The above quote – often attributed to Albert Einstein – reflects a concept that can be applied to almost every business in the world. But, as with most things in life, there’s a catch! The optimal value of experience within any industry only lasts until there is a fundamental shift in the way the industry operates. If such a shift occurs, experience can actually become a liability.

Knowledge then belongs to those who are willing and able to adapt to the new way of doing business, and gaining a new kind of experience. The idea of hanging your hat on “20 years of experience in this industry” can become an empty measure of your knowledge within an industry that’s undergoing extreme change. The focus needs to become gaining experience, and therefore knowledge, within this “new world”.

There has been a paradigm shift in the used-car business regardless of whether we believe it, like it or accept it. The fundamental change that has occurred in the way the used-car business now operates is the result of the Internet. About a decade ago, the buying public started interacting with car dealerships in a different way. Previously, the buying public would first visit a dealership, and then decide what type of vehicle they wanted. Today, the buying public decides what vehicle they want, and then visits a dealership. Take a few minutes and really digest that shift.

This shift in the way that potential customers interact with a dealership means that all of your sales processes, marketing, buying and price strategies need to be revamped to serve today’s market. These changes become extremely difficult to enforce if the members of your management team have been in the business for more than 5-10 years, and have had some success under the previous business model.

The blinders are on, and it becomes difficult for those people to see what they are doing wrong – I’m talking about members of upper management that want the staff to work harder or spend more time training on the old ways of doing things, and members of middle management that try to buy vehicles cheaper and to change reconditioning processes to reduce costs.

Unfortunately, the majority of the time, the actions that these “experienced” members of your dealership take only speed up the decay of your used-car department – they do not produce positive results, and actually turn a lot of showrooms into morgues. You know what happens next, right? You’ve got staff sitting around with a lot of time on their hands, reminiscing about the good ol’ days, and complaining about how the Internet and other new technologies have ruined the business. Well, it doesn’t have to play out like that. I’ve been a part of dealerships, and have seen several dealerships, that consider the last three to five years in this business the best years ever – profitable, fun, and offering boundless potential for future success.

If you feel that your dealership or department is struggling to maintain the same numbers it produced 10 years ago, then here are some key areas of change that you can focus on:

■ Advertise your vehicles for what you would sell them for; don’t inflate.

■ Minimize transactional discounts. If you can’t attract a customer and sell a vehicle for really close to your advertised price, then the odds are that you are missing out on business.

■ Provide information upfront and make it freely available. Do not use information as a customer control mechanism or as power tool for negotiations.

■ Market each vehicle individually. Highlight each vehicle’s positive features with quality pictures and a compelling relevant story.

Making these changes isn’t complicated, but it will require hard work and discipline. All of this creates either an opportunity or a problem, depending on how you want to look at it. If your current used car manager is open to change, then you have an opportunity; if your used car manager is not open to change, then you have a problem. The majority of experienced used car managers have good skills that are, and will continue to be, an asset. If you can combine that with a solid pricing strategy, marketing approach, and sales process, all based on the new realities of the way the used car business operations, then look out – your success is limitless!

Remember, it all starts with you!

Richard Macdonald is the founder of RPM Solutions. Richard provides consulting, training and coaching services to new-car franchise stores to help them maximize their used-car department profits. For more information, contact Richard at (416) 894-1475 or richard@rpmsolutions.ca.