In this week’s Think Tank Tuesday video, Paul Potratz, of Potratz Advertising, highlights what he calls the new tactics of Guerilla Marketing for sales people.
He breaks it down into three strategies.
No. 1: Facebook involvement.
Potratz says to really engage, salespeople must enact 20 “touches” on the social media site per day. This can be broken down in different ways. For example, connect with 10 people; write five posts on your page; like a few posts on other pages, etc.
No. 2: YouTube
Potratz encourages salespeople to post at least five videos every week. But stay away from sticking to sales pitches, and make videos more personal, said Potratz.
No. 3: Email marketing
This is still just as important as it was a few years ago. Potratz said salespeople should be sending out email marketing every three weeks.
For more on these three marketing strategies for salespeople, see the latest video report.
Earlier this morning, I heard a robin singing outside our house.
I listened a bit and smiled. The robin’s basically making his play for the summer. Hopefully, his song will attract a suitable mate. They’ll start a family and we’ll have a few more birds around here.
But it also occurred to me that the robin’s efforts to woo a mate are similar to a temptation dealers face as spring approaches: Should I beef up my used vehicle inventory to set the stage for a strong selling season?
In fact, I received an e-mail the other day from a used vehicle manager who’d just started at a Buick/Cadillac/GMC dealer in the Midwest. He wanted my advice on how best to increase his inventory from 80 to 110 units to help drive his sales volume in the coming months.
I offered three pointers that I believe are relevant for all dealers as their instincts urge them to stock up inventory for the spring:
1. Examine your current turn. I asked the manager for the department’s current inventory turn, which runs about seven times per year. I then stressed that adding more units to this level of inventory velocity would only exacerbate an existing problem: He has too many aged vehicles on the ground today. Adding more inventory would only make it more difficult to get rid of these aged units and might, in fact, increase their number.
I told the manager that he would need to endure some short-term pain (and heat from the dealer) as he cleaned up the mess left behind by the prior manager. This clean-up effort, I advised, would expose retail and wholesale losses that, while painful, are necessary as a first step toward achieving the 12-times inventory turn benchmark.
“I understand, Dale,” he says. “My inventory must be clean before I can run lean and mean.”
2. Know your true capacity. A decision to increase used vehicle inventory, and maintain a minimum 12-times annual inventory turn, means more work across the dealership. More cars to acquire. More cars to recondition. More cars to photograph and merchandise online. More cars to price and promote. More cars to efficiently retail with customers. More deals in F&I.
Furthermore, all of the additional work must be done in a timely fashion—or you risk turning the additional inventory into your first wave of aged units.
For all of these reasons, I advise dealers to build inventory levels based on an honest assessment of what your dealership can efficiently manage. In most cases, this assessment translates to decisions to add inventory in three-, five- or seven-car increments, and adding more only as the dealership’s capacity remains consistent.
3. Prepare to stay the course. More cars in your inventory means more risk from setbacks—whether they come from internal factors (as noted above) or external factors, like a decline in consumer demand and sales due to weather, an economic change, etc. It’s often tempting for dealers to use such setbacks, particularly if they involve pressure from the dealer to increase front-end gross profits, as excuses to slow their inventory turn.
When these situations occur, I advise managers to do their best to maintain the minimum 12-times/year inventory turn benchmark. A slower pace may satisfy a dealer’s desire for increased front-end gross profits, but it will cause the number of aged units to grow—possibly setting the stage for another painful inventory clean-up effort.
In addition, a slower pace of inventory velocity diminishes any efficiency gains you might achieve across all dealership departments, and saps the “total gross” opportunity the added inventory is supposed to create for everyone.
Ultimately, dealers and used vehicle managers should recognize that the decisions they make about inventory today, as spring approaches, will have the same impact as the decision the robin outside my window makes about its mate: If you get it wrong, it’s going to be a difficult and potentially painful spring and summer.
Dale Pollak is the founder of vAuto. This entry and Pollak’s entire blog can be found at www.dalepollak.com
It’d be safe to bet that 2015 will be a good year for dealers.
The forecasts are rosy: The consensus among analysts is that dealers will likely retail around 17 million new vehicles this year, a tally the industry hasn’t seen since 2006.
Generally speaking, you could say that all boats will rise for dealers as the tide of new vehicle sales continues to swell.
