While I was on a conference call with a dealer-client the other day, the Dealer Principal commented on the fact that his Internet sales manager had just reported that last month was “a record month for the BDC.” The dealer principal responded very respectfully that “every month should be a record.”
The call got quiet as we all absorbed this bit of wisdom; and then it struck me that not only was this Dealer Principal correct, he was setting the expectation that only record months would be tolerated in his store for the foreseeable future. This client was signaling that he will be raising the bar each and every month for both his online and his offline sales, and that his team better be ready. “Every month should be a record.”
Of course, given that 2009 was the undisputed “low water mark” for new car sales – and that everyone is predicting a steady climb over the next four years back to the magical 16 million new units — this is what every Dealer Principal should be saying. It’s also what every dealer group manager should be demanding and what the stockholders of the publicly-traded automotive companies should be expecting. “Every month should be a record.”
There are expectations and there is reality
Unfortunately, the reality of all business is that those in charge often set expectations without guidelines, follow-up or consequences. These unmanaged expectations, like personal goals you fail to commit to writing, become merely dreams. And, merely dreaming about taking advantage of the nearly 60% growth in automotive retail that most experts predict will occur between 2009 and 2014 will ensure you get a much smaller piece of that pie.
In other words, just because you experience a record month here and there does not mean you will have truly “grown your business.” In fact, in an upward market it is very easy to grow revenue while actually losing market share. With this loss of market share, you will eventually lack the efficiencies of your competitors and you will be in an unenviable position: You will experience higher relative costs in a business with declining margins. This is a recipe for disaster.
Because there are so few traditional ups and so many Internet ups today, the only way for dealers to ensure they are getting more than their share of the rising sales is by a strict adherences to process (guidelines), measurement (follow-up) and accountability (consequences). Those who have the discipline to follow through with these will see their businesses (and profits) grow at a rate well above their competition. Those who do not, will still enjoy a “record month” every now and then, but won’t understand why they’re losing share while growing. Additionally, because these dealers lack process, measurement and accountability, they will be quick to add too much labor and other costs in an attempt to capture the growing market; further eating into their profits.
Right-sizing while growing
There was so much written about “right-sizing” during the 2008 and 2009 downturn that I fear our industry only considers it a necessity to gain efficiencies in bad times. The truth is that when you strictly adhere to a process (one that dictates staffing levels based on lead volume, for example), and when you track, measure and adjust (based on the results) and when you hold people accountable (based on their adherence to your processes coupled with their results) you are continually right-sizing your business. In doing so, you remove the need for draconian cost-cutting in bad times because your system of process, measurement and accountability ensures you never add an ounce of fat.
Dealers who’ve created and mandated strict Internet processes and measurement have experienced tremendous growth in their Internet sales, even through the trying months of ‘08 and ‘09. For these dealers, every month was a record month in the Internet department. In the face of declining floor sales, many dealers have now created similar processes and measurements for their traditional sales teams. They’ve created follow-up schedules, email and letter templates, email marketing campaigns, and effective phone scripts designed to recapture be-backs, turn service customers into new car sales and keep their customer base from defecting.
Of course, creating processes and measurements and adopting these as gospel are two different things. For Dealer Principals who’ve set the expectation that every month should be a record, adding true accountability to the mix makes strict adherence to process and measurement a much easier task.
None of this is new
The worst part about all that I am suggesting (and what truly separates successful dealers from those who continue to struggle) is that none of this is new. I suspect we can dig up articles from 20, 30 and even 50 years ago that detail how leaders in the automotive space can make a difference to a store’s success by setting the expectations (“every month should be a record”), providing the guidelines (processes), conducting the follow-up (measurement) and administering the consequences (accountability). It’s not new and it’s not glamorous or fun. (If it was, everyone would be doing it.)
We can, however, put a new skin on these tried and true remedies for driving sales in up or down markets. For example, if you are one of those dealers who are committed to making every month a record month, but you truly don’t know where to start, I recommend attending the Digital Dealer Conference next month in Las Vegas. This conference brings together some of the brightest minds in automotive retail to share how they are so successful. The last conference had 70 workshops, so it’s comprehensive.
During my scheduled workshop, we will dissect the one tool dealers are using every day to keep their improvements on track: the Automotive Continuum of Ecommerce Success (ACES). Although created to help dealers stay focused on the truly important ecommerce tasks at their dealerships, when used properly, the ACES chart can help dealers drive success with offline sales, as well.
Not surprisingly, the cornerstone of ACES is process, measurement and accountability.