The following is a post from Mark Rikess of Rikess Consulting.
It is important for dealers to understand that the primary consumer purchasing drivers have changed. Historically customers sought out the “best deal” and dealers promoted that they “would not be undersold” and had “the lowest prices in the market.” For service, coupons and specials were the traditional drivers. Eventually consumers moved on from seeking the best deal to looking for, and sometimes demanding, a great dealership experience. Economically it was better for dealers to compete on experience but still a very challenging model to adapt (one price selling; extended service hours; guaranteed oil change times; etc.) Now the majority of consumers are primarily looking for convenience and ease of purchase; call it the Amazon effect.
This means dealers will have to create different offerings to satisfy today’s consumer.
Where to start: Create internal committees to review key customer facing processes. Review those processes through the lens of: ease of purchase and convenience. Start with what the majority of customers want and work back-words from there.
Processes that clearly most of your customer’s want:
Home or office service pick-up and delivery. Dealers lose over 70% of their owner base to independent repair shops. It is not because they are much less expensive; have better technicians or parts. It is totally about convenience, which leads to significant owner retention and therefore more dollars per R.O.
Some things we learned once the pandemic hit:
Dealers were forced to do more with less people. The lower performers, those employees not fully engaged or highly skilled were most often furloughed or terminated, leaving only the A+ employees. They had better skills and knew their performance was critical, especially early on, to keeping the dealership operating. Although as business improved dealers needed to “staff up” most did not bring back those who couldn’t stretch to do an “A-Job.”
Technology systems were also more fully engaged…”My staff was finally optimizing the technology systems we’ve been preaching about for years.” An excellent technology system creates higher levels of productivity typically at a lower cost. With less margin for error due to lack of customers, in-place technology systems become part of the “life support systems.” As one Service Director said, “We left a lot of boxes ‘un-checked’ because we didn’t think we could implement the full capabilities of the technology…Now we’ve gone back and checked those boxes.”
A final thought a dealer left me with: “One of our biggest hurdles going forward is not reverting to our previous bad or at best mediocre habits. As business is beginning to return to normal, how do we ensure we don’t fall backwards into our comfort zones.”