But some dealers will do a lot better in this positive retail environment than others.
Their advantage will come from two primary factors. First, these dealers will work hard to claim their fair share, if not more, of increased new vehicle market share and sales volumes. But more importantly, the dealers will also deploy an operational strategy that emphasizes efficiencies to increase the margin they make on the sale of every vehicle, and help them sell more new vehicles in less time.
I believe this efficiency-focused strategy will provide a keen competitive advantage for dealers who adopt it. That’s because these dealers will be proactively managing the market forces—such as increased factory incentive spending, a higher level of pricing transparency, and a greater hunger among dealers to sell more new cars—that continue to compress the profit margin potential on every new vehicle.
The efficiency-focused dealers tend to apply this strategy to three key areas of their new vehicle operations to maximize sales and margins:
Stocking new vehicle inventory: The dealers base stocking decisions on market data that instantly shows the vehicles on the ground in their markets, and the specific cars/colors/configurations that buyers want the most. With these competitive insights, the dealers gain inventory and margin efficiencies as they consistently acquire vehicles that will sell quickly and pose less, if any, risk from interest expense.
New vehicle pricing: The dealers understand that most buyers are at least aware of the fair market asking and transaction prices, given the time they typically spend online to figure them out. By applying this knowledge to their new vehicle pricing online, dealers gain a larger share of interested buyers because asking prices fit their expectations for a deal. In many ways, the emerging science of market-efficient new vehicle pricing follows the same principles dealers have applied in their used vehicle departments.
New vehicle purchase process: When dealers stock the specific new vehicles buyers want, and offer prices the market validates as fair and reasonable, a good thing happens in the showroom: It’s a lot easier to come to consensus with customers on a deal. Efficiency-minded dealers apply this reality as they reinvent their sales processes to minimize discounts and negotiations, and shrink the time it takes to close a deal. The dealers view such sales process overhauls as necessary to maximize their front-end profit margin and the productivity of individual sales associates, while making it more easy and efficient for customers to purchase cars.
Some progressive and tech-savvy dealers are going even further in their efforts to make purchase processes more efficient. They are changing their websites and new vehicle listings to make both more transactional, rather than informational, in nature. The end goal, of course, is to facilitate the efficient purchase of a vehicle while maximizing the margin on every sale—gains that flow, in part, by allowing technology and tools to perform elements of a transaction that have traditionally been handled by highly paid personnel in the dealership.
It should be noted that dealers making these efficiency-focused operational changes are doing so at a time when they really don’t have to. They could simply continue doing business as usual and close out 2015 with decent results in their new vehicle departments.
But decent isn’t good enough for these efficiency-focused dealers, which is why I think they’ll have a better year than their less-efficient competition.
Dale Pollak is the founder of vAuto. This entry and Pollak’s entire blog can be found at www.dalepollak.com
Anyone in business has problems with employees, but for auto dealers, employees in the detail department are a major problem. It is always a problem to have incompetent employees, but in the detail department, it is worse because of the importance of used cars to the dealership’s bottom line profit.
It seems that the common complaint voiced by most dealers is the quality of the employees willing to work in the detailing department.
The first issue is that there are simply not enough skilled technicians in the detail field. There are those who have detailed cars, but not enough with real training.
What’s the Answer?
It begins with management. First, you must take a hard, close look at your present employees and their behavior. And then, establish some standards for the type of employees you want in the department.
This simply is not done in most dealerships when it comes to detail employees. The bar is set so low that almost anyone who says they have detail experience is hired.
The big error is looking for people with good skills. Do not look for people with good skills; hire people with good values and teach them the skills. The biggest mistake a dealer can make is to hire experienced detailers (Call me, I’ll tell you why).
Employee Attitude
As anyone who hires employees knows, they are strange. They are people. Some good, some average and some, unfortunately, bad. Based on this, you can bank on that one-third of your present detail staff might not be doing the job. And, with detailers it might be over 50 percent.
Consider a moment the complaints you have about your detail employees? Tardy, continually absent, misuse of equipment, indifferent towards the quality of their work?
Poor attitude is one of the biggest complaints we hear dealers voice about their detail shop employees.
