Marco Conti (CEO NSC) – Direct sales, people and going REALLY deep.

If you are a managing director, you have to see things as they really are. But people don't always tell the truth when you're the boss. Especially in large companies, too much openness and transparency can be detrimental to your career.

The following interview will therefore be different. 

The next person I'm going to talk to is Marco Conti. But that's not his real name. I have changed his name to protect his privacy: He says he is motivated by results, not by good publicity. He is the managing director of a car brand in one of the larger countries in Europe. He has had this job for over 5 years.

I asked Marco for an interview after seeing his quarterly management presentation. The figures on market share, turnover, order bank, dealers, profits and customer satisfaction were exceptionally good. So I asked him to share his insights with us. I was interested in what he believes and how that helps him run a successful NSC.

This image is AI-generated.

I always start with the same question: What is your dream car?

Marco Conti: It's my company car. I drive my dream car. But the answer is a little longer, Steffen. I'm not a car person. That's the whole thing. So, I don't have a dream car. I don't care what I drive, and I imagine I've only had one car in my entire life. That was the company car from my previous company that I bought. And funnily enough, that's exactly the company I work for now. 

And will it still be the car you want in the future?

Marco Conti: Yes. The car is just a means to an end. And I like the business and I like solving things. That's the whole thing. So, no dream cars. Sorry.

The last time we met, I was impressed by what you taught the team about your market. And your philosophy on how to run the market. You started as CFO and later took over as Managing Director.

Marco Conti : And the funny thing is, Steffen, that I didn't apply for this position. I never thought I would work for a car company. And I just got a call from a friend of mine. He needed a CFO. And I was part of the team for a few months. I thought I would stay here for six months.And here I am after ten years. That's life.

People sell cars to people, not the process.

What are your guiding principles for building and managing a market?

Marco Conti: It always starts with the people. I'm not a car person, as you know, but in the NSC (National Sales Company), in any car business, you need these car enthusiasts. It was the same in the previous company. We had the best people in the market. That was a telephone company. There are these fanatics, car fanatics and phone fanatics. Those are the guys you need. Those are the people you build on.

And of course there are other people too. It all starts with the good people and the team you have.

Steffen Szameitat: These are the people who aren't just motivated by money.

Marco Conti: Exactly. And that's the whole thing.Whatever you do, whatever team you have, money is a great motivator. If it's not enough, people get demotivated.Is it the only motivator? No.

You have to believe in what you're doing. Something bigger. We know that not many of us believe in God these days. But that was a particularly important thing before. What has remained: people love stories, we dream stories. We do it. And that's something you can use to motivate people.

You have to be close to people. And you create something that is bigger than yourself.That's what drives them, something they are incredibly proud of.

What is your role as manager of the team?

Marco Conti : My role is primarily to reduce stress. That's very counterintuitive to what all the other managers do. But some see business like McDonald's: the process is king. You change people like gears. It doesn't matter who they are. Leading is very simple.

Psychology is critical in shaping a sales team.

But in all industries that are built on human ingenuity, you have to think about people first. The employees, but also the customers, so I see things very differently. You get so many conflicting messages and stresses from the world around you. Setting goals doesn't mean fixing this, my job is to motivate people and keep the stress as low as possible.

They don't need to know everything. But they do need to know a lot. Because the other side builds trust and helps them to understand. My people know more than usual, I share quite a lot. So they know the context, but I don't expect them to know everything. It would be too much to know everything. I try to protect them from a lot of things.

Stress can be many things.Stress can be that you're overwhelmed with information, but stress can also be a challenge for people that they barely cope with. But then they grow, and they suddenly achieve it. So what is it, Marco?

Marco Conti: It's a lot of things. Life today is incredibly stressful, especially during the pandemic. Many people were at their breaking point. Some were beyond that. In our case, we supported people who opted for therapy, psychoanalysis. I can highly recommend it to anyone.

I myself had psychoanalysis for five years. I completed my psychoanalysis during the COVID period.Three months into COVID-19, I came to the conclusion that meditation and other measures of mental wellbeing were not enough. So I tried to convey this perspective.

I had a man in the management team. He was causing a lot of problems and it was getting worse. In this situation, we organized a two-day retreat with a famous psychologist. The only person who knew now was my HR manager. After two years and the two-day retreat, he started therapy. After a few months he stopped, and now he's back. He is so much better.

People have difficulties. Life is not always easy. But there is this perspective: it's not about you. Regularly we think that we are alone. That we are special. Funny thing I learned early on in my journey: I wasn't as special as I thought I was. A lot of people had problems. Everyone has different problems.

Even if you look at Elon Musk: This is one of the narcissists of our world. He's a great businessman. He's super great at everything, but he's a psychopath. He's a narcissist. A year and a half ago, I saw an interview with him and the TED Talk founder. There was this thing: when they showed what a good father he is. His five-year-old son sat on his knees like he was on his knees. At the end of the jump-off. He didn't hug him. They didn't hug each other. The distance between them was about a foot. And he looked at the guy and smiled.

