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Jared Hamilton
From: Jared Hamilton
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James Patrick Kahler

James Patrick Kahler Copywriter & Content Specialist

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3 Telltale Signs You Need To Modernize Your Auto Dealership

6722a054629ecebee42c61d8d4da2bc1.jpg?t=1Have you ever seen an old picture or video of yourself from back in the day? One where you’re wearing some ridiculous outfit and then try to justify it by saying something like, “well, it was the ‘80s!” Unless you’re still going for that look from several decades ago, then you know the importance of making changes.

Old habits die-hard, yet they do eventually go away and it’s usually for the best. When innovation flourishes, whether it’s through pop-culture or industrial progress, it’s good to know when to make a change for yourself, especially if you’re a business owner. 

Retail automotive operations are changing and it’s time to take notice for the sake of your own auto dealership. If you haven’t took the initiative to bring your dealership into the modern era of business models, here are three key indicators that it might be time for you to do so:

3 Key Indicators

1.) Technology Is Coming To Automotive Retail

More and more companies are investing in technology businesses entering the auto industry. According to a recent TechCrunch article, “There have been 33 major equity transactions and investments worth $35 billion in automotive retail over the last 18 months.” The same article goes on to mention that “…the influx of outside capital is a big game changer for an industry that has been more akin to moving at a slow pace but must start gearing up for the inevitable havoc that mobile, social, and big data technologies inevitably bring to established business models.”

2.) Demographics Are Changing

This goes for both dealership customers and employees. TechCrunch says that “Millennials have spearheaded disruption in the automotive industry with a major focus on pricing transparency, a preference for the ease of digital transactions, and the fundamental expectation that their car should simply be an extension of their “always on” mobile lifestyles.”

Hireology has found that in 2014, 48% of all new hires were Gen Y employees. The millennials now make up 29% of the average dealership workforce—an increase of 6% compared to 2012.

3.) The Traditional Dealership Model Is Dying

Many dealerships are now recognizing the importance and need for updating their operations. TechCrunch predicts, “…that by 2025 the dealership model as it exists today does not exist. It has instead morphed into positions within the Digital Marketplace and/or Mobility Service Providers roles.” The technology news source goes on to suggest that dealerships must “…position themselves for future success, dealerships need to understand hot technology disruptions are impacting their business environment, embrace the digital revolution in their customer relationship and back office data management processes, and hone their digital marketing chops to remain relevant.”

“They also need to think hard about the type of skill sets the dealership will need going forward that can provide, nurture, and retain the connected consumer for life across all of their automotive mobility needs.”

What To Do

For starters, get the right people on board at your location. High turnover is a well-known issue for the auto industry. Here’s what Hireology has identified has crucial problems facing dealerships and staff:

  • People are the number one cost for dealerships
  • 75% of dealers report having trouble with hiring
  • Hiring the wrong manager can put a dealership behind 6 months
  • The cost of replacing a bad hire is between 3 and 10x compensation

Not sure what else to do? Here are some tips from automotive experts on how to build a better team at your dealership.

Larisa Bedgood
It should be interested to see how dealers evolve. I'm still looking forward to having real opportunities to buy from dealers online!
Jay Smith
For obvious reasons, I think the first point is the most pertinent. Technology is transforming everything and dealerships aren't going to be left behind. Large (sometimes entire) segments of the buyer's journey are happening online and this can't be ignored. Paul Moran wrote an interesting post hinting at how the dealership salesforce needs to be brought up to speed: http://www.drivingsales.com/blogs/vboost/2016/01/29/your-employees-may-be-doing-social-media-but-they-really-know-how-to-use-it
Brandon McNett

Solid article, thanks for writing it!

Randy Taylor

Technology isn't coming to dealerships. It's been here. But like any other process dealers work through, like the tide, it's flowing out and apparently becoming viewed as less important. My mystery shopping reveals that lead response isn't measured in minutes. It's become hours, if not days. Spelling and grammar? It's easy to see that current internet professionals grew up with spell check.  One dealer emails me almost daily. Nowhere inside of the email does it mention the dealership. No name. No logo. No clue. And the email address does not include the dealer name. If we want professional leadership in the technology based internet department, it's time to treat the manager like a manger. Since 2000, I've not seen that properly done. Not in praise. Not in pay. Not in respect. Overall, dealerships need to begin treating their staff with more respect and better pay. Regardless of what the government tells you about unemployment numbers, it's tough finding a job out there. And there are a lot of young, bright folks looking for work, who don't want to spend 60 hours at work being treated like cattle. I've always said, the auto business is its own worst enemy. It's time to wake up and move forward. Rearview mirrors are for cars, not seeing the future of our busines.

-Randy

William Phillips

Dealerships cause their own sucess or demise, because the worst person to lie to is yourself.  Having departments for clients is a classic example of such poor thinking.  Amazing that while complaining dealers need to improve, we expect that improvement while practicing 80's thinking.  Departments are just such backwards oldschool thinking.  Sales staff should be hired based on their drive and ability to learn, their age doesnt matter, young or older. These sales people should not be grouped by a department, they all should do it all.   Managers should be hired and fired based on their ability to manage from the CRM and the results the CRM says they produced.  Every other industry that is growing, manages their data, studies their data and grows by acting on their data.  Impossible to do that if you dont know your data, because you cant manage the tool that produces your data.  This is at the core of having a modern dealership.  

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