As I take a step back and look at 2018, I view it as the year
of the “healthy” dealer. We have seen a major shift over the last 12
months for both dealers and manufacturers on understanding that
the best way for a dealership to be healthy is not through quantity of
unit, but from the quality of the experience that they are offering to
their customers.
As we have worked with dealers, we have encouraged them to make
sure the mix of revenue was one that would sustain them regardless
of what the economy would generate for them. For a trailer dealer to
have a healthy mix, they need to typically generate 60% of their gross
revenue through whole-goods, 25% from parts, and 15% from service.
While health for some dealers may mean getting their revenue mix
right, health for other dealers we have worked with looks like taking
a step back from their dealership and not letting their business
consume their lives. Being a healthy dealer may look a little different
for each individual, but I want to share a few specific examples of
dealers for our NATDA Dealer Success Groups who have embraced
this mentality in 2018.
We believe that service is the back bone of the dealership. We
have worked with one dealership who began to understand their
service department’s value not only to their business, but also to
the community. This year, they raised their posted labor rate by $10
per billable hour. This dealership has two technicians and they were
able to net an additional $32,000 and implement a compensation plan
for their technicians. This has not only allowed them to end up in
a healthier place as they approach the end of the year, but has also
created a situation where their technicians are excited and motivated
to be part of their dealership.
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One dealership has had an increased focus on the importance
of upselling and cross-selling in their parts department. They, like
many other dealers, have embraced the concept of having their parts
team upsell (offering a better-quality item) and cross-sell (suggesting
another item that will complement what they are purchasing) at
every parts transaction. They have found that this has increased their
parts sales by 30% over last year and has created a better experience
for customers.
For most dealers, whole-goods sales have been strong this year. With
the improving economy, sales have followed. While there are a few
things that have been thrown into the whole-goods game, such as
tariffs and increased delivery costs, it doesn’t seem like it has had a
dramatic impact on the customers. We have one trailer dealer who
has simply sent a hand written thank you note for anyone who bought
from his dealership over the last year. It cost him very little and he
received a lot of customers who were blown away by the small act.
His one small act of writing a thank you note has continued to put
him in a healthy place with a group of loyal customers.
Most dealers we work with who have a desire to move to a place of
health in their dealership aren’t doing anything big. They are making
some minor changes in one department at a time. They have found
that these minor changes continue to compound, creating a dealership
they can run and not a dealership that runs them.
NATDA Dealership Performance Training includes online
modules and documented processes, so dealers can improve
every aspect of their dealership – from the parts department
to trailer sales. For more information and to sign-up, please
contact NATDA at 727-360-0304.
NATDA Magazine www.natda.org