I have kids, and that's not how you love your kid. You never sit on a lap with your kid and they don't hug you. Everybody has problems. And that's leadership: creating the team and going much deeper than the goals. Understanding personal challenges, going deep.

Elon Musk had this famous interview, and they stumbled on some kind of medical prescription. And then he mentioned that he suffers from depression.

Marco Conti : He is suffering.

Processes are for the average and underperforming employees.

Why do we have processes and systems?

Marco Conti : We need them. People are particularly important. But at the same time, we have a bell curve of skills that we have to take into account. When we talk about salespeople, there are these excellent people who have their own way of doing things. And they sell hundreds of cars. They are so good. And then there are "normal" people, the "average" ones and the "a bit worse" ones. And they need processes. When you run a big company, customers need to be sure about the level of service. And to achieve that, you need to train the salespeople. You just have to, you have to get that average that's high enough. And that's why you need these processes and systems. Take McDonald's: they're excellent at what they do, but there's not a lot of human interaction.

But in our business, you still need the interaction, because even a non-premium car is the second biggest ticket people will buy in their life. After house, apartment or whatever the mortgage is. In this case, it's all the same: customer relations and how the customer is treated. Even if they're not buying a premium car, but a normal car for the mass market. It has to be an experience.

If it's not an experience, will they come back to you? That's the question here. When you're selling something that's so important, someone's dream car. There are so many emotions for people in the whole car business.

But I don't have this fascination with owning a particular car.

Marco Conti: I don't have it either.

But to feed that emotion, to give customers a good service and keep costs down at the same time, you need to have a motivated sales team. You need to motivate the entire environment. Because the whole thing is interconnected. I don't think processes are important.

And now we have a digital world...

Marco Conti: But do we really have a digital world? There was this hype about direct sales. But even if you look at Walmart: Everyone is going omnichannel. Tesla is going omnichannel. Everyone is going omnichannel because that's the only thing that works. You have to unite both worlds: digital and people. Amazon is extremely focused on direct sales.

But there are also other companies, manufacturers or established companies. For them, the retailer network is now a great asset. The question is how they use the asset.

And that is always a balance.

Take Apple, for example. Apple is an excellent business. But they don't treat their suppliers well, they twist their arms until they can't do it anymore. Hardware manufacturers, app developers, for example. And now they have a huge backlash. Apple was always the underdog, compared to Microsoft for example. Now they are no longer the underdog. Now they're the bull in the china store. They are big. They should be incredibly careful and handle this position responsibly. Because there is always a tipping point. As manufacturers, we have a responsibility to the whole environment. And if you push too hard, it can take a year or two for something to break. And the business no longer works so well.

That's the balance.

At the same time, the partners, suppliers and, in our case, the dealers also expect everything to run according to the rules. That's how you build trust in the system. In the perfect world, you don't earn 100% yourself at the expense of your partners. You aim for 80 %, 90 %. And that way, both parties earn more money in the long run. If you push too hard, if you fight too much, you reach a tipping point faster.

Of course there are some conflicts, and that's normal. But we are the leaders. We are leaders for the dealers and we know how to create value. Of course, they are company owners and know what they want. But leadership and trust are key everywhere.

Product, processes and systems are important - good people are the most important thing.

Imagine we have a deck of cards. There is one card that is "Product". You have another card "People", then "Dealers", "Processes" and "Systems". Five cards. Sort them in order of importance!

Marco Conti: An incredibly good question. The product is something we don't have much influence over. It's like anything that's on the road now. Or a new product that came onto the market five years ago. Product is important.

But if you have good people and you have good processes, you can still sell, even if your product isn't top notch, if you build the other stuff. You don't have to be the best product. With all products, there are some compromises. There is nothing perfect. There is no ideal product.

It's all in the balance.

People are particularly important. I mean, everything is important, the retailers for example. Everything is interconnected. Retailers also have people, processes and systems that are crucial. If you don't have them, you're going to suffer anyway.

Of course, depending on the size of your turnover: If sales aren't big enough, then you can get by without a system. But at the end of the day, it comes down to having the best people. Because if the product is poor, if the systems are absent, if the processes are absent, you're not going to be successful so far. It's all connected.

The ranking can be different for each market and each NSC. This is because there are some idiosyncrasies that vary from country to country. The cultural differences are significant. There are many things that are just a little different. For example, the control over the dealer systems. They have to have the same dealer management system so that they can control them. They have to have the same websites and the same marketing campaigns. These things are not easy to fix.

But of course you look at certain situations and see where you have the biggest gaps and then you try to fill them. However, in most cases, the system usually comes from the manufacturer's headquarters. You can only optimize it a little bit. Some of the systems have to support local processes. Almost 100% of the product is at the manufacturer's headquarters. And guys, you always try to get the best people, and that's what you strive for.

The optimal length of stay for an MD is 5 years.

"Taking the stress away" means keeping the focus. Give people the freedom to concentrate on the task at hand.

Marco Conti: That's right. At the same time, you need the goals. You need the time and people need the goal. Salespeople need to know the price of the cars they have to sell, for example. Otherwise, they sell for the minimum price and still receive bonuses.

