How do you motivate dealership employees to work as a team? And is it worth the effort, especially when there are so many other challenges competing for your attention as a dealership leader?

Evidence from the most successful dealerships demonstrates how focusing on building a motivational team culture can pay off in measurable bottom-line ROI. A recent study found engaged employees lead to 21% more profitability, 41% less absences and a 59% reduction in employee turnover.

But how do you go about building a team culture in a dealership, especially in a legacy dealership that may have deep cultural roots going back decades? 

In this blog post, we share 4 best practices for how to improve car dealership team culture and how to motivate employees to work as a team:

• – Be clear with your team

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– Communicate well and often 

– Coach – but don't micromanage

• – Give them what they need to succeed 

Focus on Clarity

One of the most damaging things you can do as a leader is set your team up to fail by giving them incomplete or inconsistent guidance. It’s hard to succeed if you’re not certain what you’re trying to accomplish. In a study of professional project managers, 30% identified “undefined project goals” as a cause of project failure.

One of a dealership leader’s most important responsibilities is to make sure each staff member understands their personal role and responsibilities and has a clear view of how they fit both into their team and into the dealership. Evaluate the goals you set for your team by asking yourself if they are SMART: Specific, Measurable, Actionable, Realistic and Timely. 

Clarity also extends to transparency. Share as many updates as possible about what’s going on in the dealership, especially when times are tough or news is bad. A car dealership team culture that is based on an honest and transparent communication regarding dealership operations will ultimately help minimize discontent and car dealership employee turnover driven by fear of the unknown.

The Power of (Great) Communication

Creating a team culture that values effective communication is critical to both individual and dealership success. A study by the Project Management Institute found that on average, two out of every five corporate projects fail to meet their original goals – and half of the failures are due to ineffective communication.

Never forget that communication goes both ways. As a leader, you should be listening to your team as much as they’re listening to you – preferably more. Great leaders ask great questions, and they’re constantly curious. Ask questions that require more than “yes” or “no” answers, and make sure you’re not just talking to and hearing from your direct reports. 

Remember that you communicate with much more than words. Body language, energy, eye contact – all these things create context that can speak louder than the words you use.

Coach – Don’t Control

In 2016, Google set out to identify what made its own managers effective at building and leading strong teams. They determined the number one behavior of an effective Google manager was “is a good coach.” 

Never forget, as a car dealership leader, your primary role is to support and empower your team. However, it’s critical to not mistake micromanagement for coaching. (In fact, “empowers team and does not micromanage” was the second key behavior identified by Google.)

There’s always the risk that when you focus more of your time and attention on an employee, they take that as a sign of lack of confidence in them. This can cause employees to lose motivation and confidence in their abilities and perform even more poorly than before. 

A manager who sees this decline in performance will likely intensify their involvement in the employee’s work, making the problem even worse than before. Researchers have called this the “Set-Up-to-Fail Syndrome,” and it’s a very real risk for even the most well-intentioned managers.

To avoid this self-fulfilling spiral, make sure you’re using the tools of clarity and communication discussed above. Most importantly, don’t get so caught up in the mechanics of managing a team member that you forget to show you care about them as a person.

Set Your Dealership Employees Up for Success

Equipping your dealership team with the tools and training they need to succeed allows dealership leaders to create an exceptional dealership culture that’s built on delivering a great customer experience. 

Audit your car dealership’s marketing tools. Is your employee-facing technology easily accessible to every member of your sales team? What about your service department or F&I staff?  Do your databases (CRM, DRM and sales platform) easily integrate? 

These tools impact more than just the efficiency of your dealership – they impact your employees’ satisfaction. One industry study found 61% of employees don’t believe their car dealership is using the latest technology – with 12% thinking their dealership is way behind the times. As a result, 25% are considering leaving because they don’t believe their dealership is headed in the right direction. 

Your success as a dealership leader depends on equipping your team with both the right tools and the skills they need to use those tools to their fullest potential. The same previously mentioned industry study found 1 in 3 dealership leaders aren’t investing in employee training opportunities beyond what the OEM provides. 

Investing in dealership training like technical job-specific courses and broader automotive leadership training is a great way to keep your dealership’s staff motivated and inspired – while simultaneously empowering them to deliver exceptional customer service that sells more cars.

Growing auto sales requires a meaningful improvement in a dealership’s ability to conquest new customers. 

That’s because out of the three kinds of car buyers -- first-time shoppers, loyalty customers and conquest customers – only conquest has the potential for meaningful growth. Loyalty sales only protect the market share you already have, and first-time shoppers are becoming rarer in almost every market as the car-buying population ages.

This keeps conquest in its long-time role as the primary driver of car dealership sales growth. But what’s new today is conquest is no longer just a function of bigger advertising spends or word-of-mouth. Today’s most effective dealership conquest campaigns are driven by big data, not big dollars, and the results are undeniable.

In this post, we dive into how predictive analytics can revolutionize automotive conquest sales, including:

• – Identifying and targeting the best auto sales prospects before they start shopping

• – Improving dealership marketing effectiveness and ROI

• – Powering conquest opportunities through the service drive 

Improving Both Quality & Quantity of Car Sales Leads

Predictive analytics redefine the historic “quality versus quantity” question for car sales leads by automating parts of the lead qualification process that had previously been the limiting factors for dealers. 

Rather than manually qualifying incoming leads on a one-by-one basis, dealers using predictive analytics marketing tools can effectively consider every prospect within their geographical market a lead. By utilizing automated predictive marketing tools powered by data sources that range from public, to proprietary, to the dealer’s own DMS and CMS, dealers can efficiently rank prospects based on their likelihood to convert. 

