Follow the Leaders Interview with Compli President and CFO Lon Leneve | Compli.com

Follow the Leaders Interview with Compli President and CFO Lon Leneve

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Article: Follow the Leaders Interview with Compli President and CFO Lon Leneve

Article Date: Wednesday, January 2, 2008

Article Source: Automotive Digest, January 2008

Interview-with-Lon-Leneve-in-Follow-The-Leaders-Section-of-Auto-Digest.pdf

FOLLOW THE LEADERS INTERVIEW

with Lon Leneve, President & CFO of Compli
Automotive Digest - January 2008
www.automotivedigest.com

STRATEGY & COMPANY MISSION

What are now the basic strategy and mission of Compli?

Strategy: Focus... focus... focus, and that focus is aimed specifically at auto dealers. We consolidate content and automate the logistical requirements of compliance at dealerships. We launched this strategy in 2005 because we determined that automobile dealers have the most compelling need for our product, and by doing so we have been able to quickly move from being general compliance experts to experts specific to the dealership industry. This strategy has served us and the dealers very well.

Mission: To help auto dealers effectively manage risks within their company’s complex regulatory, legal and operational environment by automating the requirements of a “good-faith” compliance effort across the entire dealership. Dealerships are amazingly complex, dynamic organizations and they face a myriad of compliance and operational issues. For example, they have a 52 percent employee turnover rate, deal with the public on very expensive and emotional transactions, and face many of the same regulations as banks due to their financing practices. Yet, while many of the requirements are similar, dealers don’t have the compliance infrastructure or typically provide the resources that is prevalent in the banking industry. As a result, huge exposures have developed in the typical dealership, and Compli’s mission is to help dealers shore up their compliance capabilities and avoid regulatory and operational pitfalls. Big picture? Our mission is to protect them in the face of rising requirements and litigation, and to do so in a manner that is very economical in the sense of providing them a return on their compliance investment.
 

MARKETING OBJECTIVES AND OPPORTUNITIES FOR 2008 & BEYOND

What are the focused sales & marketing objectives for Compli in the next year?

To leverage the value we’ve created in terms of brand awareness and market penetration. With clients in 30 states, representing 450 dealerships and a total of about 37,000 dealership employees using our system, there’s a lot of momentum. We’ve also experienced a 95 percent renewal rate, which tells us dealers recognize great value once they employ the system. We want to leverage this growth. We’ve taken the various content areas of compliance and, working with key subject matter experts in the industry, we’re tying all the key elements together. This approach creates unexpected opportunities for dealers to not only protect themselves, but also eliminate significant costs and inefficiencies in administrative areas, plus greatly reduce claims exposures and, in a number of cases, drive down their cost of insurance. In short, we want to expand awareness, continue to create client success stories and repeated- ly demonstrate and deliver our unique value to dealers.
 

MARKET OPPORTUNITIES AHEAD IN 2008

What do you see as Compli's biggest opportunities in the next year?

The biggest opportunities for Compli involve leveraging our progress from the last three years. We have the deepest market base and penetration in the industry. When it comes to experience in compliance management software and content, we have a competitive advantage in developing and validating new compliance initiatives when new regulations such as Adverse Action, “Red Flags” and Car-Buyers Bill of Rights come out. Word of mouth is huge in this industry, and we’re blessed to benefit from this phenomenon as dealers continue to share these new compliance best practices with their peers. And, many of our clients are using our compliance system in new and interesting ways which, again, leads to their taking Compli as their best practice to their 20 Groups and demonstrating its value. Our objective is to leverage these creative uses, success stories and opportunities to further develop product enhancements and significantly drive market penetration.

Another huge opportunity that we’re in the middle of right now is what we call our SME strategy (Subject Matter Expert). We are very fortunate to be able to work with many of the industry’s key experts, including law firms like Hudson Cook, Fisher & Phillips and Venable and advisory and accounting firms like Auto Advisory Services and Dixon Hughes. We have added or deepened many of these relation- ships recently to greatly expand the subject matter content that will be made available through our system. We spend a lot of time talking to dealers and listening to their needs, and providing a deep level of content and prioritizing what they need to focus on are paramount. Our job is to deliver what they need, and we take pride in our ability to do that.

