Moving the Needle #1

The foundation for market share growth, or growth in any industry centers around Capacity and Opportunity.  These are the two pillars of sustainable growth.

Capacity:  The dealer’s capacity to move iron consists of a combination of inventory, the dealership’s physical capacity and a staff’s potential to convert the opportunities that are derived from marketing, reputation, prospecting, etc.

Opportunity: There are only so many people in a market who are going to buy vehicles.  The dealership’s ability to stay in front of those people while in their buying cycle on a consistent basis, is how those opportunities continue to fill the pipeline.  The dealership that does this in the most cost efficient method will have addressed this pillar of sustainable growth.

The very nature of growth in business is NOT conducive to large market share gains in short periods of time that are sustainable.  When quick growth is attempted, there are, more than often, a series of unintended consequences that should not be considered ‘unexpected’. 

Here is an example of an unintended consequence: Large scale promotions (staffed events) that increase traffic, but at the same time discourage those actually ready to buy due to the crowd.  If you doubt me on this one, take a survey of a dozen people.  Ask them this: “You are ready to buy a Honda/Chevy, etc. and know exactly what you want.  You find yourself with time one day and know that a dealership that sells that car is on your route, so you stop in.  You see an event going on with dozens or more people standing around and a lot of commotion.  What do you do?”  The answer I get almost every single time is to turn around and go elsewhere because it looks like the transaction will take a much longer time than you planned because of the crowd.

Also, see blog on cannibalizing the Market. 

More on Capacity and Opportunity to come.

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About dealerite

National affiliations of professionals who are engaged in changing the culture of the automobile retail business. Key focuses currently include Compliance, Behavioral Marketing and Phone Skills.
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