Feed the Beast: Grow the Dealership

(upbeat music) – The future of our
traditional dealership model is at a tipping point. We can no longer afford
to think that technology is our salvation or that
technology is our sales process. We must be smarter, innovate,
evolve and tie technology to our critical processes. It’s time to make a choice: either be proactive and evolve, or potentially become extinct. (upbeat music) Look, customers purchasing
vehicles today have different desires and expectations
than those of the past. Loyalty of our product is
diminishing with fewer people differentiating between brands. Today, more than ever,
growth and profitability must be strategic and intentional. Out of the box thinking form leadership is non negotiable in order to
continue to feed the beast and fuel our future. The disruptions and
competition that we’re facing and experiencing from
outside sources like Carvana, TrueCar, and potentially Walmart, Amazon and other venture capital companies, is unlike anything that
we’ve ever seen before. It’s critical to maintain profitability in our current business
model while formulating plans for the future. I believe there’s two key
areas leaders in the dealership must focus on right now to
remain relevant and gain market share. The first key area is we
need to feed the beast. The beast is hungry. We have bills to pay right now. Look, while we have our
sights on the future, it’s vital to continue to
capitalize on every opportunity that we currently have. And these are the specific
steps to implement and focus on now to
grow the business today and support future plans. Number one, we need to speed up the velocity of the car deal. Look, it takes too long to buy a car. Number one thing people
hate about buying cars, is how long it takes. Why does it gotta take
three or four or five hours to buy a car? We need to speed that
velocity of the deal up. It needs to get to an hour
and a half, two hours max at delivery if we’re
gonna remain relevant. Number two, we need to manage
the customer’s trade cycle more effectively. What does that mean? Number one, we have to be
able to deliver an exceptional experience every time so they
wanna keep coming back to us. We need to make sure when
we sell the car, the terms are right, meaning we have
good lease penetrations, shorter term, and money
down, so we can trade that customer out of the car
every two or three years. Number three, we need to learn
to inject technology into our current sales process. Too many of us are
running our sales process the same as we did 20, 30, 40 years ago without injecting technology in. Look, you have CRMs,
you’ve got great apps, let’s use them, because it
will help speed the velocity of the deal up, and make
it a smoother transaction. And then lastly, we need
to look at our pay plans for our sales people. Does your pay plan reward
sales people for that second, third, and fourth car deal? 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 paying a percentage
of the front-end gross, and there’s no bogie. There’s nothing additional
for the second, third, fourth, fifth car. We need out of the box thinking
on sales people pay plans. Now the second key area to
remain relevant is we have to be able to fuel the future. We know that there will be changes. And now’s the time to plan and prepare. It’s not like we don’t know
these things are coming. Now I know change, it isn’t gonna be easy, and it’s tough to deal
with, but it’s gonna require a new mindset from many of us. Developing a clear vision
today, creating specific plans, and leading and managing our
teams will be the difference between massive long term
success or future failure. So what do we need to look at? One, we gotta look at click and buys. You know, the customer
buying completely online, never showing up to your dealership. Is that gonna be reality in the future? Heck, it’s reality right
now in some markets. But don’t just make
change for change’s sake. Don’t just play follow the leader, if your team, if your
market, if your customer base isn’t ready for it. Otherwise, it just becomes
another expense that is gonna take away from your
profitability in the dealership. Number two, we gotta
look at relentless client retention versus just
random customer conquest. You know, some of us are
still more focused on pulling that guy from 60
miles away in, so we can sell a car for an $800 loss. We’ve got a customer base
with tens of thousands of people in there. It costs a hell of a lot
less to retain a customer than it does to go out and
try to conquest a new one. What are you spending
to retain your people, versus what you spend to
conquest somebody new? Third, we gotta look at
concierge service for our service department. A dealership with no walls in service. You wanna have great customer retention, offer customer service
where they never have to come to the dealership. They all hate sitting in
that little room we have for service waiters drinking
stale coffee, watching reruns of headline news. Put together an aggressive
concierge service and you will see your retention skyrocket. And lastly, we gotta look
at doing more with less. The old mindset of hire
’em in masses, train ’em in classes and fire their asses
is a thing of the past. We need to develop and
retain top producers. It’s not about having ten
guys selling eight to ten cars a month anymore. I want ten guys selling
20-25 cars a month. Is it gonna happen on its own? No. We need to train ’em,
we gotta develop ’em, and we have to have a pay
plan that rewards them for being there long term
and retaining customers selling that second,
third, and fourth car. Bottom line guys, feeding
the beast is critical, to fund and achieve your vision and goals for the dealership of the future. Don’t let perfection be
the enemy of progress. The time to take action
to fuel your future and feed the beast is now. (upbeat music)

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