, but also making you probably just as valuable to them, since they are probably placing a significant amount of their business with you and therefore don’t want their supplies interrupted.


And, conversely, perhaps around 80% of your customers generate only about 20% of your business, making them proportionately more expensive to deal with, perhaps even a lot more trouble than they are worth.


Today certainly seemed to suggest that.  I couldn’t imagine my regular broker customers wanting to upset their supply arrangements, but maybe somewhere in the 80% of the rest of the occasional buyers there was someone prepared to do just that if it meant that they could get rid of a competitor.


So I decided to dump the 80% and concentrate on the 20%.  If they had a vested interest in doing business with me then they would be far less likely to get up to whatever antics had brought about the day’s interrogation, even if it had all in fact been a sham, as Renault knew that the cars weren't going to BALPA members anyway, and surely the volume of business now being generated was more than Renault would have wanted to put in jeopardy? 

Or so I thought.


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