Instead of a monthly stack of leads of uncertain value, our dealer partners work from a list of prospects ranked according to a 0-100 Behavior Prediction Score®.  This empowers their team to focus on the highest-quality, most-actionable car sales leads first – increasing the time salespeople spend actually closing sales.

Of course, this sort of approach is only possible with high-quality, accurate automotive consumer data. For instance, any analysis of a household’s readiness and ability to purchase a new vehicle needs to include social demographic information like household composition, existing vehicle makes and models in the family garage and household financial information. 

That’s why Market EyeQ’s predictive analytics insights incorporate high-quality data sources from IHS Markit, CARFAX, TransUnion and OEMs, and integrates with dealer DMS and CMS systems to offer our dealer partners a 360-degree view of their entire market.

The Predictive Marketing Revolution

Even with the growth in online advertising, the total marketing cost-per-sale and ROI have barely budged over the past decade: In 2010, dealers had spent $635 per sale, at 7.9% of total gross costs. In 2019, the average dealer spent $640 per new vehicle sale, accounting for 7.9% of total gross costs.

However, personalized automotive marketing campaigns powered by predictive analytics are proving their worth when it comes to improving dealership marketing ROI. Rather than giant and expensive monthly blasts with broad standardized messaging, analytics-driven marketing creates customized marketing campaigns for each conquest prospect that walk them through an individual journey of the right offer at the right time through the right channel to maximize their likelihood of turning into an activated, high-quality prospect.

Mastermind dealer partner Lexus of Towson is experiencing the power of predictive marketing first hand. In its first month, a direct mail campaign based on our platform’s analysis of thousands of data points empowered the dealer to close 20 deals. At a 63% close rate, it was up from the store’s typical 35-40%.

Their success using our behavior prediction technology isn’t unique. Dealers using Mastermind’s data-driven predictive marketing campaigns gain up to 15 additional conquest sales per month. Further, dealers using Mastermind’s personalized dealership marketing solutions report an average $115 per-sale advertising cost – an 82% ROI improvement from the industry average that goes straight to the dealership’s bottom line.

Powering Service Conquest

While the most cost-effective dealership sale is to an existing loyalty customer, the next-best option is conquesting a customer with whom you have a pre-existing service-not-sold relationship. 

Predictive analytics are especially powerful for improving your dealership’s service-to-sales process as your dealership has unique access to critical data about the customer’s existing vehicle that informs how likely they are to start shopping for a replacement vehicle. 

Dealers that have embraced predictive analytics as a tool for driving service conquest auto sales regularly have a dedicated salesperson or even team devoted to reviewing the analytics-driven insights on each and every scheduled service appointment and proactively engaging with service drive visitors who have been identified as high-quality car sales leads by their sales platform’s predictive analytics tools. 

Mastermind’s dealer partners who have embraced this model report converting service customers into new car auto sales at 4x the activation rate than the competition. On average, Market EyeQ helps dealers activate 55% of their service drive into in-market customers. That kind of increased sales volume from high-ROI customers is a powerful addition to any auto dealership’s profitability.

Customer retention can make or break a dealership’s bottom line. That’s why customer relationship management has become such a hot topic – and why in recent years automotive dealership customer retention statistics have moved from the footnotes to the executive dashboards of dealers and OEMs alike.

In this blog post, we share 3 ways auto dealers can improve their dealership customer loyalty and retention, including:

• – Defining what dealer loyalty is worth to your bottom line

• – Helping your employees understand the value of loyal customers

• – Making sure you’re focused on where the customer relationship lives

Know What Dealer Loyalty is Worth

Dealer loyalty is profitable. Loyal customers are cheaper to sell to, less likely to bargain aggressively on pricing, more likely to generate service and other fixed-ops revenues and are a source of high-ROI referral business.

But how profitable is it to invest in a long-term customer relationship, if that requires short-term investments or foregone revenues? A landmark Harvard Business Review paper found that improving customer retention by just 5% increased profits by 25% to 85%, depending on the industry. 

That can translate into big numbers in the auto industry. In 2012 General Motors reported that a single percentage point of improved customer retention loyalty was worth 25,000 vehicle sales, or $700 million in annual revenues to the automaker. 

At the dealership level, data from IHS Markit finds every 1% decrease in loyalty rate equals an average of 90 sales units lost. Further research from MaritzCX found for the average dealer, improving dealership customer satisfaction by one level on a standard five-point scale would result in $2.5 million in loyalty-related revenue, while a one-level drop in customer satisfaction would cost the dealer $4.2 million in lost loyalty revenues.

All this to say, improving customer loyalty for auto dealers means knowing its worth. Use what you know about your existing automotive dealership customer retention statistics, gross and net revenues and other key performance indicators to project what even small improvements or declines in loyalty would mean to your top-line and bottom-line figures, and then project that out over time. 

By utilizing behavior prediction technology, you can take those predictions and KPIs a step further by determining when high-value customers will be in-market and immediately engage them before they’ve had the chance to defect. From there, measure your responses and ROI to further optimize your approach. 

Have Your Employees Think Long Term

From a day-to-day perspective, dealerships revolve around hitting the weekly and monthly sales numbers, and that’s not going to change. This can create conflict with the way auto dealers improve customer loyalty, as it means making decisions that incur short-term costs as investments in long-term loyalty, such as absorbing repair costs in an OEM warranty dispute or offering a free loaner.

However, what’s good for customer happiness is good for loyalty and good for sales, even when happiness comes at a cost. The reality is automotive dealership customer retention statistics, customer satisfaction statistics and sales figures all march in lockstep together. 

