The future of our traditional dealership model is at a turning point. If you want to grow the dealership, it's time for an honest appraisal of technology's role in our sales process. We don't have the luxury of thinking of it as our salvation any longer. We must innovate, evolve and dictate technology's tie to our critical sales processes. Our choices are clear: be proactive and evolve or be subject to extinction.
Customer's buying habits have changed. They have different desires and expectations. Brand loyalty is diminishing due to the rise of disruptors like Carvana and TrueCar with the potential of Walmart and Amazon following quickly behind. Today, it's more critical than ever to be intentional with our growth and profitability strategies. There's a few key areas we need to focus on to remain relevant and gain market share.
The Beast is hungry, let's feed it.
With our sights firmly on the future, it's imperative we stay grounded in the present to capitalize on opportunities in the now. Here are specific steps to implement and focus on now in order to grow the dealership today and support future plans.
First and foremost, speed up the velocity of the car deal. The main grief customers sight about the car buying process is the time lost. It makes no sense for a customer to spend 3-4 hours at the dealership trying to buy a car. Evolve. Get it down to 90 minutes, 2 hours absolutely max.
Next, manage your customer's trade cycle by delivering an exceptional experience every time they enter the dealership. Meaning, sell the cars with the right terms (good lease penetrations, shorter term, money down, etc.) so we can trade customers out of their cars every 2 or 3 years. Evolve. The concept is simple, keep them wanting to come back.
Thirdly, grow the dealership by injecting technology into your current sales process. Evolve. Too many sales managers are running our sales process like it's the 90's. Your CRM is more accessible than ever with apps on your phone, use it to help speed up the process. It'll be a smoother transition every time. Welcome to the millennium.
Last but not least, we need to reevaluate the pay plans for our sales people. Does your plan reward salespeople for that second, third, and fourth deal with one customer? Most of our pay plans are still similar to what they were in the 70's when some old dead manager came up with them. We're short changing our salespeople by only paying a percentage of the front-end gross with no bogie nor additional incentives for the sale of the second, third or fourth car. Evolve. Grow the dealership by changing your plans to reward your salespeople.
Fuel the future.
Position yourself to remain relevant. We know there will have to be changes so prepare now while it's still ahead of you. It's important you frame your mindset right. Change is never easy but it's not only necessary, it's inevitable. Creating a clean vision to lead and manage our teams will be the difference between massive long term success or future failure. So, what do we need to look at to create a clean vision?
One, look at the click and buy rate. Specifically the buys that happen completely online, with a customer never coming into the dealership. Is this a preview of the future car buying reality? In some markets, it's already the main source of transactions. But, proceed with caution. Don't just make change for change's sake, if your market's not ready. Otherwise, it'll just become another expense eating away at your profits.
Two, look at your relentless client retention versus random customer conquest. Some of us are still focused on attaining clients 60 miles out just to sell a car at an $800 loss. It's significantly more cost effective to retain a single customer than it is to go out searching for a new conquest. Evaluate what you're investing on retention versus your investment on new conquests.
Third, invest in a concierge service for your service departments. To have great customer retention you must have great customer service. That all starts with the greeting. Don't make them do what they hate, sitting in a dull tiny room, sipping on stale coffee watching reruns of Springer. Instead, differentiate yourself from the rest with quality concierge service. You'll see your retention skyrocket. It's as easy as giving the customer what they want.
Finally, do more with less. Meaning the mindset of hiring them in masses, training them in classes and firing their asses is a thing of the past. Focus on developing and retaining the top producers. More isn't always better. I'd rather have 10 guys selling 20-25 cars per month than have a large team averaging maybe 10 cars a month. Is it going to happen on it's own? No. We need to train them, we gotta develop them, have a pay plan that rewards them for being there long term and retaining customers selling that second, third and fourth car. It's a cohesive strategy that needs to be executed as such.
Bottom line, feeding the beast is critical, to fund and achieve your vision and goals to grow the dealership. Don't let perfection be the enemy of progress. The time to take action to fuel your future and feed the beast is now.