Employee behavior will vary from day to day, month to month. Like equipment, employee attitudes are subject to wear and tear. Therefore, you need to be on guard and watch for this and be ready to repair and replace as needed. Few, if any, dealers really monitor their detail employees.
As a good employer you must know the likes and dislikes of your employees. This will allow you to convert some marginal individuals into better employees.
Don't take employees for granted. No one, in any position likes to be taken for granted. Keep communication lines open. If you give them some responsibility, make sure it is clearly defined.
As has been stated many times, “there are no bad employees, only bad bosses.” A good boss will not permit a bad worker to work for his business.
I guess there must be a lot of bad bosses in dealerships, because there are a lot of bad detail employees. Why is that I wonder? Do you wonder, too?
Employees Are Human, Too!
Employer-employee relationships are not one-sided. The employer must realize that his employees are human, so treat them with respect and compassion.
If you ask most detail line employees how they feel they are treated by employers, you will find the responses very interesting.
Put yourself in your employee’s shoes. Evaluate how they must feel about the way they are treated in your dealership.
If you want your detail employees to improve, to take an interest in the job they do, then ask them how you can improve working conditions to help them to do a better job.
In my own personal experience I found that must dealership detail employees wanted the following:
- Respect
- Better equipment to make the job easier and faster
- Clear job descriptions
- Extra pay for overtime
- Profit-sharing
- Medical program
- Paid vacations and sick leave
While this may seem costly, if you want to have good detail employees, you have to “raise the bar” and do for them what any good employee would demand of an employer. If an employee is not interested in these things, you should not hire them; they are more of what you complain about now.
The cost to have employees feel secure in their jobs, a security that generates an attitude to go beyond what is expected, is minimal compared to the benefits.
Pay Makes A Difference
No matter how you want to justify it, excuse it or deny it, the facts are clear. Good compensation leads to better employee productivity.
However, compensation doesn't have to be in the form of increases in hourly wages. On the contrary, incentive programs seem to work best. For example:
- Profit sharing
- Performance raises
- Salary plus percentage
- Health insurance paid by employer
- Bonuses based on volume increases
In fact, improving working conditions in the detail department is seen as a benefit by the employee and can result in improved employee attitude and increased productivity. It shows you care.
Management Makes the Difference
If you expect employees to improve, you too must improve. Look at yourself, your management style and treatment of your people. You can improve. Like most of us, both you and the employees can probably find many ways to improve, if you are honest in your evaluation.
One of the biggest improvements you can make is to keep an open line of communication between you or your manager and your detail employees. Make them feel you care about what they have to say and what they think.
The hardest thing in maintaining sound communication between employer and employees is for both to believe such communication is possible. Most employee problems develop when the employer gets caught in the self-centered attitude of making money as the only purpose of the business. It is proven that employees will “put-out” when the boss makes them feel they count when it comes to the business success.
Technical Void
There are very few “detail technicians.” This is true even among the several thousand individuals performing detail services on a daily basis. And, the void continues with no major industry effort being made to provide a way to train individuals in the skills of detailing.
There is a move within the nation's high school vocational programs and community colleges to offer a detail curriculum. You might check with your local vocational high school or community college to see what they offer. Many have developed excellent curriculums on auto detailing as a trade and as a business.
One of the biggest problems we face in this area is apathy. If you do not care about some method to train detail technicians for your dealership, who will?
In lieu of any formal training program it must be the dealer’s responsibility to develop his technicians.
If you are uncomfortable about the technical expertise of your detailers then make the effort to take one or two of your existing staff and find a formal training program for them.
If you do not have people on staff you are comfortable investing time and money in, you should contact the local high school vocational counselor or community college for recommendations they may have for candidates.
When you do find a person willing to work in your detail department as an apprentice, spend the time and money for their proper training.
Involve them in any and all training sessions you can find. The manager of the department should work with them as often as possible on a one-on-one basis. And, above all, pay them enough to keep their interest. They will be an investment in your future, not an expense.
If your detail department is to improve, you have to develop good technicians.
Many of the technicians you are looking for may already be on your payroll. All you have to do is change your attitude and many times you will be amazed how theirs too will change.
If existing employees don't meet your standards then hire those that do.
Summary
To improve attitudes with current employees let me suggest a few questions to ask each employee on an individual basis:
- Are you secure working for this dealership?
