Our industry is evolving, obviously and painfully, due to margin compression. My advice? Don’t fight it. Embrace it! Things have changed significantly in the past decade. You have been forced to invest in new technology, but if you are like many dealers, this has only led to further declines in profitability.
If you are failing to maximize the benefits of new technology, it may
be because you are undermining whatever operational efficiencies you may have gained by putting untrained staff at the controls. This unlikely scenario is highly prevalent in the dealership business, where we allow increased tech and staffing costs to erode our bottom lines.
The solution is to stop hiring people before you have to, stop adding technology before you need to, improve your efforts to attract new customers, and strengthen your existing customer relations. You can start today by tracking the following four indicators:
1. Leads
Somewhere in every dealership is a list of potential buyers who have contacted the store but have not purchased a vehicle. They should be contacted again and followed up with regularly, and every lead should be tracked monthly and quarterly.
The money is in the follow-up. You can’t Velcro your lips to the showroom windows and expect to make a living. Confucius once said, “By nature, men are nearly alike; by practice, they get to be wide apart.” Take steps to increase your referral rate from existing customers and people you know. Create stated objectives. Work it!
2. Closing Ratio
During the past calendar year, how many people did you see, and how many did