3 Things NOT to Do in a Flat Market

May 15, 2019

It’s clear that the automotive industry is seeing a flattening in the current market, new car sales numbers fell again last month by While the current market continues to dip, dealers are telling us that they’re sitting on more inventory, watching their floor-plans increase and seeing fewer opportunities come through the front door. Dealers are staring dwindling profits in the face.

That in mind, the focus of this article is to try to look at this current flattening differently and try to evolve some parts of your dealership’s operational strategy instead of cutting valuable resources or partnerships loose that could, in fact, be a true asset.

Here’s what we’d like to suggest dealerships try NOT to do during a flat market:

  1. Canceling Software Contracts– Stop cutting software contracts because “no one is using it”. It’s all too familiar in markets like this. Sales slow-down and management quickly looks for ways to save money. Cue the task to the Operations Manager to go audit all software contracts and assess what to cut. The Operations Manager does the quickest assessment pulling only a simple usage log and reports back.. Management then immediately contacts the vendors and cancels their contracts., usually within 30 days. Here’s what we challenge leadership teams to do. Instead of just auditing based on usage, base your decisions on which software will help keep you profitable. The irony here is someone in management (or ownership) signed a contract for the software in the first place based on perceived value. Now, due to a lack of adoption and accountability, no one is using it. The other side of this is there is a chance a manager who brought in a system is no longer in the dealership, easier to rip all their work out and start over right? Wrong. Sit down with each system and be honest about if it can help.Those providers you feel can still help, will be happy to regroup with you to get you and your team re-familiarized with the software. Now is the time to be the best performing team and knowing which vendors can help with this will help you push through this down market.
  2. Don’t Feed the Sharks– Sweating out a quiet showroom isn’t fun for anyone, the less traffic coming through the door causes stress for both management and staff. Some managers seeing the team having a tougher time reaching the target will fall back into old habits and start favoring and leaning on the top salespeople, sharks, rockstars (insert current nickname here) to hit your target each month. We get it, these folks have proven all along they can get vehicles off your lot, but at what cost? Most “sharks” don’t have to keep to the processes that the rest of the staff tasked to uphold. They don’t have to spend time logging things into your CRM, which you’ve invested a lot of money and time in. They can burn through walk-in customers creating an unpleasant customer experience in the showroom. They are basically given a free pass to do things their way so you reach your target. This will hit your staff culture hard and cause bad habits to run rampant throughout your teams. “If she doesn’t have to log customers, why should I?” It’ll happen faster than you think. So, use this time as a management team to MENTOR your staff more. Ensure that each person on your team is armed with enough information and guidance to produce the best results for the dealership. Get on the floor, ensure that manager intros are happening early and often for all customers walking into the store. A manager intro alone will increase closing ratios by 10 to 15%.
  3. Stop Learning– As expenses get trimmed to take the same approach mentioned in the first point and apply it to your training budgets..  We understand that it may not be in the cards to send people away for training or conferences, but there are ways to ensure that you are giving your team the opportunity to learn something new or refresh prior training at lower costs. Look at what your vendor pool offers in the way of webinars or free downloadable content. What podcasts are available that you and your team to listen to as a group and discuss? Look at that exercise as the modern book club, pick a podcast a week, everyone commits to listening to it and discuss at a team meeting. Someone could bring a killer idea to the table based on what they heard. Ask for re-trains from your venders, ensure that everyone understands how to get the most out of a platform that could keep you profitable when other stores aren’t. Here’s a free download from us, we reached out to our industry friends to build an eBook of small actionable strategies you can implement during a down market.

Three simple things NOT to do in a flat market. It’s not that daunting and we’ll let you in on a little secret. Out of everyone that reads this, only a very small percentage will take these away and try to evolve their processes and teams. Most will decide to just “wait it out” and hope the damage isn’t too bad once things start to improve. So, if you do decide to take small steps at optimizing through a flat market instead of doing nothing your dealership will be in a better position to be lean, efficient and profitable regardless of market conditions. Wondering if your dealership can achieve these goals? You can!



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