Seems like you can’t get your dealership out of second gear? Maybe it’s time to rethink your approach.
Is your dealership experiencing momentum? Momentum is a term generally used to describe forward physical movement. its effects, however, can apply to many different aspects of our lives. For example, in sports, we often describe a dominant in-game swing as a shift in momentum.
In the dealership world, momentum is simply moving positively toward accomplishing documented objectives. It can describe progress in key aspects in any department and for the dealership overall over various lengths of time. It can mean improving financial performance, revenue increases, customer satisfaction, employee engagement, market perception of your dealership, and so on.
We all have experienced momentum at some point in our careers, when all departments are humming along, and positive results simply pop from the page.
Unfortunately, sustained momentum does not happen all that often. The best analogy I can think of is golf. When everything is in sync, the game is easy. Drives go long and down the middle, approach shots from the fairways are crisp and on target when needed, wedge play is dialled in and putting is dead on. If even one of the areas is off, however, even marginally, momentum can be stopped in its tracks.
I had a conversation about a short time ago wherein a dealer was lamenting that he found it almost impossible to have all his departments performing well at the same time. He went on to say that if new vehicles and F&I are performing strongly, used vehicle sales usually dwindle. He supposed the lack of supply of good quality used vehicles was the culprit.
This led to an in-depth discussion about how his dealership operates. He was not all that complimentary about his management team’s capabilities, which he believes is a cause for the higher rate of employee turnover than they would like to see. He said that high turnover leads to higher-than-average training costs and hampers customer satisfaction. He rambled a fair bit, covering a lot of ground, and it seemed to me that he lacked an organized, focused view of his business.
At one point, I asked him about his processes. Did he think his processes were designed to maximize efficiency? Specifically, whether his store staff training identified and reinforced specific knowledge covering his processes or if it was more general in nature? He replied that it was more general in nature and that the understanding of processes would be learned hands-on through on-the-job activities. I then asked him about the documentation of his processes, and he just shrugged his shoulders and said there was room for improvement, again pointing the finger at managers.
Putting the customer at the centre of our dealership operations allows us to structure processes that enhance the customer experience while at the same time streamlining those processes, building consistency.
He has asked me how does his dealership build momentum? Not knowing his managers or any of his staff, I decided to take the following high-level approach. I explained that from my point of view, using an example of professional sports, team building is a constant daily effort. Many times, you have multi-million dollar players playing alongside a supporting cast that makes much less. Sure, there may be talent differences, but no one or two guys can carry the entire team. It takes a team effort game after game to gel as a team and consistently perform well.
The coach and his team devise systems that all players are expected to follow regardless of compensation level. Without each player possessing the intimate knowledge of the components of the system, and their role within it, the team will not be able to play together consistently and successfully. Extensive practice and working together, following documented processes, gradually builds trust. Trust and practice go hand in hand in building momentum.
I asked him about the interaction between fixed and variable operations in his store. Did they work as a team or operate in silos? He replied with one step further. He indicated that used and new competed with each other. He followed with his reflection that service and parts seemed to work well together but there was little interaction with the retail side of his dealership.
It became apparent to me that this guy was very old school and had become somewhat lazy. There was a time in history when dealerships made money regardless of how they operated. Once the doors were unlocked, customers just came in to spend money. That is not the case any longer. With increased brand competition, increasing vehicle quality and web-enabled customers saddled with today’s inflationary realities, the business has evolved to a point where departments must be consistently managed to give dealerships a shot at success.
And yes, dealerships need to constantly practice, reinforcing what is working and what is not and making sure everyone is on the same page. That’s what meetings and huddles are for.
Putting the customer at the centre of our dealership operations allows us to structure processes that enhance the customer experience while at the same time streamlining those processes, building consistency.
The pandemic gave us the opportunity to refine how we do business and spend our hard-earned money. During the pandemic, we closely examined how we did things, asked why, and refined processes to make them more efficient. Generally, we reduced costs and significantly increased profits.
Unfortunately, as vehicle supply becomes more reliable today, many of us are abandoning our learnings from the pandemic and falling back to pre-pandemic practices. I guess that’s human nature. It takes hard work, a clear vision of dealership objectives, and dedication to achieve sustained high-performance levels.
It is possible to build momentum as we shift back to a push system from the short-lived pull system we experienced during the pandemic and resulting vehicle and parts supply shortages.
I’ve said many times that operating a dealership is not easy. The business is difficult and complicated with many moving parts. It takes hard work, a clear vision, dedication, and a team that consistently pulls together, day in and day out. That’s how you build momentum and earn the right to enjoy all the benefits it provides.
