18 Mar Are we in for another 2008-like crash in the economy?
Is the sky falling? Are we in for another 2008-like crash?
Auto dealers we speak with are anxiously looking at 2019 as the year when the economy will collapse. They’re bracing for a hit similar to 2008 and are running for cover. Is this all hype, or is there validity in this pandemonium? With headlines from the NY Times that read “Are You Ready for the Financial Crisis of 2019? Here are five ways things could get bad for everyone”, I really can’t blame people for being cautious. I decided to investigate if these fears are founded and I want to offer some insight on what dealerships need to do to protect themselves in the event that it does. So where is all this hype coming from? Is it because things are so good right now that we’re just waiting for it to go south?
The Federal Reserve put out a study that basically said there are wide spread errors in making predictions based on economic indicators like unemployment, inflation, interest rates and gross domestic product. The study concluded that “considerable uncertainty surrounds all macroeconomic projections.” GDP growth is headed to 3%, higher than the 1.6 growth of 2016 and 2.2% growth of 2017. The job market is strong with an unemployment rate of 3.5%. Its true interest rates are rising, leaving people with less disposable income but the housing market is still strong. For years we have been waiting for the housing market in Southern California where I live to go down but we’ve seen little change.The truth is, it’s hard to accurately predict when the market will soften and how much of a decrease there will be in car sales but there are things that you should be doing as a dealership to keep you ahead of the pack:
Stay in touch with your customers
It’s now more important than ever to stay top-of-mind with your sold customers. Did you know that repeat customers close at 75%? Is your dealership nurturing these relationships? One thing that we see very often is that salespeople have a hunter mentality- they go in for the sale, hit it hard and once they have it, they go onto the next sale. However, the most successful salesperson also can balance their hunter mindset with that of the farmer- the one that tends to the sold clients and takes care of them until they’re ready to come back into the market again. Being able to tune into both the hunter and farmer mindset is what will really set your sales team apart and poised to succeed.
To that point, how are your guys following up with these sold leads? They should be ideally calling sold customers 3 days after delivery and following up on a regular cadence of 60-90 days thereafter. What’s more, they should be connecting on social media. The information they glean from their client’s personal life will help them build greater rapport each time they follow up. Also, don’t forget sometimes the old fashioned birthday card is also a great way for sales people to stay in touch with their sold customers. Reaching out in a variety of ways consistently can almost guarantee that when that customer goes to buy their next car, you’ll be at the top of the list of people that they’ll go to.
Focus on delivering a positive experience at every touch point & be consistent
Whether your customers are going online, using your web chat, calling into your dealership or on the showroom floor, you want to make sure they have a positive experience. More so you want it to be predictable and the information that they receive be consistent. This covers everything from your branding look and feel to how your team communicates with customers.
Are they calling into your dealership and being told one thing by your BDC and then coming into the dealership only to have a salesperson look at them sideways wondering what they were told? Same with your online leads coming in — are customers being given the same information that they’ll get in store? Ideally you want to have a streamlined process from the customer’s first point of contact with your dealership until the time of delivery. Consistency is key and as a result will leave you with satisfied customers. We know the best marketing is word of mouth and the best way to drum up more of it is through satisfied customers.They tell their friends and with referrals closing at 65%, they’re your next hottest lead.
Maximize on every lead that comes to your dealership
Most dealerships don’t need more leads- they need to do a better job with the leads that they have. You likely spend thousands per month on advertising for your dealership. Do you have a process in place for how to answer those leads whether people call you or go online? Everytime your people pick up the phone and don’t know what to say or say the wrong thing, an opportunity is lost. Taking leads either on the phone or online is a privilege and only those sales people who are properly trained should be allowed to handle them.
Pro Tip: Download our call-monitoring checklists to ensure your team is responding the right way to incoming inquiries.
Focus on your people
What’s the most common problem in dealerships across the country today? Finding the right people and retaining them. Our industry is faced with the some of the worst turnover rates at nearly 80%. Do you know that turnover costs the average-size dealership close to half a million dollars per year? Why? Because we don’t train our people.
By throwing someone into a role and offering no training, we’re effectively setting them up for failure. Imagine asking someone to build a house and giving them a hammer and nails. They’d eventually get frustrated and quit or maybe they’d be tough and get it done. Can you imagine how much quicker and more effective they’d be if they had the right tools to actually build the house? We need to give our people the tools they need to succeed. Many of you tell us your managers were previously successful sales people, so you promoted them to managers. But were they actually trained for that role? Chances are they weren’t.
If we had a crystal ball life would be much easier. Unfortunately we don’t. The truth is we have little control over the economic factors influencing our business but we can control how we react. Now is not the time to run for cover waiting for the sky to fall, it’s a time to take action, tighten up our processes and position ourselves to win. While the weaker dealerships will be cowering in the corner the stronger ones who proactively take action will be the ones to prosper even in a down economy.
Call us at 1-866-996-4665 to learn how we can help you put processes in place that will strengthen your team and boost traffic into the dealership in any economic climate or schedule a quick demo with us today.