The automotive industry is enjoying incredible profitability as a result of an almost perfect vehicle supply versus demand dynamic, and new and used vehicle grosses being at their best in at least 20 years.
This follows a rough period for the industry, where the average net to sales were less than 1%, and many dealers were struggling to break even. As history has shown time and time again, the dealers who were enjoying better than average returns were those who remained focused on their people, process and maximising the small things (e.g. the ‘1%’ opportunities).
With vehicle grosses as strong as they currently are, it’s easy to become complacent. The attention to detail and drive to do the ‘little things’ well can diminish. After all, it’s these little things that separate the benchmark dealers from the average ones in tough times. As an example, are you still doing and measuring the following:
- Tracking leads and follow up times
- Facilitating introductions to F&I and Aftermarket
- Contacting customers who are approaching, or out of warranty/finance
- Contacting service customers for next service bookings
- Contacting customers post their dealership visit for customer satisfaction feedback
- Monitoring grosses and questioning exceptions
- Revisiting commission plans and rewarding the right behaviours.
This is by no means a complete list. Every department has a list of ‘little things’ to do on a daily basis which contributes to their success in good and bad times.
While dealers have replenished reserves over the past 12 months, and you should feel entitled to enjoy the rewards, now also represents a great opportunity to reinvest in your people and processes to establish an even greater platform for future success. Although timing remains unpredictable, most accept the market and profitability will likely recede from these unprecedented highs. Those dealers that have made most of this time and continued to develop their people and processes should be well placed for whatever lies ahead.
If you have any questions, please contact our team.