Alan Ram’s newest article: “The Writing Is On The Wall!”

Alan Ram’s newest article: “The Writing Is On The Wall!”

I have a friend who is in his early 50’s and has been enjoying the hell out of life. Whereas every day, I myself want to eat doughnuts and chicken wings, I never eat donuts and chicken wings. What I want to eat and what I end up eating are two completely different things. My friend has never felt this conflict in his life. He wants it, he eats it and then he washes it down with a six pack. To go with his bad eating habits, he also has an almost virgin gym membership that he’s been paying on for who knows how long. Well, recently his sloppy lifestyle caught up with him when he woke up in the middle of the night with what felt like an elephant sitting on his chest and pretty sure he was about to die. Fortunately, the paramedics made it there in time and got him to the hospital where doctors performed who knows how many bypasses and Frankensteined his heart back together again. This event was apparently the wake-up call he needed as he has now dedicated himself to eating clean, losing weight and exercising. Unfortunately, the damage is done and his heart and he will never be the same. My question is, how did he not see the writing on the wall years ago?

The writing is also on the wall for many in the automotive industry. It’s been a great run we’ve had since 2009 or 10 but like they say, the best of times breed the worst of habits. Many people are predicting a cardiac event for this industry in the not-too-distant future the severity of which has yet to be determined. The question is this; as a Dealer or General Manager are you going to wait until it happens to make the changes that will be necessary to not only survive, but thrive? Let’s face it, most dealerships biggest “expense” is missed opportunities to do business.

My friend John Marazzi says that “it’s not who sells the most, but who spills the least”.

Let’s look at where most dealerships are “spilling.”  How about on the telephone which is most dealers biggest profit leak? Sit down with your managers for about an hour and listen to your call monitoring. Are you maximizing those opportunities? While most managers will chase a customer all over the showroom and out to their car in order to avoid missing a deal, they don’t seem to worry nearly as much about customers getting blown out all day every day on the phones. Next, take a good close look at those salespeople spending hour after unproductive hour staring at and or waiting by the front door. We all know that customers today are shopping way less dealerships in person. They do much of their shopping online and with the optimization of “click to call”, back to the phones. They’re all over social media as well. We know this logically yet we see salespeople focused on the front door 1992 style. They may as well be waiting in front of Blockbuster Video waiting for it to open!

If your salespeople are spending hour after unproductive hour standing around waiting for customers, you need look no farther than your managers for the reason. Those are the same managers who are most likely sitting inside “hoping” someone brings them a deal today. Nothing will slow you down faster than managers who don’t really know how to manage and drive activity. Let’s face it, while most dealerships have “managers” who know how to desk and close deals, they don’t all have people with good management skills. Going forward in the automotive industry, I feel very strongly that great managers will be defined not just by what they do when they have a showroom full of customers, but by what they do when there are no customers in the showroom. Don’t let anyone fool you; if you pull up to your dealership today and see a bunch of people standing around doing nothing, your managers aren’t doing their job. Either you have great managers or you had better get them the training to be great managers. I’m as serious as a heart attack.

Next, ask yourself this; how many floor ups do you anticipate your dealership getting today? I would guarantee that number is dwarfed by the number of customer pay repair orders being written on your service drive. People drive their old cars in to your dealerships service department all day every day. These are people that if presented the right opportunity, the right way at the right time would very likely buy a car, yet most of your salespeople and managers remain transfixed by what might be coming in that front door. In addition, those service customers would be more likely to pay a fair gross profit because they have not yet shopped fifteen of your closest competitors. That’s right, the rules of gross profit have changed. Have you changed your approach with them? How much manpower do we actually have dedicated to converting service clients back to sales. If 3% plus of your service clients are not converting to sales, you’re missing a huge opportunity for not only volume but gross profit as well.

Making sure that we are doing the right things, the right way every day is the key to a long and prosperous future. You must be proactive and not wait for the proverbial s*** to hit the fan before making the changes you know you need to not only survive, but thrive. If you would like to really get ahead of the game and learn countless easy to implement strategies for ensuring your dealerships continued success, please look into attending one of our upcoming Management By Fire events. The writing is on the wall. Don’t wait until the elephant sits on your chest!