Car Technology

If you want a culture that promotes profits and innovation, then stop focusing on the “star” system or “top-down” command. What works is “community.” – Kimberly Weisul, January 3, 2011.

In these tough times we are seeing many dealerships grasping for growth strategy straws that in the long run will prove counter productive to their growth. Select negative retail issues for many revolve around;

• Inflexibility in understanding how digital fits into the direct sales equation and the maintenance and building of continued customer relationships,
• Allowing inflexible closed looped CRM data services to impede/dictate customer relationships at the expense of common sense sales contact processes and intuition,
• Unaggressive approaches to the basics of vehicle selling brought by loss of employment fears and the safety of old ways,
• Grand fathered employees from previous ownership that impede the timely and efficient flow of internal sales and delivery processes,
• Dealership unionization
• Retail management that places more importance on micro managed witch hunts and blame placing rather than providing real solutions to process and personnel issues and errors.
• Unchanged and counter productive retail operational assumptions and a lack of vision about new retail business practices which negatively impact retail growth,
• Lack of dealer wide integrated pay plans which result in lack of shared success.

In many cases these negative issues and management styles lead to mentally crippled and dysfunctional employees, a shut down staff, which exacerbate the lack of customer orientation in all tasks performed. Dealer ship use of countermeasures that appeal to people’s sense of fear, writing another procedure (or adding to existing ones), disciplinary measures, threat of litigation, retraining, naming, blaming, and shaming is emotionally more satisfying that blaming the institution or process.

Key performance indicators and retail goals are relatively easy to set. But harnessing the limited inside and contracted outside talent to move beyond individual chimneys will become a major impediment to real retail growth solutions. Middle managers often are the most threatened and can do the most to undermine new initiatives. This group usually requires special education and training for without their taking ownership, change efforts are doomed. Although the sales dollar volume is large, dealerships really are small businesses that require solutions that are affordable and capable of being implemented.

Common Causes for Lack of Retail Growth

This following is a list of common causes for dealerships failing to improve. They often require custom solutions to move in a positive direction:

• Poor employee climates (high to low turnover)
• Inconsistent processes (no documentation to consistent execution),
• Poor financial management (Low ROI/ROA to high ROI/ROA),
• Lack of direction (no plans to goals attained),
• Ineffective leadership (autocratic management to team/coaching).

Key retail indicators/goals and metric sources for the above might include:

1. Employee Enthusiasm through employee surveys,
2. Continuous Improvement through observation, documentation and measured improvement,
3. Profit through financial statements,
4. Market Share through manufacturer data,
5. Customer Satisfaction through manufacturers surveys

But, in order to build a successful organization, we believe that you must start with the proper raw materials for success which include; strong desire to improve, open to new ideas and a willingness to learn. Of the three, we believe a willingness to learn is the key to sustainable improvement. In order to find solutions to common causes of retail growth abuse it is important to understand that each dealership is unique.

Therefore, the following partial list of retail solutions will change in importance based on each unique retail situation. But, they provide some very critical success factors that most dealers will find appropriate.

Solutions:

1. Poor employee climates(high to low turnover) – compensation plans, departmental communications, employee relations, spiff incentive programs, and of secondary impact; technical apprentice programs, monthly performance summaries, service adviser training, parts counter man training, service parts body mgr. training.
2. Inconsistent processes (no documentation to consistent execution) – customer retention, work flow, paper flow, dispatch procedures, estimate training, paint and materials control, production, inventory setups, special order parts procedures, reconditioning shop setups, dispatching systems, monthly performance summaries, warranty procedures.
3. Poor financial management (Low ROI/ROA to high ROI/ROA) – fixed ops performance analysis, compensation plans, customer retention…

Contact White Associates for a free review to help your dealer or association achieve greater performance. Create an environment where continuous improvement is the focus of all managers and employees.