Certainly, all dealers and managers understand the challenges facing automotive retail today: flattening sales; buyers visiting fewer lots; margins under pressure from all sides; never-ending staffing problems; etc.
In so many ways, these day-to-day issues are simply a part of selling cars in 2018. So much so, that the dilemma facing many operators today is not how to manage these difficulties, but how to stay on top of the coming changes, both those right in front of them and on the near horizon.
Once far off, concepts like digital retailing, subscription models, self-desking, and streamlining the purchase process (that is, replacing the traditional manager roles with professional salespeople able to take a deal from end-to-end) are fast becoming a reality for many progressive dealers. The challenge for the average dealer then, is how to employ these new models while managing the existing issues – and all without destroying what they’ve built.
Managing change, regardless of business environment, is easiest when a dealership has a solid foundation in place. A foundation of dedicated people who follow good business rules and execute repeatable processes can absorb new methods, technologies and products with relative ease compared to their seat-of-the-pants neighbors.
When faced with an ever-changing or uncertain business environment, dealerships with this solid foundation know they just need to follow a few uncomplicated steps to succeed. The best part about following these, is that they’ve been proven to help any store prosper regardless of market conditions. So, if you’re just looking to grow market share or you’re ready to fully explore what’s new and cool in automotive, these three simple steps will help you.
Excel with the Essentials
Let’s be clear: none of us has ever encountered a successful dealership – one that’s growing share, retaining employees and earning great grosses – that was not rock solid on the basics. Given this, your goal – if you indeed want to attack the challenges of today and tomorrow – should be first to excel with the essentials.
Think about it. Dealerships lose more business today by not answering the phones correctly than they do by not having a fully-functioning “Buy It Now” button on their website. If your managers are weak at leading, but they’re begging you to dive headfirst into full digital retailing and subscription sales, slow them down. Challenge them to get good at the easy (and profitable) stuff first, then allow them to explore the shiny objects.
Measure the Meaningful
I get it, managers are bombarded by so many dashboards and reports that we imagine we’re properly tracking and measuring everything… we’re not. When it comes to digital marketing vendor reporting, for example, there are often so many dubious measurements that many managers just smile and keep spending – thinking they’re moving the needle with these dollars.
For some dealers, this means they’ll lament that they don’t have the budget to implement digital retailing or a subscription model, because they believe they’re spending wisely elsewhere. Unfortunately for these dealers, they could be wasting tens of thousands of dollars every year with an unscrupulous digital marketing vendor. Waste that could be stopped easily simply by tracking and measuring the right metrics.
Find the meaningful measurements – those that help you answer one question: “Should we spend more or less with this service next month?” – and discard all the others. You’ll quickly discover that you have more than enough budget to explore new solutions.
Dealers shouldn’t expect to bear all the risk when implementing new technology or functionality today. For example, the incremental cost of adding something like digital retailing to a single dealer’s website is minimal; therefore, dealers looking to explore shiny objects in 2018 should be encouraged to do so. But, proceed prudently.
This means to tread cautiously, though with an open mind. Adding true digital retailing to your website is a great idea, but you shouldn’t have to pay for it if it’s not driving incremental business… and for most of the dealers I see today, it’s not.
This doesn’t mean don’t do these things, it just means to be sure you’re not over-leveraged when you do. Don’t sign long-term agreements or pay steep setup fees, for example. Additionally, be sure to test (where you can) with the smallest practical sample first.
The question, of course, is not if, but when will your dealership employ these new technologies and processes? To ensure their implementations go smoothly and that you get the most out these, start today to excel with the essentials as you measure the meaningful. Doing so will guarantee success when you decide to proceed prudently as you attack the changes on the horizon.