For two years in a row the US market reached over 17 million vehicle sales. Experts predict 2017 will be another record setting year for franchised dealerships. Good times in the auto industry have become the new norm. Yet many newer, less tenured employees were not around during the bad times of 2008/09. The veterans in the business know, that everything is cyclical. They also know that in bad times one builds good habits. The opposite is true as well – bad habits can be easily developed during good times. In many cases those habits can be well hidden and ignored in lieu of good results. In order to dominate during good and bad times here are five things you must focus on continuously.
1. Employee development. Great companies are created by great people. In many cases those companies raise their own talent. Talented people will not stick around if they are not challenged and given an opportunity to grow and develop their skills. It is important to identify learning gaps as they may be in the areas you least expect. Based on a recent survey of multiple dealerships employees, one third of the respondents chose leadership skills as most desired subject they wanted to learn about. This comes as no surprise, since leaderships/management skills training is often ignored in the automotive world. To help them grow you must focus on their capabilities development by providing great just-in-time training and a healthy regimen of skills upgrading opportunities.
2. Experience is KING. Those of you who were around during “cash for clunkers”, might remember the lack of great customer experience during that time. To be fair, dealerships were offering “first come, first serve” experience approach and customers did not mind the time and brain damage it took to get a deal of a lifetime. Well, those days did not last long. Today’s consumer expects great experience online, over the phone and in-person. They have low tolerance for shenanigans and old-school games. Moreover, transaction time has become important to them like never before. To win in any economy focus on great experience that exceeds each customer’s expectations.
3. Process improvement. Process and experience often go together. During good times it is easy to lose focus on either one or both. Continuous process improvement will enable your business to grow in a steady and incremental pace. As the saying goes, “the best never rest”, evaluating processes and constantly looking for better ways to deliver your promise to your guests will help your departments function at peak performance. Pay attention to communication. In many environments, lack of communication is the harbinger of process breakdowns. Your employee’s feedback is another vital part of communication you must utilize to improve. How often do you ask your employees to provide this necessary feedback?
4. Forecasting and tracking. These two disciplines can be first to slip away when things are going your way. It is easy to slack off and not take time to put much thought into projecting your numbers. Does each department forecast production and track their progress? Do they truly do it daily? Does each department know and understand what other department’s goals and status is each day? Think of ways they can help each other if they knew what everyone’s rate of travel is. What about good old fashion “make a deal” or “save a deal” meetings, how often do they happen at your dealership? Do you think you can pick up two or three deals per day or per week?
5. Expense control. There is a term I learned long ago that is called “the creep”. No it is not a person, it is your expenses that creep up on you over time. You do not notice when your admin cost goes up, or when you add another “valet” in your service department. Certain software monthly fees go up, while your BDC wants to add another caller to “cover” the schedule, oh and parts department ordered more parts to add to their obsolete collection. What seemed like a great idea at the time, ended-up driving your expense structure way out of control and your retention suffers. Reviewing your expenses often and making necessary adjustments is critical to stay lean and healthy in any economy.
Developing and maintaining good habits during the good times takes discipline. It takes focus and unwavering commitment to keep getting better. Concentrate on developing your employees, by offering them the best training possible and opportunity to grow. Insure your people provide the best customer experience by constantly reviewing and improving their processes. Continue to forecast and track each department’s production drilling it down to each individual producer. Monitor your expenses and watch out for that “creep,” that sneaks-up on you without you knowing it is there. One last thing, I left out accountability. You see, if you are doing true employee development, process improvement, forecasting and tracking, accountability will take care of itself. So, when you focus on those five components of your business and keep accountability part of your culture, you will stay ahead of the pack and dominate the market during any economy.
by Tony Troussov