Automotive Sales Training - Death of the Traditional Dealership - Part 2

Do you feel like you are missing out on something? Are you confused as to what the next step is in making your dealership successful? It’s a different ballgame than it was even just a few years ago. The traditional dealership is dead and you must bury it to prosper in the future.

For years the car business could be a very forgiving business. There was room for a lot of error in a dealership and yet a dealership could still be profitable. Those days are gone. Dealerships cannot be run in only a “seat of the pants”, entrepreneurial fashion anymore. To be successful dealerships have to be measured intensely in four areas – People, Process, Product and Positioning.

People – You must choose a path that works for your dealership philosophy. You must recruit people on a full time basis based upon want, not need. The leadership of a dealership must have a written and executed game plan for recruiting that utilizes online services, job fairs, colleges, tech schools, high schools, web sites, micro-sites, social media, newspaper, mass media and more.

Each dealership needs a detailed plan that includes a) interview questions, b) number of interviews c) personnel trained to interview d) testing methods for potential job skill match e) screening methods f) follow up methods g) initial and ongoing training methods for new hires

Process – Each dealership should have a written and executed process for every part of the dealership – sales process, internet lead process, marketing process, service process, parts process, manager process, used car inventory process etc. As an example, the selling process must be reviewed to make sure it is up to date and matches today’s marketplace. Most sales processes being used today were created in the 50’s and 60’s and have changed only slightly. Meanwhile, for the customer, everything has changed. Information gathering, overall knowledge, shopping process, volume of choices, expectations, value perceptions, lessening of brand loyalty are all things that have changed dramatically.

Every dealership needs to review their process based upon TLC – Think Like a Customer. What are you currently doing in your dealership process that lessens customer trust or ease of shopping/buying. Most dealerships are living in the stone-age when it comes to something as simple as the meeting and greeting of the customer. Nothing in your current process is sacred and the mantra for many things should be “just let it go.”

Product – The days of “Stack’em deep and sell them cheap” are over. Your new and used inventory must be monitored daily using analytic systems and technology that measures not only your inventory but others and market conditions. Many dealers have fought using any type of turn system even though simple mathematics proved you would be better off doing so. Well, the tide has turned again. Turn systems by themselves are now outdated and can even lower your dealerships ROI without other factors involved. Each vehicle is an investment just like a stock or mutual fund and must be analyzed, bought, priced, marketed, sold and eliminated using several conditions. Just saying that you have a 45 day turn system is not good enough anymore.

Positioning – Gone are the days of running display newspaper ads and waiting for traffic to arrive. Your dealership must have a dealership strategy that combines market positioning. Selling vehicles based upon price only will not create long term success. Successful dealers will no longer be able to delegate all of their marketing to an advertising strategy without educating themselves on the marketing and positioning aspects of their dealership.

Dealers will have to massively educate themselves on things such as, direct response marketing methods, copyrighting, multi-step campaigns, integration of on-line and off-line methods, social media, continual customer relationship building strategies, and sales to service continuity programs and retention. Dealers will learn that many advertising agencies do not understand any of these things and simply create lousy to mediocre production and buy the media. Without a well thought strategy using intentional congruence with all of the above mentioned factors you cannot be successful in this and future marketplace.

In the last year, I have asked hundreds of dealers the following questions:

#1 - What are your overall sales to service retention numbers and percentages beyond a first free oil change?

#2 - What are your number of inactive customers and what percentage is that to your overall customer base?

#3 – What is your planned and executed strategy for a continuity program to keep your customers for sales and service?

Here is the sad result. Out of hundreds of dealers, only one knew the answer to these questions. I continually find that dealers and managers do not really know what is going on in their own dealerships and are not doing anything to educate them to change that.

The reality is that the future belongs to dealers who educate themselves more, execute better and understand the value of speed in today’s marketplace. The marketplace of today and the future will continue to be very unforgiving with little room for margin of error, inattention or being slothful. The traditional dealership is dead but the exciting news is your new dealership is waiting to be born.

For a free special report titled “10 Things You Must Do At Your Dealership To Be Successful” email me at info@tewart.com with 10 things in the subject line.

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