The important question is whether your dealership is being managed accordingly. Are your loyalty and satisfaction numbers posted as prominently and discussed as regularly as your sales figures? Are loyalty and satisfaction improvements celebrated and declines taken as seriously as the month’s sales figures? Does your dealership culture truly rank the customer’s experience over that month’s numbers?

Critically thinking, what’s making a dollars-and-cents difference for your people? When GM saw that a one percent improvement in loyalty retention was worth $700 million, the automaker made customer retention statistics part of the annual bonus calculation for its leaders. How are you rewarding your employees for dedicating themselves to excellent customer relationships and building long-term dealer loyalty to drive dealership customer retention? 

Ensure you’re utilizing your reporting tools and dashboards to help you understand why salespeople are or are not hitting their sales targets and where there are opportunities for improvement and growth. By actively setting, monitoring and measuring these metrics, you’ll ultimately improve on your dealership’s sales strategy.

Focus on Where the Relationship Lives

Many dealers view the customer experience through the lens of the sales floor, but in reality, once the sale is over the service drive becomes the focal point of your customer relationship. By the time the next sales opportunity rolls around, the quality of the service customer experience will far outweigh the quality of the sales experience years prior in your customer’s mind and heart.

This is especially important in challenging sales environments where the service drive becomes the de facto front door to your dealership. As the customer lifecycle circles around, the service drive is where your dealership has its best opportunity to collect the payoff on your CX investments by being the launching point for trade-in discussions with sales advisors during service visits. It’s also your best venue to profit from your competition’s failure to build dealer loyalty when you leverage your service-not-sold customer relationships to turn a service customer into a conquest sale. 

This is again where a dedication to the customer relationship results in real-world profits: When deployed as part of a comprehensive customer experience culture, Market EyeQ helps our partner dealers activate up to 55% of their service drive customers into in-market leads, a 4x activation rate over industry standards that helps drive up to 15 incremental conquest sales per month.

Summer car sales are always important for auto dealerships’ annual results, and dealers have long depended on traditional summer car sales events, including always-popular Labor Day tentpole end of summer car sales events. 

However, there’s never been a summer quite like 2020 promises to be thanks to COVID-19 disruptions. Dealers need to combine tried-and-true with brand-new to capture as much auto market share as possible in an unprecedented summer car sales environment.

A big piece of that is pent-up demand. Americans have always shopped heavily for cars in the summer, but even with the expected decline in year-over-year car sales figures, this summer will see an unusual amount of pent-up vehicle demand hitting the market. Millions of consumers who had to postpone planned purchases thanks to family financial disruptions, closed dealerships and paused OEM production will be re-entering the market this summer.

In this blog post, we share a summer car sales guide of best practices for 2020, broken down into some topical themes:

– Capturing the bargain-hunting car shopper

– Prioritizing pre-owned

– Adapting to the “new normal”

Being Ready For Bargain Hunters

Car shoppers are coming back. We’ve noted recently that an AutoTrader study found 9 in 10 new vehicle shoppers believe this is the best time to get a good deal on a new car. Now, the benchmark University of Michigan consumer confidence survey finds that consumers are continuing to become more optimistic, with their view of current economic conditions improving 6.7% between May and June and their expectations for the economy increasing by 10.9% in the same short period. While both figures are still down notably from 2019, this rapid improvement in consumer sentiment suggests that car shoppers won’t be the missing factor in 2020’s summer car sales figures.

All the same, we should anticipate many shoppers will be deeply price-sensitive and searching for summer clearance car sales. Widespread job losses played a significant role in this: According to Pew Research, the U.S. unemployment rate skyrocketed from one of the lowest on record in February to the highest unemployment the nation has seen since the end of World War II just two months later in April. 

All told, more than 38 million Americans filed for unemployment as a result of COVID-19.  Auto dealers’ F&I teams need to be sensitive to this reality and make sure they’re up-to-date on lenders’ programs designed to work with consumers who had short-term job losses or other income limitations.

Bargain-hunting shoppers are also going to be sensitive to OEM programs, even as many of them begin to sunset or decrease in scope. Ensure that your sales and F&I teams are on top of what’s happening with your OEM(s) in terms of production, changing product mixes, captive finance options and other relevant news.

Prepare to Profit From Pre-Owned

One of the biggest auto industry themes in the wake of COVID-19 is the massive changes affecting the pre-owned vehicle market. For many dealers, the end-of-year bottom line for 2020 will depend on how well they can effectively leverage the changing used car marketplace to drive pre-owned summer car sales profits. 

In today’s environment, pre-owned profitability depends on centralizing customer and inventory data, simplifying marketing and sales processes and focusing on improving net profits through ROI gains. For more insights on these topics that you can use to improve your summer car sales profitability, see Mastermind’s whitepaper on the subject.

Adapting Your Dealership for the “2020 Normal”

You may have strategies that have served your auto dealership well in the past, such as summer clearance car sales or Labor Day sales events. In this most unusual of years, it’s critical that you re-evaluate what you’ve done in the past to ensure you’re connecting with shoppers how, when and where it will make the most difference in this new environment.

For instance, many dealers traditionally schedule marketing and sales pushes around tax time in April to connect with shoppers who have IRS refund checks in hand. But for 2020, Tax Day has been pushed back to July 15. While many taxpayers who expected refunds have already filed their taxes and received their refund checks, many others will procrastinate to the last minute out of habit and will be good targets for personalized marketing outreach. This year, Tax Day can be a summer car sales event.

Additionally, as many Americans begin to resume daily driving in the summer, business will begin to pick up on your service drive. Have you made sure your dealership’s service drive experience has been fine-tuned to provide an excellent customer experience in the wake of COVID-19 and that you’ve given it the structure and tools to play a critical role in loyalty sales and service-not-sold conquest?