- Are you proud to be part of the dealership?
- Are you proud to be called a detail technician?
- Are you clear on your work assignments and our expectations?
- What can we do to improve communication lines?
If you plan to seek better employees you must be able to sell them on the advantages of working in your dealership in the detail department. You have to convince a qualified young person to want to learn the art of detailing.
Starting out as a detailer in the dealership may not be a high paying job, but you need to show them a person can have a bright future with your dealership. You know that as cars, trucks, and boats are used as a means of transportation the future for you and the detailer can be extremely prosperous.
Remember a qualified technician should receive all the important awards: RESPECT, INCOME and PRIDE.
Respect – If those in the dealership are made more aware of the importance of the detail department they will give the detailers more respect which will improve their attitude.
Income – As many dealers know, the income potential for a qualified and aggressive detailer is staggering for a relatively unskilled job.
Pride – Every day the work is different. The detailer is hardly in a rut; no two jobs are the same. If a person can use both their hands and can move them with common sense, there is a job for them in auto detailing in your dealership
If I can help you, please contact me buda@detailplus.com.
I recently heard a National Public Radio story that sounds kinda crazy. In Sweden, they’re landing airplanes without the benefit of an on-the-ground air traffic controller.
The person who informs pilots of local wind/other conditions sits in a tower 100 miles away. But thanks to a sophisticated camera/sensor system, he’s apparently got a reliable bird’s eye view of the airport, and so far the technology-driven remote guidance is working well.
To be sure, this aviation innovation is occurring at a rural airport, where flights are far less frequent than Midway or O’Hare in Chicago.
But, even so, I couldn’t help but think: If the Swedes can land an airplane full of people without an air traffic controller sitting next to the runway, don’t you think it’s feasible that a dealer can buy a car without standing next to it in the auction lane?
I understand why some dealers resist buying cars sight-unseen. There’s definitely a greater risk, and there’s always merit to seeing, smelling and touching a car before you buy it.
But the best-performing used vehicle dealers I know rely on buying auction cars online. They’ve found such purchases are necessary to reduce costs, increase efficiencies, keep managers in the store to work deals and maintain an aggressive throughput of retail units.
These dealers also tell me that the online purchase/delivery/as-needed arbitration processes work pretty well. There’s less risk for buyers than there used to be, and auction companies recognize their reputations increasingly rest on proving that dealers can trust their online marketplaces to acquire needed inventory.
Again, I recognize that some dealers may never be comfortable with the way new technologies are changing the business. But I would suggest they consider that if pilots trust themselves and a planeload of passengers to technology, maybe it’s time to put the fears of buying a car online to the test.
Dale Pollak is the founder of vAuto. This entry and Pollak’s entire blog can be found at www.dalepollak.com
Paul Potratz, chief operating officer and founder of Potratz Advertising, recently bought a new truck for him and his wife to use on their horse farm near Schenectady, N.Y. Potratz shared it was a “great” experience at the dealership, but he said “where they dropped the ball was they left money on the table.”
Along with the new pickup, Potratz wanted several other products and accessories with the vehicle, including a remote starter, rubber floor mats, a tow hitch and step-up bars.
“All the way through the process, they never talked about any F&I products. They never talked about accessories,” Potratz said. “In fact, I wanted to get a remote starter, and I had to ask them about it. They really didn’t want to talk about it. It was like they wanted to get me out of the dealership because they were afraid they were going to lose the deal if they talked about me spending more money.”
Potratz suggested that dealers not shy away from discussing accessories and other products with their leads. Rather, engage these potential buyers early in the process to highlight what the dealership has to offer to enhance the vehicle.
“When a customer submits a lead, start talking about accessories, wheel and tire packages or different types of paint treatments. When you’re buying a vehicle, you want to know how to keep that vehicle looking nice for a long time,” Potratz said.
Potratz goes into more recommendations on how dealers won’t leave money on the table as well as events the Potratz Advertising team will be presenting best practices, including the AR Canada Conference that runs on April 20 and 21 in Toronto. It’s all available in the latest Think Tank Tuesday video.
Industry analysts estimate that subprime customers account for about 25 percent of used-vehicle financing deals in the past year.
With this stat as a backdrop, many dealers are eyeing the subprime segment in the current year as they extend their goals for used-vehicle market share and sales.
