Hint: It involves implementing a digital retailing strategy with messaging woven into it. And we’ve got a guide to help you make it work. SEE HOW
Dealers are incredible business owners. Show me some other business where the owners operate on razor thin margins the way that dealers do and I’ll commend them equally. It’s amazing that a company can make a grossly larger profit selling a $1,500 piece of furniture than they can by selling a $40,000 car. Boggles my mind.
Why are dealers so successful in this endeavor? Two reasons: consistency and execution. Dealers who can’t execute or consistently walk through the same process over and over again don’t last long in the business or at least aren’t making any money at it.
But while operating on such slim margins, what boggles my mind even more are some dealers’ unwillingness to adapt to the changing business environment. Whether it’s new technology in the industry, the social networking influence, or even the rapid decline of the newspaper, some dealers refuse to face the surrounding changes.
Why is this the case? The most ubiquitous response I hear from dealers all across the country is they don’t have to make any changes – they’re already making money.
If I was walking a tightrope of profit they way dealers do, I wouldn’t bet the farm on the notion that such a tightrope was going to get any thicker simply by staying on it. You have to make changes, adapt to the business climate, and invest in training that will help to excel your already top-notch consistency and execution to a new level.
Take, for instance, the 2012 TIME Dealer of the Year, Mike Shaw. Mike’s been in the business going on 45 years now, and this old dog is constantly learning new tricks. When DrivingSalesTV sat down with him for an interview last week, he shared a telling story of just how adaptable he is to the market. He described sitting at a table with some people in his company, including his son who is up and coming in the ranks. Mike proposed to the group that he was dropping his advertising investment in the newspaper – cold turkey. For a company that spends $1 million in advertising budget annually, that’s a huge adjustment. His only words after making the declaration were, “I only hope I’m not a year or two early.” As politely as possible, his son responded with “Perhaps you’re a year or two late.” Mr. Shaw hasn’t spent a dime on newspapers for the last four years, and hasn’t seen a decline in business because of it.
I don’t share this story to say that newspapers are obsolete (although that can be debated in a separate discussion). What I find incredible is for a man who has been in the business for 45 years, he is perceptive enough to know that if he doesn’t adapt and leverage the market as it’s changing, the days left in his already honorable tenure in the business will be numbered. So he stays on top of the game, always learning, always, training, and always challenging himself and his auto group to be better and, thus, sell more cars.
The old dogs – and even more so, the new ones – can learn new tricks and have to. Having razor-thin margins requires selling in volume with the most efficient marketing possible. Don’t be satisfied walking a tightrope when you can at least give yourself the benefit of a 2x4.
*Keep an eye out on DrivingSalesTV for when the full interview with Mike Shaw becomes available.