Finally, it’s not just your customers who require some new thinking – your employees are dealing with the “new normal” as well. Is your team comfortable and ready to go? Do they feel safe in your auto dealership? Are they successfully executing a comprehensive reopening plan?

There haven’t been many years in history where the auto industry outlook has gone through such wild swings as 2020. Auto industry trends – and especially auto industry sales trends – have been thrown into disarray by broader societal factors.

This makes predicting the rest of 2020 a difficult challenge, but one that dealers need to closely follow and consider as they plan their own operations for the remainder of the year. There are new opportunities in the evolving automotive marketplace for dealers prepared to take advantage of them. 

In this blog post, we look at some of the big questions surrounding auto industry trends in 2020, including:

• – What are the industry-wide predictions for new vehicle manufacturing and sales numbers in 2020?

• – How is the COVID-19 pandemic changing automotive consumer behavior and preferences?

• – What do these auto industry trends mean for dealers?

Finding Silver Linings in Auto Sales Outlooks

It’s not news to dealers that shocks to both consumer demand and manufacturer supply have driven auto industry sales downward, creating a challenging auto industry future outlook for the rest of 2020.

In April, IHS Markit released a global light vehicle sales and production forecast for 2020, predicting a 22% drop in sales across the worldwide industry from 2019 levels, with a 26.7% drop in North America alone. While this is obviously not news dealers want to hear, the worst seems to be behind us, with a 47.9% SAAR decrease in sales in April improving to a 29.8% deficit in May. This same trend applies to service drive profits, with major auto groups reporting some improvement in service profits in May as compared to April and March.   

Adapting to Vehicle Inventory Challenges

That current auto sales decline is tied into a predicted 19.6 million vehicle decline in global manufacturing from 2019’s 88.9 million vehicle production total. In North America, that production decline was on full display in April, as OEMs built just 4,840 new vehicles. 

By now, most automakers have gotten at least partly back to work, with automakers like GM and Ford cancelling their annual summer shutdowns in an effort to make up lost production efforts. However, new vehicles are still slow to trickle into dealer showrooms, creating inventory challenges for dealers as customers try to take advantage of attractive 0% financing options.  

This auto industry trend comes at the same time as used vehicles are flooding used car lots from rental car companies impacted by COVID-19 closures. These newer and lower-mileage cars entering the marketplace are creating an attractive opportunity for dealers as defleeted vehicles usually have low reconditioning costs and can be a source of solid profits while the new vehicle pipeline refills.

Looking at the Bigger Picture of US Auto Sales Trends

The larger reality is many U.S. auto industry trends in 2020 are the result of broader societal trends related to how and where people are working – and how they’re getting around. For instance, at various points over the past few months, public transit ridership has been reported to be down 90% in New York City, 70% in Los Angeles, more than two-thirds in Salt Lake City and Seattle, more than 50% in the Tampa Bay area and Indianapolis and 25% in Houston. The question for the auto industry's future outlook is how many of those riders will return to transit, and how many will instead purchase cars to meet their mobility needs.

The U.S. Centers for Disease Control and Prevention is currently adding to the complexity of this issue. The CDC has released guidance that suggests workers drive themselves to work rather than take transit or carpool as the safest mode of commuting.

Changing Consumer Car Buying Behavior 

Beyond where and how much Americans drive, it remains to be seen how the pandemic will change Americans’ product preferences, but some trends are beginning to arise. 

While much of the news surrounding U.S. auto sales is grim, the reality is there are still going to be millions of consumers in the marketplace for a new or used car. Many consumers only postponed their shopping during stay-at-home orders, and as cities and states begin to reopen their economies those shoppers are broadly going to be re-enter the marketplace.

However, they may not make the same purchase decisions as they would have before the pandemic. Lost income and lagging economic uncertainty are leading to changes in car buying behaviors. For instance, a Cox Automotive survey finds that 31% of buyers have reconsidered their preferred vehicle body style due to COVID-19, citing better gas mileage as the leading influential factor. These same economic limitations are ushering some customers into the pre-owned market who otherwise would have been shopping for new vehicles. 

These changes in automotive consumer behavior spell big opportunities for auto sales conquesting efforts in the coming weeks. According to data from IHS Markit, 9 million nomadic households, defined as shoppers who have no meaningful brand or dealer loyalty, will be in-market for a new car in 2020, but dealers need to act fast to take advantage of these opportunities.

What This Means For Dealers

If 2020 has taught us anything, it’s the degree to which even the best and most thoughtful auto industry trend predictions can be upended by the reality of the next morning’s headlines. This creates obvious challenges for car dealerships trying to make plans for their business and devote resources to the future.

One immediate step dealers need to take is investing time, effort and resources in building a customer experience-focused dealership culture supported by tools and capabilities that allow your people to be as efficient and effective as possible. Is your marketing based on data and real-time insights that predict consumer behavior, or are you just “spraying and praying?” Does your dealership reporting give you the insights you need to be an effective manager and leader? Are your digital tools up to the demand of being the new “front door” of your sales operation? Have you connected your service department to sales and are you effectively marketing your service drive to increase your service conquest leads? Does your F&I experience make your customers more or less likely to want to do business with you?

Rather than betting on one auto industry trend, dealers have the opportunity to focus on what they can control by ensuring they have the fundamentals in place that will carry them through whatever the future may hold. 

It’s challenging in the best of times for dealers to keep sales and service connected. When large portions of your auto dealership are operating virtually, it’s even more complicated – but critically important. 

