The car business is slowing down a bit for many. Are your automotive fundamental ready?
Here are some automotive fundamentals to consider as an owner/operator when times are slow to shore up the ship and get ready for 2023!
1. Mystery shop your dealership sales and service departments. Identify who and where you have weaknesses and inefficiencies.
2. Staff Training and Education: Educate your staff about the cyclical nature of the automotive industry and the unique circumstances of the COVID-19 period. Training programs focusing on prospecting, sales efficiency, customer service, and adaptability to changing market conditions and lower grosses can be beneficial.
3. Cost Management: Review and optimize your operating costs. This could involve renegotiating supplier contracts, optimizing inventory levels, or even reviewing staffing needs, schedules, and pay plans.
4. Diversify Revenue Streams: Look for opportunities to diversify your revenue. This could include expanding into different segments of used car sales, offering mobile maintenance and repair services, or exploring other automotive-related services that generate gross profit.
5. Customer Loyalty and Retention: Focus on building customer loyalty. Implement or enhance loyalty programs, customer satisfaction surveys, and personalized follow-ups to encourage repeat business. Mine your database for sales and service opportunities.
6. Digital Marketing and Online Presence: Strengthen your online presence. Invest and/or refine your digital marketing strategies like SEO, creative and engaging social media marketing, and creative email campaigns to attract new customers and retain existing ones.
7. Market Analysis and Adaptation: Keep a close eye on market trends and customer preferences. Being adaptable to changing consumer demands, such as the increasing interest in fuel-efficient vehicles, can position your dealership for continued success.
8. Financial Planning and Budgeting: Revisit your financial planning and budgeting. Prepare for lower margins by creating realistic budgets and setting achievable sales targets.
9. Employee Compensation, Incentives, and Motivation: Maintain employee morale and motivation through volume-based incentives, clear communication, and recognition programs. Keeping your team engaged and motivated is crucial in navigating through times of lower profits.
10. Enhance Customer Experience: Differentiate your dealership by offering an exceptional customer experience. This can include everything from the showroom environment and the omni-channel purchase process along with after-sales service.
11. Community Engagement: Engage with your local community through events or partnerships. This can increase your dealership’s visibility and reputation, leading to long-term customer relationships as well as sales in variable and fixed operations.
Author: Todd Caputo,
Todd Caputo Consulting
Summary: By John Ellis John Ellis | LinkedIn
- The market is still showing depreciation signs in the wholesale channel, but stabilization is still showing in the retail price. That can be seen in the wholesales to retail margins mirroring black book and dealer track transactional on used car sales.
- Dealers are finding large independents like CarMax and Carvana are becoming really active in the wholesale channel preparing for Christmas and then the Tax season sales events. This is driving prices up for the most attractive cars that are sub $20,000.
- Getting back to the fundamentals will be key to success. This slow time is the perfect time to focus on your dealer operations to tighten the rains for 2024 to take market share.