Competition is fierce in Australia's motor vehicle market. Consequently, Toyota Australia, a market leader, is working to boost sales by improving its customer prospecting.
Using a range of applications from location-based solutions and services provider MapInfo, Toyota Australia has created an online mapping system that offers dealers a graphical depiction of motor vehicle sales within their individual sales territories or prime market areas (PMA). The system also enables Toyota Australia to analyze sales performance on an overall, regional and dealer-specific level.
"The result is an accessible and easy-to-use prospecting and business intelligence tool," says Garry Hora, Toyota Australia's national sales operations manager. "We had our strongest second half on record, which was at least partly attributable to our deployment of the mapping system in July. Second half sales put us over the top to beat out GM and win the number one market position for the year."
Too Much Paper, Too Little Time
Australia is Toyota's second largest market, after the United states. An estimated 787,100 motor vehicles were sold there in 2000. Toyota accounted for 158,908 or 20 percent of the sales.
Toyota Australia, a subsidiary of the Japanese auto manufacturer, sells commercial and passenger vehicles for export and import sale via 250 franchised dealers overseen by Toyota's Sydney-based sales and marketing headquarters. The company's administrative and manufacturing facilities are located in Melbourne.
Motor vehicle dealers in Australia historically have had a single, unwieldy source of market information: the industry's monthly report, V-Facts, a thick paper stack of motor vehicle sales data. Owing to its density and delivery format, the document is not for the faint-hearted or time-pressed. "Dealers are entrepreneurial. They are generally not inclined to go through reams of paper," says Hora, who ran a dealership earlier in his career. "So prospecting has often been untargeted or based on assumptions about market and buyer characteristics, rather than actual knowledge."
Hora became convinced that a simple, visual presentation of sales data and customer demographics would enhance prospecting. He keyed in on mapping technology as a way to liven static information. Hora immediately noticed a few vital design points: the technology needed to be Web-enabled, easy to operate with minimal training requirements and highly adaptable to meet the evolving needs of dealers and the organization.
A New Unit of Analysis: Location
With this vision in mind, Hora approached Cameron Townshend, of Cameron Townshend Consulting, to architect and implement an online mapping system. Hora was familiar with Townshend's work from a previous consulting engagement. Townshend in turn chose MapInfo as a software partner based on recommendations from existing users.
MapInfo, headquartered in Troy, N.Y. with worldwide subsidiaries, including in Australia, offers location-based applications such as mapping, spatial analysis and geocoding (matching addresses with geographic coordinates) that can enrich an organization's front- and back-end CRM analytics. The company is a leader in the space, together with Oracle and Facet Decision Systems, according to the business/technology analysis firm IDC. Indeed, MapInfo represents part of the fastest growing segment of the spatial information management market. IDC expects it will reach $2.1 billion in 2004. MapInfo customers encompass telecommunications companies, government organizations, financial services firms and retailers.
The aim of location-based applications is to furnish companies with another set of data points descriptive--and predictive--of customer and prospect behavior. In this respect, the software is "different from and incremental to more traditional geographic information systems (GIS) that typically do not attempt to use spatial information to address non-spatial issues," explains Henry Morris, vice president for IDC's data warehousing and information access program.
"If you think about it, location is a fundamental organizing principle of the real world, so it makes sense that it should be a key way to organize information systems," Morris says. "Moreover, spatial information used in conjunction with other types of customer data can help organizations find and develop customers, assess the profitability of transactions and analyze trade areas."
Building a Better Set of Requirements
Toyota's online mapping system took nine months to build, and cost a total of $192,763. Townshend worked with another full-time systems integrator and utilized contractors, as well as MapInfo consultants and partners. He designed the system around five MapInfo products. MapInfo Professional enabled Townshend to create maps and color code areas of the solution. MapBasic offered a tool for capturing postal code areas and creating each dealer's PMA. MapXtreme for NT allowed him to construct Web pages and jpeg images of the maps. MapInfo Australia streetWorks helped Townshend populate his maps with business and residential data, and MapInfo's geocoding software delivered the capability to flag individual buildings and residences.
Early on, Toyota faced the task of gathering specific requirements to guide system design. "Because there were no existing paper processes--the V-Facts was a document, not a process--we had to develop a whole new methodology. For the beta version, this entailed a great deal of whiteboarding time." Townshend says.
Enabling dealers to see the performance of their own PMA was a key requirement that emerged from the whiteboard discussions. "Dealers have exclusive rights to their PMA--it's part of the franchise agreement. So it's critical that dealers can access an array of sales information at that level of specificity," Townshend says. "It's also important that individual dealers are confident their PMA is not available for viewing by other dealers. Each dealer logs on using his or her own user name and password."
Another security-driven requirement was the decision to deliver the mapping system via the Toyota intranet, Townshend says. Other requirements spelled out what types of data dealers would be able to access, such as vehicle characteristics and competitor sales, and how to maximize user-friendliness and minimize keystrokes.
Since Toyota's system was deployed last July, dealer reaction has been positive. "We demonstrated the solution to dealer sales managers and got good feedback from them," Townshend says.
Early Results and Further Challenges
Toyota's mapping system has already significantly improved the prospecting capabilities of dealers, Hora asserts. "Dealers can see numbers of vehicles sold by their franchise and by the dealerships of competitors within their PMA. They can drill down to view types of cars, price points, market shares, buyer profiles and competitor analysis information," he explains. "It's a great step forward from a ream of paper used mainly to keep the door open against the wind."
Hora admits that it's difficult to gauge ROI on something like this. He points out, however, the company's sales performance offers a reasonable indicator of dealers' prospecting success. He gives at least partial credit to the mapping system for generating a record-breaking sales volume during the second half of 2000--93,894 vehicles sold between June and December.
still, Hora and Townsend emphasize that it's incumbent upon Toyota to find ways to further the benefits of the new system. To this end, version two is in the works. "Version one focused on pricing and market information," Townshend says. "Version two allows us to work even more on building out sales force automation and prospecting tools."
One key way in which Toyota is attempting this is by linking the mapping system to customer databases within the larger organization. For example, Toyota's fleet department maintains a database of customers that buy two or more vehicles per year.
"If dealers were able to access information about these fleet buyers, they could approach the customer early in the sales cycle, before the fleet was ready to roll over," Townshend explains. He acknowledges that there are customer ownership issues on both sides. "Dealerships are reluctant to release their customer information to headquarters, just as the fleet department is hesitant to make its data available to the dealers."
Another important feature of version two will be enhanced drill-down. "One of the innovative aspects of the solution is its layering of information," Townshend says. "Dealers will see their individual PMA, district sales managers see the half dozen or so dealerships within their district, and headquarters can telescope between the macro-picture and the nitty-gritty."