A penny saved is a penny earned. It’s an old saw.
But Toyota Financial Services (TFS) is giving it a new twist that’s already helped the company reclaim more than 6 billion of those little copper coins during the current fiscal year.
This organization-wide effort is known as “Drive to Five,” which refers to the goal to reduce credit losses from $615 million to $500 million. The campaign, now just past the halfway point, is on pace to exceed its target.
“This is a huge undertaking, by far our largest since the financial crisis hit in 2008,” says Mike Wells, group vice president of Service Operations. “It’s a team effort and everyone is involved. The entire organization is rallying around this single cause.”
To rev up team members, TFS management adopted a NASCAR-themed internal marketing push. So, for example, Monster Energy NASCAR Cup team owner Joe Gibbs and standout driver Kyle Busch have delivered motivational messages via video. And, if they hit their numbers, team members at TFS’ Customer Service Centers around the country are being rewarded with tickets to NASCAR races near where they work.
“Helping out with race tickets and track activities to support the ‘Drive to Five’ effort has been a lot of fun,” says Ed Laukes, group vice president of TMNA Marketing. “For most TFS team members, it’s their first time to a NASCAR event and an experience that will last a lifetime.”
Stephen Sanchez, TFS Planning and Support national manager, says “Drive to Five” is putting the pedal to the metal in four primary areas:
- Increasing staffing for higher volume—Industry wide, more customers these days are struggling to make their car payments. That requires more follow-up to try to manage such accounts in hopes of minimizing losses. So TFS as well as some of its business partners have added more staff to meet the increased demand.
- Investing in training—At the same time, TFS has rolled out advanced collections training designed to maximize the effectiveness of those interactions.
“We train new hires,” says Sanchez. “But too often, additional learning only happens on the job. So we brought everyone off the line, in shifts, for two days worth of refresher courses. It can be an expensive proposition. But the improved performance is more than making up for the cost.”
Winning Combination -- These team members (and their guests), all of whom work in the TFS Customer Service Center in Owings Mills, Maryland, gather with NASCAR Camry driver Denny Hamlin (center). They earned the opportunity through their contributions to the "Drive to Five" campaign.
- Offering targeted incentives—Much like in a sales environment, Sanchez says collections team members achieve more when given the opportunity to earn rewards for meeting if not exceeding their objectives. As with the training, such incentives require additional investment. But, so far, there’s been a big net positive return.
- Improving processes—In keeping with kaizen, TFS constantly looks for ways to improve the way it does things. This focus on collections uncovered several opportunities, most notably the steps team members take when a customer is on the brink of having their vehicle repossessed. Before “Drive for Five,” such a customer had no recourse. TFS would pick up the vehicle and sell it at auction, usually at a significant loss.
Now, if the customer comes up with a way to bring the account back to current, TFS will let them keep their vehicle in hopes that they’ll fulfill their obligations. Losses are minimized and customer relationships remain intact, perhaps leading to another loan or lease further down the line.
Meanwhile, Sanchez says TFS has begun to pilot test a program that sends text messages to customers who are two days late on their payments. The system makes it easy for these customers to make one-time payments and get back on track simply by replying to the TFS text.
Halfway through the fiscal year, TFS had spent $5.7 million implementing these and other changes. That sounds like a lot until you learn that the campaign has already generated more than $71 million in savings.
“Every dollar we save today will be one more dollar in profit when we total up the numbers at the end of the year,” says Anna Sampang, vice president of Service Operations Strategy. “While ‘Drive to Five’ is meant to run its course through March, we’ll continue to look for new ways to invest in our people, technology and processes going forward. Everyone in the organization is committed to moving in that direction.”
By Dan Miller