News/Publications

3 Ways to Strengthen Your Store’s Overall Performance

April 27, 2018

Ask any dealership owner whether he or she would like to strengthen the business’s overall performance and you’ll likely get a resounding, “Yes, of course!” But there is a legion of factors that affect performance — and not all of them are under your control.

For example, you probably can’t make drastic changes to your brand or your marketplace demographics, at least not in the short term. But you can focus on other goals within your control to bolster your dealership’s performance.

1. Increase customer loyalty

Most dealerships spend a lot of money on advertising and marketing designed to bring new customers in the door. However, it’s usually much less expensive to retain existing customers than attract new ones. According to the Harvard Business Review, acquiring new customers is between 5% and 25% more expensive than retaining existing ones.

This is why increasing customer loyalty is a top priority for many high-performing dealerships. There are several steps you can take to increase repeat business.

One of the best ways is to encourage buyers to visit your service department for regular vehicle maintenance and repairs. For example, you could offer a discount on their first oil change and tire rotation to get them back in the door soon. Also take buyers on a tour of your service facilities and introduce them to your service department manager before they drive off with their new vehicles.

Your ultimate goal should be to ensure that customers return to your dealership when they’re ready to buy their next vehicles. This requires a communication strategy designed to keep your dealership top-of-mind with customers over the long term. Social and electronic media can be effective tools for accomplishing this.

For instance, publish a regular e-newsletter with tips on car maintenance and news about your dealership, and ask customers to follow you on Facebook and other social platforms. You can use these platforms to publicize special events and promotions at your dealership and engage customers on a one-to-one basis by replying directly to their comments.

2. Boost employee satisfaction

Many businesses claim that “our people are our greatest resource,” but their practices sometimes indicate otherwise. Top-performing dealerships tend to place a strong emphasis on managing their workforces so that employee satisfaction levels are high and turnover is low.

The first step in boosting employee satisfaction is creating the kind of work environment that shows staff members you care about their personal well-being as well as their job performance. For example, many dealership employees today emphasize that a healthy work-life balance is important to them. You can help your employees achieve this by limiting their workweek to no more than 40 or 45 hours.

One of the reasons listed by some former dealership employees for why they left is that they don’t feel like there are opportunities beyond their current jobs. So be sure to provide mentoring and, where possible, steer them on a track to a higher-level position.

3. Conduct business and strategic planning

Managing the day-to-day operations of a successful dealership sometimes leaves owners and managers with little time to step back and look at the big picture. However, it’s important to set aside time periodically for business and strategic planning.

Top-performing dealerships regularly practice both types of planning. Business planning is more operational in nature. It lays out goals for the different areas of your dealership — from new and used car sales to parts and service and F&I — and details the tactics you’ll implement to reach these goals.

Strategic planning, meanwhile, focuses more on the big picture by answering such questions as:

• What is the mission and vision for the dealership?

• What values are most important to us?

• Where do we envision the dealership five or 10 years from now and how will we get there?

Meet with your key executives and leaders at least once a year to conduct strategic planning exercises in which you discuss questions like these.

Sharpening your focus

By focusing on suggestions such as those offered here, you can improve your dealership’s performance and boost your bottom line. Of course, what will work best for you will depend on the distinct workforce and market challenges you face.

© 2018