When operating as a virtual car dealership, possibly with your sales staff at home and your fixed ops team on-site serving customers, how do you keep them connected, delivering consistent customer service and taking advantage of opportunities to create value together?

As auto dealership operations continue to change due to the COVID-19 pandemic, we’ve shared numerous dealership tips and considerations, spanning from virtual dealership best practices and what your dealership’s BDC needs to be doing differently, to improving customer experience in the service drive and preparing to kickstart auto sales after the immediate disruptions end. 

Your ability to utilize these best practices inside your dealership hinges on one critical consideration: Ensuring your entire organization stays connected and your teams can support each other, wherever they may be.

In this blog post, we share how to keep the two key engines of your dealership, sales and service, connected and engaged by:

• - Working from the same information and insights

- Communicating effectively

• - Strategically managing the change process in your dealership

Common Systems, Common Experience

One critical question to ask yourself is whether your dealership’s sales and service teams are interacting with the same customer, and if so, are they on the same page? Does information and insights about the customer consistently flow back and forth between your teams and your systems, ensuring there’s a consistent customer experience no matter where they might be in the dealership? This requires you to ensure your DMS and CMS, sales platform and other dealership tools are all integrated effectively. 

We’ve talked before about how critical service drives are to the customer relationship, especially for generating auto sales prospects through building loyalty relationships or starting new ones through service-not-sold conquest. In the current virtual car dealership sales environment, it’s more important than ever that the service department’s interactions with customers be captured effectively and that you have the systems in place for your sales team to turn service interactions into high-quality sales leads.

One way many high-performing auto dealerships keep their sales and service teams connected is by dedicating a salesperson to service conquest. This salesperson’s sole role would be to use your dealership sales platform to identify and engage with high-quality service-to-sales prospects with scheduled service appointments. Now is an excellent time to consider creating that position and getting that person to work on mining what will likely be your auto dealership’s best source of sales leads for the foreseeable future.

Shoot, Move & Communicate

It’s not enough for your sales and service team members to be doing their individual jobs well. If your people are not communicating effectively with each other, your dealership’s customer service and bottom line will suffer.

The U.S. Army’s basic training manual boils down the myriad responsibilities of soldiers in combat into the deceptively simple phrase, “Shoot, move and communicate.” Whether it’s with fellow squad mates, their leadership or supporting units, military trainers hammer home the fundamental truth that communication is critical to mission success. The same is true for the teams in your dealership.

In the current environment, people have turned to a wide variety of communications tools to stay connected to friends, family, coworkers, customers and others. The challenge for a dealership manager is not that there aren’t enough communication tools. Rather, the issue is often that there are too many options, and many of them operate outside your auto dealership’s control, which means they do not engage with your CMS, DMS or other systems.

While operating remotely or as a virtual car dealership, it’s critical that as a leader, you emphasize the importance of your sales and service teams communicating effectively through the channels and processes you identify and manage on their behalf. 

Make effective communication a regular topic of discussion with your teams and highlight best practices with praise or other more tangible rewards. The goal is to both show and tell your sales and service teams that their ability to deliver on customer experience expectations in the current dealership environment is dependent on not letting physical distance interfere with effective communication.

Manage Change – Don’t Be Managed By It

If there were ever a time for what business schools call “change management,” this is it. Making significant process changes without a clear definition of what you’re changing and why runs the risk of not being successful – or even causing more problems than it solves.

In fact, researchers report that three-quarters of corporate change efforts fail to meet their goals, or end up abandoned altogether. 

This shouldn’t dissuade you from the critical effort of looking at the ways in which your service and sales teams usually interact and then defining how those processes must change to meet the needs of the current environment. 

This should be both a top-down review by leadership, as well as bottom-up from the people in the trenches who are trying to make things work. Even if you’re certain that you know exactly what needs to change and how, you’ll have a much stronger acceptance of change if your teams feel a sense of ownership in the process.

Once you’ve identified what needs to change to strengthen the connection between sales and service or in other areas of your auto dealership, the next step is to define exactly how those processes will change. Make sure you can draw a straight line between what you learned from your review about what needs to be done differently and how the changes you’re making address those identified issues. All too often, once organizations start contemplating making changes, the instinct is to make huge changes, or more changes than are needed. It’s easy to fall victim to “scope creep” by trying to change everything all at once. 

For the best chance of success in your efforts to improve the connection between sales and service, you must be able to define what you’re trying to accomplish, explain what you’re changing (including how and why) and then be able to identify when you’ve accomplished that original goal.

Most importantly, don’t get discouraged. Change isn’t immediate. Things go wrong, and it’s easy to get skeptical and frustrated or bail out too early. This is why Harvard Business School professor Rosabeth Moss Kanter, one of the world’s leading experts on how businesses can successfully reinvent themselves and their operations, coined “Kanter’s Law” – “Everything looks like a failure in the middle.” 

Keep being thoughtful, keep communicating, keep listening to what your team has to say and keep focused on what you’re doing to ensure the best customer experience possible – particularly when customers move through the service-to-sales process.

If we can help you work through the best path forward for your dealership, please contact us.

It can be hard to figure out how to motivate employees in a business environment with so much uncertainty and so many challenges. As a leader, it’s easy to put all your focus on the practical day-to-day issues or on the bottom-line numbers, making it tough to prioritize something that may seem non-critical, like your dealership’s employee morale. 

“It’s a crisis,” it’s easy to think. “Nobody’s happy. Everyone needs to rally together and get the job done.” But falling prey to that mindset would be incredibly harmful to your dealership’s culture, its ability to deliver for your customers…and ultimately for your bottom line. 