The same applies to retailers. Importers have to manage it, and there is still a lot of stress involved. And that's why you have to take the stress. Because stress is inherent in the system. There is no other way.

The Managing Directors are seconded from headquarters. Usually for 3 years.

Marco Conti: There is a big misunderstanding, especially at OEM level. Wholesale business means that you sell to dealers and don't take care of the end customer. But that is not the case. If you don't take care of the end customer and only sell to the dealers, you will never be successful. The wholesale business, as it is called, is a misleading name. I don't care about selling to the dealers. That's not selling for me.

The end customer, that's the most important thing. Because even if I tell the dealers how many I'm ordering in stock for a month, perhaps because the credit limit is big enough with wholesale financing, those cars haven't been sold yet.

The wholesale business is not a wholesale business. It is a direct retail business. And if you don't think about it that way, you're not going to succeed. There is no other way. We're lucky that we have a dealer at NSC. We sit above the dealership. We even look after them. They run independently of each other. But I know the dealership business inside out. I know how it works.

That's important, because it's a crucial part of our business.

What is a good tenure as a management team? Establishing the right focus for people in a market as Managing Director, the right balance between product dealers, systems, processes, etc.?

Marco Conti: Good question. The biggest issue is that the position of Managing Director is a stepping stone. It's not the end position. As a rule, you get a three-year contract. So you get there, you come from the outside. You don't know the market. You're an outsider, you're the stranger. You don't know the details.

Then you have to rely on exceptionally strong local talent. The CFO must be a partner. It has to be a long-term CFO, for example. You must have a strong sales manager who has also been here for a long time. But then they both know that they will never get into that position. That's why you won't be able to keep the best people. Because the best employee will have other ambitions. Because sometimes they want to be the managing director in the future. If you're busy all the time becoming an expert in the market yourself, then you basically don't get the best people at management level. And that's one of the problems.

Another problem is that you don't understand the business in detail when you come for a year or two. Normally you have no idea how commercial things work. But you have to know the whole business, and you have to know the intricacies and everything. I'm not saying it's rocket science. It's not overly difficult. But sometimes these ridiculously trivial things that you can't see are hugely important. You're there for a year. And you're trying to do it the right way. Can you gain the trust of the retailers? I doubt it, but it's possible. But then another year is gone. Then the third year, and you're looking for another job because your contract expires.

That's simply not sustainable.

If we want to achieve excellence, I think five years would be a minimum in such a scenario. When I look at MD values, the best ones are usually local and long-standing employees. So sometimes they run the business for ten or 15 years. They are usually the best because they know it so well.

Another thing that's extremely dangerous is when you're a new guy: you want to prove that you're better, that you do something better. We can do a lot of stupid things, short-term things that look good on your resume but hurt the business because you're going to be gone in three years anyway, so you don't care about the long-term.

He had this success, he got into this market and increased sales by 20%. But what did he do to get that 20%? It's not that difficult to increase sales by 20% ... I call them drugs, like discounts, lessor fleets, selling return fleets externally etc.

You do it anyway. And now, because you've done it, you can't get away from it. That's why I call it drugs. Because you won't get off them, because your sales would drop immediately. For a short time. I call them drugs because they hurt your long-term business. They hurt retailers because you undermine them. They create competition that isn't necessarily competition.

When you sell batches of cars to the finance providers, you're not selling insurance, you're not selling finance. You're not making money on those cars. Regularly they are not serviced in your dealer network after the warranty. Over time, you lose a lot of business. It's only a short-term solution.

Most CEOs in the automotive industry are engineers. They don't know much about sales. What are the messages you would give them?

Marco Conti: Engineers are not primarily concerned with people. But the whole sales business is all about people. And that's one of the messages.

The other message is about understanding the customer. We need to think differently about direct sales. Why direct sales? An important assumption is that every customer likes direct sales and that they will set a price. But the thing is, with a price, when you're selling cars ... We've talked about that. It's all about brands and it's all about emotions. If you don't understand people's emotions, you're not going to sell the cars. But emotions are stimulated by the perceived value of a purchase.

Let's say we sell a car with an RRP of €50,000. We sell this car online for €40,000. And then there is a competitor who has the RRP at €50,000 but also sells it for €40,000. Only he says to the customer: "You get a 20% discount." What does this customer think? The perceived value of the car is not €40,000. But for our direct customers who buy the car for €40,000 directly, it is. For our competitor's customer, the perceived value is €50,000 and he is convinced: "I got the better deal."

So, what would you do? Which car would you choose? 90% of people would obviously go for the €50,000 car because it's worth €50,000 and they're buying it for €40,000.

And that's one thing that direct sales don't do so well.

The Nike store went completely direct. They cut a lot of retailers. They cut retailers all over the world. And now they're going back to the old model. They have to.

There is no magic bullet. There is no such thing.

Steffen Szameitat: Thank you very much, Marco. I wasn't expecting this detailed and open interview. This will hopefully stimulate many discussions in many markets across Europe. Thank you very much, Marco, for sharing your insights and experiences with us.