Running a successful automotive dealership for many years to come is possible. Steven Covey said, “begin with the end in mind”, meaning have a plan for where you want to go and a time frame. That will help you design a route and allocate resources to get there. I am going to focus on 4 of the most overlooked but strategic areas in a dealership today.
- A marketing plan that targets, measures and focuses on the customer you want.
- The correct lending sources to facilitate 95% of your needs.
- Inventory that matches and maximizes gross profit and sales.
- A team that will get you to your goals and represent your dealership favorably.
1. Create a Marketing Strategy that Works.
When consulting with dealerships, I routinely ask the question of what is your average (all divided by quantity) beacon of the customer coming in your door? Most Dealers cannot answer, they just guess, because they do not app everyone. A dealerships advertising and marketing as well as the overall appearance and look of the facility attract specific types of customers. If this is the customer base you wanted, you did a great job. But if you want something different, you have to do something different. You have to know where you are before you plan a route to get somewhere else.
To further address the app gap, I recommend that you train your sales staff to get an app on every person that comes into the dealership and make sure you are tracking that information to compare with your marketing efforts.
2. Pair with Proper Lending Sources.
A majority of dealers did not pick their current lenders to match their customer’s needs. A representative came by and that’s where it ended. As a dealer, I would evaluate this every 6 months to make sure that my dealership is in line with the needs of my customers. Too many times we change lenders based on who the finance manager is or likes. And unless he is also designing your marketing plan and purchasing your inventory, there will always be a disconnect that will frustrate your sales staff.
3. Stock the Correct Inventory.
Match your inventory with what sells and what can be financed. I would overlay this with demographic factors such as income, household size, age and regional preferences (4WD in mountain areas, convertibles in sunny locals, etc.) Keep in mind that banks also have make, model and miles preferences that should be taken into consideration. Past history and recent search volume can help here, but be wary of the Porsche Principal… not everyone that searches for one can afford to drive one.
4. Build a Successful Team.
Lastly, is an asset that can make or break all others. Your employees. They should reflect your dealership image in the best possible way. They should be attuned to the customers that you are attracting such as possible needs, credit issues and preferences. All too often, sales staff with a negative outlook on credit are usually challenged by the customer and paint a negative vibe in their presentation. Make sure they are aware of all promotions, special financing offers and products that will enhance the sales experience. A happy customer brings referrals, and if handled properly, can be the dealerships best selling tool. If you will invest in your staff and make sure that they are all in unison, you will ensure that your message and image are seen in the best possible light. Remember nothing you do online will make up for a bad personal experience.
When times are good, we spend little time or effort at improving processes or personnel. Why, we are making money, cars are selling, people are coming in the door? But what we may be missing is an opportunity to reinvest in the very machine that will support us years from now or even next year. If you will do this now, you will certainly reap the benefits for years to come, regardless of the economy.