To achieve this goal, some dealers have charged their F&I departments with doing a better job of getting more subprime customers “bought” by lenders. In some cases, this means re-upping efforts to work with a wider array of lenders who specialize in subprime financing deals.
But I would submit that dealers who solely look to F&I for increased subprime success are missing the bigger picture. In fact, the difficulties dealer encounter in subprime often owe to shortcomings in their used vehicle inventory management and sales processes — not the F&I office.
I’ve come to this understanding after many discussions with dealers about their difficulties serving subprime customers. In most cases, the dealers have not made subprime-worthy vehicles a priority as they acquire used vehicles via the auctions or trade-ins. In addition, the dealers have not provided their sales teams with the ability to efficiently and effectively match subprime customers to vehicles that will satisfy lenders.
With subprime inventory acquisition, dealership appraisers and buyers need to be aware of exactly how far “back of book” they need to purchase vehicles to fit subprime lending parameters. Without this knowledge, it’s no wonder that dealers have difficulty getting subprime customers “bought” in the F&I office, because the cars weren’t acquired with an emphasis on a subprime-oriented exit strategy.
Similarly, every dealer knows the frustration that follows a sales associate working with a customer to select, test drive and work up a deal, only to learn the customer’s in the wrong car due to their credit and financial position.
The good news is that dealers now have technology and tools to help them address both the inventory acquisition and sales process challenges. These tools can arm your appraisers and buyers with the lender parameters to instantly know if a used vehicle acquisition makes sense as a subprime unit or not. Similarly, the tools can give your sales associates instant access to a list of subprime-eligible vehicles in your inventory when they determine a customer really should be financed through a subprime lender.
Of course, your sales associates also need to know how to effectively assess a customer’s budget and payment needs early in your sales engagement process, and use those findings to align customer expectations with available financing and vehicle options.
But when dealers correctly address the subprime inventory acquisition challenge, and properly match subprime customers to the correct cars, they typically find that the F&I office has little, if any, difficulty getting deals “bought.” Likewise, the dealership will be better able to use its ability to serve subprime customers as an avenue to achieve its goals for expanded used vehicle market share and sales.
Dale Pollak is the founder of vAuto. This entry and Pollak’s entire blog can be found at www.dalepollak.com
In my work with dealers one of the most common complaints I encounter is this:
“My sales people don’t follow up. We have less foot traffic, and the salespeople won’t call their customers back or try to get referrals to get more sales.”
As with anything, there are exceptions to the rule, but in most cases, dealers and general managers are correct on both points. Statistics relating to shopping and buying behavior highlight that customers are visiting less dealerships than ever before: from an average of 4.5 visits to stores just a few years ago, some data suggest customers now visit, on average, 1.2 dealerships before making a purchase decision. That means fewer bodies in your showroom and on your lot, less opportunities to use your human resources and physical facility to encourage purchasing. When a prospect leaves your dealership, the imperative actions then become to stay in contact, provide excellent customer service by phone and email, ensure that customers understand the offers made while they were in store, present enhanced offers if needed, and verify that the roadblock preventing the sale is not in the salesperson’s approach.
I have a habit of secret shopping my dealer customers, in order to understand how a customer experiences shopping at that dealership. Usually this involves an email lead submission, sometimes a phone in lead, with both methods of contact provided for follow up, and a question on a specific used inventory piece on the lot. I then track and evaluate the quality of the response and subsequent follow up. Results from a recent secret shop of dealers involved in one performance group are pretty much indicative of what I often find:
- Of twelve dealers contacted by me, only about 50 percent ever got back to me.
- Only 25 percent tried to contact me by phone.
- None made more than a first attempt to make contact and get me in to the store.
The quality of the responses varied wildly. At the low end, I received an auto responder followed by poorly written emails which did not provide any incentive to visit the store or ask any questions to further me in my search. One phone response was professional, warm and respectful.
It is interesting to note that some of the best sales people I have ever met are people who would have a difficult time selling on the floor. This is because phone selling, the backbone of prospecting and follow up, is a very different skill set than showroom sales. The objectives are the same, with one key difference: phone selling is successful when the salesperson provides enough value for the customer to visit or return to the dealership, floor selling is successful when a customer buys a car. Both goals involve a buy in from the customer, but phone selling is entirely contingent on a fantastic service experience, whereas showroom selling is too often reliant on transacting based on discounting and offers. The reality is, your best salespeople may not have the skills that drive customers back in to your showroom, even though they have the ability to make the sale once the customer is in front of them.
