I performed a study of several markets including Los Angeles, Dallas, Atlanta and Charlotte focusing on the effects of market share swings from month to month. I compared a dealer’s new and used monthly volumes against the entire franchised competition as well as against similar brand franchises. What I found is that some dealers are able to retain as much as 60% plus of their market share from their worst months to their best months, while others retained 40% or less. The stores with the higher retention rates were regarded by their competitors as the more successful stores, while the ones with the lower rates were often referred to as ‘on shaky ground’ or dealers who would go all out with their marketing one month and pull back on others.
When interviewing dealers regarding this concept; retention of market share from month to month, dealers cited the following negative effects of large swings of market share from one month to the other: Staffing problems, financial projection problems, end of month deals made with no profit in them, uncertain marketing expenses as well as other negative financial results.
By using historical market share data, a dealer can see the short-term as well as the residual effects of initiatives they have taken in the past to better gauge what they should be doing in the future. This means that the importance of utilizing market data is extremely important in running an ongoing successful operation. Experian and Polk offer Auto Count and Cross Sell respectively for this purpose. Too often dealers get this information and know not what to do with it. Within these reports are keys to what is working and what is not.
Getting the reports is one thing, getting the historical reports and manipulating the data to reveal the keys to past success and failure is another. I highly recommend that dealers contact Experian or Polk for this data as well as at least the past two years of data. I also recommend that you work with these companies to help you manipulate the data in such a way as you can chart out your past in order to chart out your future. This also means that you should order this data in Excel, not in PDF format so that you can work with the data.
note: if you are interested in seeing some of these studies, please contact me.