Automotive Sales training - The 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 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.

 

A dealership needs a detailed plan that includes interview questions, a number of interviews, personnel trained to interview, testing methods for potential job skills match, screening methods, follow-up methods, and 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 1950s and 60s and have changed only slightly. Meanwhile, for the customer, everything has changed. Information gathering, overall knowledge, shopping process, volume of choices, expectations, value perceptions and 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 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 t he 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 online and offline 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:

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

• What are your number of inactive customers, and what percentage is that to your overall customer base?

• 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 themselves 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” e-mail me at info@tewart.com with “10 Things” in the subject line.

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Comment by Mark Tewart on December 3, 2012 at 10:55am

Tim, Thanks for the very gracious comment. 

Comment by Mark Tewart on December 3, 2012 at 10:55am

Good point Cheryl. Years ago I contributed to a book written by a friend of mine titled "GenderSell - Selling to the Opposite Sex" - I was amazed back then when I did research as to what was occurring in dealerships and although better, it still occurs today. Advertising, culture, environment and attitudes still have a long way to go.

Comment by Cheryl Baker on December 3, 2012 at 10:42am

Quoting your article: TLC – Think Like a Customer. Many of your customers are women, and yet the industry is still heavily relying on marketing and advertising tactics that appeal to men.

Comment by Tim Schewe on December 1, 2012 at 12:02pm

Mark, this is the most "spot-on" post I've ever read on Dealerelite. Well done.

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