Consider as well that everyone learns and receives information best in one of three ways: by seeing, by hearing, or by doing. Some customers don’t actually understand the offer presented to them by the salesperson, either because the stimulus in the showroom puts the customer on high alert and inhibits them from objectively listening to the offer, or because the information is complicated by other factors (trade ins, negative equity, too many choices presented) that emotionally exhaust the customer before they can decide to buy. A structured follow up call, closely following the customer’s visit, at a time that is convenient for the customer, while they are in a relaxed state and either at home or at work, goes a long way towards the end of communicating a fair offer to the customer in such a way that they feel supported in making a decision to buy rather being pushed or sold to.
The final factor is an extension of a basic tenet of sales: People buy things from people they like. Perhaps for some reason, the customer did not like, trust or feel comfortable with the salesperson. Most people in that case would simply choose not to buy, and avoid the embarrassment of asking to deal with someone else. You would never be made aware of this, and you could certainly not sell the customer a vehicle. A neutral person performing a customer service follow up stands a better chance of hearing that feedback, allowing for the customer to deal with a different person, opening the opportunity for a sale to still take place. We do not all like everybody we meet, and it is not a definitive reflection on the skills of the salesperson if some customers just can’t get comfortable enough to buy from them.
As shopping and purchasing behaviours continue to evolve, these things will become even more relevant. Good follow up is not only a part of selling, but it is also becoming increasingly the best tool a dealership has. Far from an afterthought, after sales service and follow-up points of contact form the basis of sales accountability: what is the point of stocking several million dollars worth of vehicles, maintaining a clean and inviting facility, or executing a full scale media marketing plan if the requisite follow ups to customers are not being made? You owe it to your business, your staff, your customers, and to yourself to have high standards and a solid plan to facilitate customer service until the customer says stop: they will either buy a car from you or from someone else.
If you want to sell more CPO vehicles, do a better job of educating both your staff and customers. It's really that simple.
3 steps to selling more CPO vehicles
Step 1: Educate your team.
Step 2: Educate potential buyers.
Step 3: Reap the rewards.
Last year a dealer group enlisted my services to help their stores on digital marketing strategy and sales process. One of the of the objectives this group has was to increase their CPO sales.
As I went from store to store across the group, I went through the same exercise at each location. I asked every staff member in the room (GM, SM, product advisers) if anyone could recite the entire CPO program to me — accurately. I even offered up a $50 Starbucks gift card for anyone who could do it.
As I went from store to store, the results were underwhelming at best. Across 6+ dealerships, not a single general manager, sales manager, or product adviser knew their respective CPO Program in its entirety.
How can someone effectively sell something that they don't even fully understand? Why should any consumer cough up the extra cash for a CPO vehicle when they aren't being educated on all of the value-adding benefits?
The lack of education didn't stop there. Next, I turned my focus to the auto groups' dealership websites. I went through every single page, on every single website in search of information outlining the details of the CPO program.
While each site had a 'Certified Pre-Owned Vehicles' inventory tab, not a single site explained what a CPO vehicle was. Every dealership website should include a point-by-point listing of your CPO program, explaining why consumers should pony up the extra cash.
In fairness, this dealer group’s story is not the exception — it’s the norm.
CPO Knowledge Test
- Can you recite your entire CPO program from memory?
- Can your sales staff recite your entire CPO program from memory?
- Does your website have a detailed listing of your CPO program?
My bet is that the answer to each of these questions is a big ole' no.
Here is the good news — it doesn't have to be this way.
Here's how you fix it
Make CPO education a part of every daily/weekly sales meeting until every member of your team knows it like the back of their hand. As with all things in the training world, this needs to come from the top down. All management in the store should be as familiar with the program as the
product advisers are.
Have your on-staff website manager or your website provider build a page on your website detailing the exact benefits of your respective CPO program. Your staff can now use this page to educate themselves and others on the details of the program.
If you educate them, they will buy
Now that you know the secret to selling more CPO vehicles, it's time to take action!