We’ve talked in the past, in simpler times, about the importance of employee happiness to employee motivation, and by extension to your dealership’s ability to deliver a great customer experience. Keeping your dealership’s employees positive and motivated to do great work is a business-critical responsibility for a leader in any set of circumstances, and it becomes even more important in a crisis. 

With employee morale at its most fragile, dealership leaders need to be doing more than ever to ensure their team is motivated and ready to respond to challenges – and take advantage of opportunities. In this post, we share three tips for motivating dealership employees during COVID-19 disruptions, including:

• - Leading by example

- Creating a positive dealership environment 

• - Instilling a sense of trust in your team amid uncertainty

Lead by Positive Example

Frankly, you may be so stressed out and worried that you don’t know whether you have it in you to be a beacon of positivity for your team. That’s understandable, and you’re certainly not alone. But employee motivation stalls in the face of uncertainty, frustration or pessimism – and there’s no faster way for your employees to pick up those performance-killing conditions than if that’s what you’re broadcasting to them.

Positivity in the workplace starts at the top. So does negativity. It’s critical for you as a dealership leader in this kind of environment to focus on what can be accomplished rather than what can’t; to talk about what’s going right rather than what’s going wrong; to celebrate successes rather than obsess over failures.

To do this effectively, commit to highlighting the things you can be positive or optimistic about. With so much of the news focused on what’s going wrong, it’s easy to miss the opportunities. 

In the spirit of sharing our own positivity about the current environment and the future, here are some positive things to consider about the auto industry:

• Yes, the auto market is down and will likely be for some time. But people still need cars, they still need dealers to sell them those cars and they’re going to want to interact with dealers who demonstrate a genuine care for them in the current environment. They’re going to buy their car from somebody, so it should be you – not your competitor.
   

• There are a lot of customers out there who need your support through tough times. They may need to change their purchase intent from new to used, and they may need to lower their payments or figure out what to do with their lease. You can help people who need it right now by assisting them in making the right decision for their current situation. Doing that well and with empathy is something you should be proud of. You’re making a real difference.
   

• Changes to the used car marketplace are creating a huge opportunity for entrepreneurial and agile dealers to identify, engage with and close used car prospects. This is a new and unexpected opportunity that’s grown out of industry upheaval – and whichever dealers get ahead of it first  will be the ones who benefit. Get excited about this opportunity and share that excitement with your team.

Share the Good

There’s an old saying: “Happiness shared is happiness multiplied.” It’s important to remember that employee morale is a combination of both individual happiness and collective interaction. Your leadership should encompass both one-on-one and collective efforts to motivate your team.

From a practical perspective, this means you should intentionally create opportunities for your employees to share their positive stories or good news, whether those bright spots are work-related or otherwise. The more your people can share the happy things in their lives, the happier they will make both themselves and others. 

There’s even science behind this: Researchers have found that while there’s emotional value to spending time considering the positive things in your life, the greatest benefit to your happiness comes from sharing those positive experiences with other people. 

Take the time to find opportunities to be positive together as a team. You’ll be (literally) happy you did.

Trust Your People

Fortunately, as a leader you have one very powerful tool in your control to help your dealership employees maintain positivity in the face of uncertainty and unforeseen challenges: Trust. 

Trust and empower your employees to solve the problems they’re faced with on a day-to-day basis. Also, this is a great opportunity to ask for their input and advice on how to deal with the broader challenges your dealership is facing. This will not only boost employee morale but may also present ideas and opportunities you never would have considered. 

As one Harvard Business Review article put it, “When people are able to participate in making decisions that directly impact their work, their sense of ownership, and therefore engagement, increases.”

Your people want to do their jobs well. Empowering them to do that is one of the most powerful things you can do as a leader and one of the best ways to motivate employees to do great work, regardless of the circumstances.

Interested in learning more about how Mastermind’s training or solutions could contribute to your efforts to maintain a positive dealership culture? Contact us today.

If you’re reading this post, it’s safe to assume you’ve spent time working at an auto dealership and you know how important leadership qualities are to day-to-day business and end-of-year bottom lines. And if you’re in a leadership position at a dealership – or would like to take that challenge on some day – you likely wonder what makes some dealership leaders so effective in their roles while others are ineffective at best…and harmful at worst.

At Mastermind, we spend a lot of time with leaders from dealerships and dealer groups of all types and sizes, allowing us to see some of the best dealership leadership skills in action. In this blog, we’re stepping away from talking about software, data and analytics (mostly!) for a moment and sharing some thoughts from our experiences and the experiences of some of the most famous business leaders of all time, including how to:

- Hire the best employees for your dealership

- Do your job and trust your team to do theirs

- Build a dealership culture that people enjoy being part of

How Your Dealership Can  Avoid the “Bozo Explosion”

As a leader, one of your key responsibilities is to hire great people. It’s a relatively straightforward concept at its core, yet hiring talented people who are also a fit with your culture can pose challenges for leaders, especially when it comes to specialized roles where it often seems there aren’t enough “great” people to go around.

One mistake too many leaders make – especially new managers, who are often uncertain about whether they’re prepared to succeed in their new responsibilities – is failing to identify and find the people who are so good they could do your job, potentially even better than you could.

It’s a truism in business that “A’s hire B’s, and B’s hire C’s” – in other words, managers tend to hire people slightly less impressive than they are, whether out of not being able to appreciate better candidates’ qualities or out of fear that they would open themselves up to competition.

At Apple Inc., CEO Steve Jobs refined this concept, arguing that truly great employees – the “A’s” – would hire people as good or better than they were. But Jobs also warned that B’s would hire C’s, who would in turn hire D’s, leading to what he memorably called the “Bozo Explosion” that would occur in any organization where leadership didn’t maintain an ongoing and rigid focus on recruitment standards.

