Car Dealers…How drastic are your business development changes?

Thanksgiving is around the corner with Christmas and New Years approaching even faster. The retail automobile industry is coming off of a great year. Car dealers are selling cars again and showing signs of growth. In fact, there has been a tremendous amount of dealership buy-sell activity in 2014.

Yes there are plenty of conferences, seminars, webinars and even “experts” going around dealerships creating best practice solutions. While only a small percentage of car dealers get involved in attending these events there is still a lot of great information out there. In fact there are a lot more dealership executives that are gaining more knowledge as their vendors educate them and they read industry publications. This however is a very crucial period for dealers as business slows down in some parts of the country and we get into “panic mode” sometimes canceling services that have been proven to generate ROI.

Now is the time to sit down and evaluate everything in the store from advertising budgets to employee performance. Even though we are in a business that competes on a 30-day cycle we still need to look back to what it was that made us successful in the previous months. Sure when business is going great we work hard and enjoy the success. But when business slows down it is easy to start pointing fingers and playing the blame game. Since business is slow and people can easily get into “holiday” mode it is important to coach, train and motivate teams so that they continue to perform. A drastic change must only be made after discovering that something is not working.

Example 1: A business development department in a dealership sets appointments at 50% and generates a 60% show rate but only closes at 7%. The dealership is emphasizing paying BDC reps on shows in order to focus on bringing in traffic and taking off the focus on selling cars. The dealership changes the pay plan for the business development department to only pay them on the sale. What is wrong with that? Now appointment setters are focusing on selling the car over the phone and have no care about what they bring in. It also means that there might be turnover because if cars are not sold and they are not making money they leave. Why not focus on reasons why the store closed 7% of the appointments? Why not focus on training the sales people and managers? Where is the accountability?

Example 2: The Internet Sales Department or business development department is not bringing in enough people and sales are down. Management decides to eliminate the department which includes firing people or if these people are lucky getting shifted into another role. Does the management at the store look at how many leads came in? Do they look at how much follow up is being done to leads? Are they evaluating quality of follow up (lead response time, number of phone calls, amount of emails sent, amount of texts sent, spelling and grammar of engagement, notes in the CRM, etc.)? It might be time to consider looking at a Lead eXaminer type product for a solution. Who is monitoring phone calls?

While there can be hundreds of other examples that can be pointed out it is important to understand that everyone and everything needs to be properly accounted for when managing a multimillion dollar business. I want to urge all general managers and dealer principal to evaluate every issue in detail. Take a look at what you are spending, what you are getting and how your people are performing. If a department is not performing, come up with an “outside the box” solution to properly train and manage your people. Your business will grow exponentially as soon as you become fully accountable for it.

I urge every general manager and dealer principal to evaluate every issue in detail. Take a look at what you are spending, what you are getting and how your people are performing. If a department is not performing, come up with an “outside the box” solution to properly train and manage your people. Your business will grow exponentially as soon as you become fully accountable for it.