Call a sales meeting, update your website, and make 2015 your best year in history for CPO sales.
Kevin Gordon is a co-founder of Convertus, a fast-growing automotive digital marketing agency based out Vancouver. Contact Kevin at kgordon@convertus.com or call 888.354.6441 to see how Convertus can help you craft a winning digital marketing presence for your store.
I’m pumped for this year’s NADA convention in San Francisco.
Like other dealers, I regard NADA as pretty special. It’s a one-time opportunity to meet with many of my dealer friends from across the country in person. The convention also provides a wealth of ideas and insights to apply in the coming year.
It’s easy to feel overwhelmed and worried at NADA. What if you miss something important? I fight this worry these days by doing my best to get more sleep and exercise during NADA than I used to.
But I’ve also found it helps to head into NADA with a handful of strategic beacons to illuminate all the convention offers and determine whether an idea or product really offers a good fit for your dealership. Call it a way to winnow the worthy from the worthless.
As I head to NADA, here are three beacons that I believe are relevant for all dealers:
1. The need for greater in-dealership efficiencies. It’s no secret that while most dealers have been blessed with rising new and used vehicle sales volumes, profitability per car has diminished. This reality owes to a variety of factors, including the ever-increasing influence of the Internet, volatility in vehicle pricing and valuations and the rising costs of doing business.
In this environment, dealers can continue to sell more vehicles but they won’t achieve maximum profitability, either on a per-car or total dealership basis, unless they pursue ways to provide sales and service to customers more efficiently.
If we look around at other retail sectors, the pursuit of increased efficiencies is everywhere. Executives understand that the sale of products and services in a highly competitive, price-sensitive retail environment is the final leg of profitability—your opportunity to maximize margin must occur before a transaction with a customer.
For dealers, the need for greater efficiencies should be a paramount consideration as they evaluate the array of ideas and solutions proffered at NADA. In my view, if a solution doesn’t help sell a car or serve a customer in a more cost-effective and efficient manner, it probably isn’t a good fit for today or the future.
2. The need to become more customer-centric. One of the most significant paradigm shifts for dealers is that today’s highly wired, technology-driven marketplace offers more insights about customer desires, wants and needs than ever before. These insights can and should inform virtually every aspect of your business, from the new/used vehicles you choose to stock, to the way you present these vehicles for sale online, and to the processes you employ as customers come to you to buy or service vehicles and leave your dealership.
In this environment, it seems to me there are few “fresh ups” on the showroom floor or service drive any more—after all, customers today typically engage your websites and call centers before they arrive. Similarly, it’s important for dealers to recognize that a customer’s satisfaction doesn’t end after a vehicle sale or service visit.
As dealers attend workshops and visit the exhibit floor, it seems critical that they look for ways to advance their ability to know and serve a broader array of customers in a manner that differentiates them from the competition.
3. The need to better serve and retain employees. Despite all the advances in our business, dealers still suffer from persistent turnover—a problem that often undermines their ability to become more efficient and serve their customers in the more me-centric fashion they desire. The sharpest dealers have already begun to reckon with this long-standing issue. They’ve adopted benefits packages, hiring/recruitment strategies, leadership training, pay plans and performance management models that, years ago, would seem ill-fitted to the realities of highly charged dealership operations.
Many dealers still believe the car business is different than other retail businesses and, in many ways, this remains true. However, few retail businesses suffer the productivity and profit losses that result from poor employee retention, and many dealers appear to accept these consequences as “the cost of doing business.”
This mindset will only, over time, hamper a dealer’s ability to profit and prosper in the years ahead—particularly as the next generation of employees want more from their work experiences than a paycheck. It’ll be no small challenge for dealers to understand what makes these employees tick, capture their interest in recruitment efforts and offer career paths that play to their passions.
Interestingly, NADA’s Human Resources workshop track addresses many of these employee recruitment and retention topics, and I won’t be surprised if the sessions see more dealers than they have in the past.
I hope these beacons prove useful for dealers heading to NADA in San Francisco this week and beyond.
I’ll be spending a lot of time at the vAuto booth (#1718S) and look forward to seeing you there, and sharing my NADA insights and observations here.
Dale Pollak is the founder of vAuto. These entries and Pollak’s entire blog can be found at www.dalepollak.com.