Nobody wants to lead a “Bozo Explosion.” Make sure you’re not only hiring people who will push you to be even better at your job than ever before, but that they’re doing the same in turn.

The return on hiring people better than you is immense. As legendary advertiser David Ogilvy would tell new managers while building Ogilvy & Mather into one of the first global ad agencies: "If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants."

Do Your Job, Not Theirs

Possessing great leadership qualities doesn’t necessarily mean you have to handhold your team. Some of the most famous leaders in American business history agree that one secret to their success was simply not interfering when the great people they hired were doing the jobs they’d been hired to do:

• Berkshire Hathaway chairman and legendary investor Warren Buffett: “This approach seems elementary: if my job were to manage a golf team –  and if Jack Nicklaus or Arnold Palmer were willing to play for me – neither would get a lot of directives from me about how to swing.”

• Auto industry giant Lee Iacocca: "I hire people brighter than me and get out of their way."

• Apple CEO Steve Jobs: “It doesn’t make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.”

In a dealership environment, one of the quickest paths to disaster is to have leaders who don’t let the people they’ve hired do the jobs they were hired to do. It’s a fast track to employee dissatisfaction, poor performance, unhappy customers and missed metrics. Those with great leadership skills understand their role is to make sure the job gets done not by doing it themselves, but by putting the right people in the right roles with the right resources to do their jobs.

Ask yourself: For every metric you’re holding someone responsible for meeting, do they have the skills, resources and authority to do what needs to be done to meet that metric? If they lack any of those three key factors, then the fault is on you as a leader.

Oftentimes, dealership leaders see employee training as a hassle, an expense or a certification requirement that gets in the way of doing business. While it’s certainly an investment of time and resources, part of being a great dealership leader is getting to know and understand your people and their skills, then identifying the places where they could accomplish even more if they had the training necessary for personal and professional growth. Automotive leadership training can yield profitable results. According to Gallup, talented leaders contribute about 48% higher profit to their companies than average managers.

When it comes to resources necessary for doing the job, don’t just think about tools, desks or funding. In today’s dealerships, the most important resource is information. This is why Mastermind’s Market EyeQ is such a powerful automotive marketing tool for dealer leaders, as it spreads that critical resource throughout the dealership to everyone who needs it.

Once you’ve ensured your people have essential training and resources, it’s easier to give them the authority they need to make day-to-day decisions. Great leaders ensure nobody on their team ever has responsibility without the necessary authority, or authority without the attendant responsibility. You can’t make every decision, but the people who are making decisions must be accountable for the results.

Build a Dealership Culture You’d Want to Join

In the same shareholder letter where he talked about hiring skilled people and then getting out of their way, Buffett also noted the importance of building a team of people you like and enjoy spending time with: “We intend to continue our practice of working only with people whom we like and admire. This policy not only maximizes our chances for good results, it also ensures us an extraordinarily good time.  On the other hand, working with people who cause your stomach to churn seems much like marrying for money – probably a bad idea under any circumstances, but absolute madness if you are already rich.”

Today, we call this “culture,” and it’s arguably your most important job as a leader.

We’ve written previously about the importance of culture in dealerships. We focused primarily on customer experience, but no dealership with a terrible employee experience can deliver on a great customer experience. You can tell when you’re at a store or office where the employees are there begrudgingly and are taking their unhappiness out on the customers. Your dealership is no different. It’s very difficult for your employees to dedicate themselves to your customers’ happiness if they don’t feel that same commitment from you in return.

Are you giving your team the training and tools they need to do their job…and do it well? Contact us today to schedule a free demonstration of Market EyeQ and learn more about how it can help you enhance your leadership skills through reporting, accountability, and giving your team the ability to work efficiently.

Today’s car shoppers are deeply concerned about affordability, more informed than ever before about the finance and insurance (F&I) options available, are less willing to spend time dealing with paperwork, expect a personalized sales experience and are willing to walk away from a long-time business relationship if they’re not happy with how they’re treated. When your customers measure their dealership experience, the time they spend on F&I decisions and paperwork can make or break your customer satisfaction index (CSI).

F&I is a critical component of dealership revenues and profits. According to NADA data, the F&I process generates about a quarter of dealerships’ gross profit across new and used vehicle sales. Roughly nine out of every 10 new-vehicle purchases involve F&I, with more than 45 percent including a service contract.

This means there’s more pressure on your dealership’s F&I team to get things right.

Fortunately, there are 3 steps your dealership can take to make F&I more valuable both for your business and your customers. In this blog, Mastermind discusses:

1. - Why F&I matters to your customers

2. - How to make F&I a valuable contributor to customer experience 

3. - The important connection between sales and F&I

1. Why Customers Care About the F&I Experience

We’ve written before about the overall state of F&I in the auto industry, but it bears repeating: Financing has always been a pain point for consumers, but the evolving nature of sticker prices and financing products means affordability now tops auto shoppers’ concerns. 

This is the practical reason customers care about F&I as a component of their car buying experience. The other reason customers care is because it’s their least favorite part of the process of buying a car. The reasons customers dislike dealerships’ F&I experience range from it being cumbersome to the embarrassment of having to discuss personal finances with a stranger to the ever-present fear they’re getting ripped off.

For dealers committed to building a culture driven by customer experience, F&I must be a focal point of the overall customer experience strategy. This includes not only employee training and feedback processes, but also ensuring your team has the right information and tools at hand to make the experience as fast and frictionless as possible.

