In a shrinking Market, Don’t look at your numbers, look at your Market Share.

There are many things you can manage as a General Manager or Dealer Principle at a car dealership.  There are also, many things that are completely out of your control.  It’s time to concentrate on those things that you can control and stop looking at simple volume numbers to determine your success.

You don’t have the ability to determine how many total opportunities are out there in any particular time period.  The ebb and flow of how many buyers there are at any point in time is not easily manipulated by a car dealership, even with ‘can’t miss’ incentives.  What you can do, is to capture as large a share as possible of those consumers who will or might buy during a period…and do it in the most cost efficient way possible.

Market Share retention and growth is much more important as an indicator of success than is Volume from one month to another.

Yes, it’s true that volume is where the profit may lie, but if you are in a market where 50% fewer cars are being sold than were sold 6 months ago, you really have no logical reason to carp at your dealership selling 30% less.  To concentrate and plan around volume is to ignore reality.  The dealer who sells only 30% less in a market that is selling 50% less is the Market Share winner, not the loser.

And, if you try to force the market to yield volume while in a downturn (e.g. event sales), you are only borrowing future numbers and paying a company a commission to do so.

If you are using Auto Count or Cross Sell, order a market report for all franchised dealers in your area showing market share month to month over the past couple of years.  Have the representative at Experian or R. L. Polk help you put together the report to give you what you need.  Look at your month to month increases and decreases in market share and then correlate those months with your past calendars of what you did during those months. Look at what your market share did the months after an ‘event’ or during a direct marketing campaign or TV blitz as well as after.

You want to study something that will give you useful information for the future? Look at the useful information from the past.

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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.
This entry was posted in Auto Dealer Solutions, Dealerite Blog, Uncategorized and tagged , , , , , , , . Bookmark the permalink.

2 Responses to In a shrinking Market, Don’t look at your numbers, look at your Market Share.

  1. Good post-makes so much sense

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