Death Of The Traditional Dealership
by Mark Tewart, President of Tewart Enterprises
Every year at the NADA Convention the exhibit hall is full of CRM and BDC companies displaying their wares. Dealers spend massive amounts of money in a frenzy to buy the “magic button” CRM or BDC solution for many reasons. Unfortunately most of those reasons aren’t valid. Putting great tools in the hands of below-average people with below-average processes and little-to-no accountability equals a waste of money.
Let’s look at some of the underlying reasons why dealers buy these tools. Dealers see their dealer friends, fellow 20 Group members and competitors buying these tools and feel the peer pressure to “keep up with the Jones’s.” Dealers start reading trade magazines and attending programs where a lot of the conversation is around customer relationship management and feel the force of momentum around this subject.
Unfortunately, I have been in thousands of dealerships across the country and can say without a doubt that in the majority of dealerships, between 80 to 90 percent of their CRM’s or BDC’s functionality is not being used. Great technology and great tools alone do not move a traditional dealership into the new age of selling. In most dealerships with CRM tools, incremental sales and service numbers are not improved and massive amounts of money are being wasted.
In almost 30 years in the business, I have witnessed the majority of dealerships putting massive amounts of time, energy and money on acquiring new customers and giving only lip service around the importance of existing customers. All research, data and plain logic shows that putting the emphasis on your existing customer base first will reward you more than any other single thing you can do. I conduct interviews with dealers every day, and it’s hard to find a dealer who actually knows what their dealership’s repeat sales numbers look like. Almost none of the dealers I interview can tell me what their sale-to-service retention percentage is. Very few dealers can give a detailed explanation of their CRM process and how it is carried out, and even to what degree it is carried out. Embarrassingly, very few dealers can tell me specifically and convincingly why a customer should buy from their dealership versus their competitors’.
The traditional entrepreneurial dealer focused only on push-driven sales is dead. Dealers have to be better business people than ever before. Gone are the days of being successful in spite of yourself. The margin for ignorance and operating error is slim.
Bury your old dealership and operating approach as you know it. Take the time to step away from your dealership and evaluate what you are doing versus what needs to be done. Evaluate the 4 P’s of your business – People, Process, Product and Positioning. Evaluate all the tools and technology you use and the effectiveness of those tools and the way they are being used, or most likely not being used. You must integrate people and technology together into a cohesive sales and marketing process.
Many dealers will come to the conclusion that they will never be able to set up a traditional process with people carrying out all the functions they’d like. Most of your salespeople and managers are not capable or willing to do all the things you want them to do. The hard truth is that they never have and they never will. If this is your dealership, you may have to let go of your ego and design a process with job descriptions that can actually succeed. You may decide to remove some of the traditional functions and narrow the focus of each person on your team. I have often heard dealers say, “I expect my managers or salespeople to do these things.” In return, I always ask the dealer, “Do they? And if so, how often?” Most of the time, the answer is either “no” or “very little.”
It’s very clear — gone are the days where a dealer can accept that expectations are not being met. You must demand accountability from people or completely redesign your dealership with processes and benchmarks that can and will be executed and monitored. I invite dealers to stop playing victim by blaming your people for not executing. You hired them, you set up the process and you created the accountability or lack of it. Therefore, it’s your responsibility and your job to fix it.
For a free special report titled “10 Things You Must Do At Your Dealership To Be Successful” e-mail me at [email protected] with “10 Things” in the subject line.