2. Why the F&I Department Matters  

According to FICO, 46 percent of U.S. consumers ranked “one-stop shopping” as the #1 factor for choosing dealership financing. To meet buyer expectations, dealers need to ensure their F&I process is as efficient and convenient as possible. Failure to do so risks the entire sale. 

For one in six customers in the U.S., just one bad experience is enough to get them to stop doing business with a company they’d previously been happy with. In the dealership environment, this means you can’t even take loyalty customers for granted when it comes to their F&I experience.

Among other factors, that means paying attention to not only what’s being sold, but how your team is selling it. For instance, one traditional sales model that drives many F&I rooms is what’s known as the “300%” rule of selling 100 percent of your products to 100 percent of your customers, 100 percent of the time. That may have worked in a time when the salesperson was the primary – if not only – source of information for the consumer on F&I options, but it’s not an effective model for today’s Internet-first consumer. 

In an era where the federal government has websites warning against credit life insurance products, F&I teams need to take a more personalized approach to which customers are open to being presented with the full suite of potential products and which have come into the dealership knowing what they want and just want to get the paperwork done. 

In conjunction with this, many dealers focus on constantly increasing how much of the F&I process they can accomplish before the customer ever arrives. If your dealership has committed to predictive marketing powered by an automotive sales platform such as Market EyeQ, much of the “homework” has already been done, since the analytic-driven personalized offers that brought the customer in the door are the basis for any F&I discussions.

Market EyeQ’s insights into your prospects and customers – powered by data from IHS Markit, CARFAX, TransUnion and more – give F&I teams a starting point for building an attractive set of offers, products and terms that fit the customer’s individual wants and needs. Market EyeQ’s insights eliminate the need to try to sell everything, allowing the F&I team to focus on selling the most appropriate products and delivering an excellent customer experience.

3. Improving the Relationship  Between Sales & Finance

One major opportunity for improvement in the F&I customer experience is to simplify and refine the handoff between sales and finance. Some dealers are improving the sales and finance relationship by making the showroom salesperson the primary touchpoint for F&I services, but there’s a growing consensus the training requirements alone for the two roles make this an extremely challenging model to do correctly. 

Instead of loading showroom sales teams with additional responsibilities, a more sustainable option of reducing the disconnect for customers between sales and financing is to base both processes on a sales platform like Market EyeQ that ensures everyone is working from the same information and insights about the customer. With these dealership data mining tools in hand, your F&I team can start with the right marketing offer, minimize the paperwork and time involved and improve your customers’ experience in their least favorite part of your dealership.

Are you looking for ways to improve your customers’ F&I experience without sacrificing your dealership’s bottom line? Contact us today for a demonstration of how Market EyeQ can help.

A customer walking into a showroom is often the first step in the car buyer journey. Next, is getting them to come back for regular vehicle service and maintenance. The ultimate goal? The customer returning for their next car purchase, and repeatedly for years to come. As a dealer, you want to exercise customer experience best practices in order to maximize sales opportunities and maintain relationships year-over-year. In this blog, Mastermind shares three ways to maintain relationships with customers and extend your dealership’s sales lifecycle:

1. - Make every in-person dealership experience positive and memorable
2. - Offer exclusive dealership rewards and loyalty programs
   - Utilize digital campaigns

Make Every In-Person Dealership Experience Positive and Memorable

It comes as no surprise that how your dealership’s team engages with customers has a major impact on customer loyalty and retention. Recent studies show that the dealership sales experience is the top influencer of post-purchase brand loyalty, followed by maintenance and service. Customers take notice of the small details, especially when a dealership personalizes the customer’s buying experience. For example, providing a waiting room space that maximizes your customers time with free WiFi and charging stations is helpful for people who had to take time off work for their car repair. A clean and organized office environment can also make a big difference to a customer. The dealership should be presentable, and each staff member should be focused on helping visitors find answers to questions. Put simply, a positive customer experience makes a buyer want to form a relationship with the dealership.

Offer Exclusive Dealership Rewards and Loyalty Programs

To build a loyal customer base, your dealership needs to offer exclusive benefits and unrivaled customer service. Even for loyal auto buyers, price is the number one buying motive, which may lead them to another dealership. Some dealerships have started offering dealer loyalty programs with rebates or special service offers to increase customer retention. Other unique options include digital campaigns through search and apps like Waze to reach customers when they are on the road, searching for service or maintenance services. 

Another dealer loyalty program tactic is to offer a rewards program for their customers, which may include:

- Discounted pricing for immediate family
- Free oil changes for life
- Special offers for referrals 
- Incentives for trade-in

Dealers need to focus on coming up with unique packages for their customers. Delivering exceptional value will keep your clientbase thriving over time and set you apart from competitors where price will always be the biggest decision-making-factor.

Utilize Digital Campaigns

Personalized digital marketing campaigns keep customer informed on deals and savings directly related to them. A monthly newsletter provides subscribers with useful and informative content like car maintenance tips, dealership events and auto industry news. A comprehensive sales platform, such as Market EyeQ by automotiveMastermind can generate personal messaging for every customer using existing customer data from your DMS and service drive. This sales platform uses social media interactions, vehicle history, real-time OEM and dealer data, and other relevant data points to deliver meaningful and personalized communications. This leads to higher conversion rates and a stronger ROI – all while being 100% brand compliant.   

Selling cars is the single biggest challenge of any car dealership, but by effectively focusing on the dealership customer experience by offering exclusive benefits and incentives and implementing targeted digital campaigns, you can increase your dealership’s car sales and improve customer relationships. 

If you’re interested in learning more about how your dealership can retain sales and enhance its customer loyalty, contact us today.