A third area of opportunity this year is to demonstrate and increase the awareness of compliance management in the insurance community. Compli’s product is a very effective loss control and risk- management tool, as well as, a compliance management system that gives dealers unprecedented visibility into their areas of liability. It creates the ability for dealers to predict and prevent problems. We want the insurers to recognize the loss control benefits of dealers who utilize a comprehensive compliance management approach, which results in dealerships being better protected and should result in lowering their cost of coverage. Several of the more proactive carriers are taking notice, and we are working with them to see what common opportunities and value we can bring our mutual clients.

MANAGEMENT CHALLENGES

What are the major or specific challenges for Compli's management team in 2008?

The biggest challenge is to have the discipline to say "no" to numerous opportunities. The success we’ve had in the auto space has led to an accelerating number of situations that we could explore. Examples include offers to work together in partnership, product and/or distribution situations. As a relatively young but focused company, we need to carefully select our priorities and make sure we don’t become too diluted by trying to do too much. It gets back to our strategy of focus by being very selective in what we do, and then doing it very, very well. While some may say having too many choices is a good problem to have, it’s really does take a lot of discipline and oversight to avoid the temptation of taking on too much.
 

INDUSTRY & MARKET SITUATION

What is your assessment of the automotive market and the industry right now?

There are some challenges right now. Sales are down, for the first time in over a decade, and dealers, especially the domestic brands, are feeling the pinch. We’re seeing more consolidation in the industry and a higher number of dealers shutting down. The sub-prime issue has also affected the market, so there are several key areas of concern that dealers are wrestling with. We try not to over react, and frankly we believe what we do is even be more important in tough times as employees and consumers may be more stressed than normal, which can lead to increased actions against the dealers. What works in our favor in this environment is that dealers are also aggressively looking for operational areas to improve performance, reduce costs and contribute to the bottom line. Our system can help accomplish those things. We are perfectly suited to help them control costs in key areas that historically have been considered non-controllable expenses, and the opportunities are immense. Dealers can improve their employee retention, eliminate costly paper processes, decrease workers comp and other insurance claims and, over time, improve their overall insurance costs. These are incredibly expensive areas that until now have been difficult to address, but with an effective compliance platform in place dealers are, as we speak, creating unprecedented improvements in these areas.
 

MOST SIGNIFICANT ACCOMPLISHMENT

What has been Compli's biggest accomplishment in the past year?

We've had many important accomplishments. We've done some great things with respect to our product, market penetration, and customer service and client satisfaction. We have the 95 percent retention rate I referred to earlier, an outstanding reputation, we’re working with many of the key players in the industry, and we benefit from rapidly growing brand awareness within the marketplace. I will speak to them each individually.

On the product side, we have an outstanding software development team that has, in our last release, greatly enhanced our reporting and system management capabilities. By working with our compliance and content team, they are currently coordinating our next release, which will include a massive new level of expert content that will deliver what the dealer’s have been telling us they need. This “turn-key” approach will be a huge advance in compliance management.

On the market expansion side, we’ve opened up the Texas market and have been very successful in a short period of time. We have a strong sales manager there that comes from the auto space who has done a phenomenal job. We’ve also employed very strong sales associates for our Midwest and Northeast territories to balance the successes we’ve had in the Northwest, Southwest and Southeast.

On the customer service front, we have many happy clients who are seeing significant improvement to their bottom line and vastly increased protection of their business. In the end, we offer our customers protection, productivity and profitability, and based on our customer’s feedback, while improving profits is important, they most value the protection and “I-can-sleep-at-night” factor that our system provides.

In summary, what Compli brings is a solid team of compliance and risk experts, account management and professional services reps that, when delivered by superior web-based technology, provides enterprise-class service and value. We have a true sense of caring about meeting dealers’ compliance management needs, and we absolutely love serving this market.