Market Share Retention: What it tells about decision making

Market Share Retention is simply a month by month measurement of how well a dealership is run and the decisions they make.  It is reflected by, not the numbers, but the market share percentages against their competition and against the entire market as a whole.  As an example, a Chevrolet dealership in the Denver market over the past two years has a market share retention percentage of 82.63%.  This Market Share Retention number is the difference between the average of their best (market share percentage) and the average of their worst (market share percentage) months.  Various factors have to be considered when looking at this number, but in this case, their 82.63% is an excellent indication of a very well run dealership that makes very good marketing and training decisions.

82.63% is a very high Market Share Retention number.  98% of the time it indicates the following:

• The dealership has very good staffing retention
• The dealership has a consistent marketing strategy that does not include sales ‘events’ that bring in outside staffing
• They do not ‘cannibalize’ their market.

Just as a high Market Share Retention number (anything over 60%) indicates the positive attributes mentioned above, a low number (55% or under) indicates the opposite, with some exceptions.

There is also a Chrysler Dodge Jeep dealership in the Denver Market who has a Market Share Retention percentage over the past 2 years of 35.89%.  Upon closer examination of their month to month numbers, something else is revealed.  They have shown a very large increase in market share over the past 16 or 17 months.  Once we remove those first 7 or 8 months from the equation, they show a 60.15% Market Share Retention which is far better than their overall 2 year retention number of 35.89%.   What happened?  The dealership made some changes as to the way they approach the market about 18 months ago.  The results have been excellent.  They stopped doing ‘staffed’ sales events and concentrated on efficient marketing methods that could be done consistently.

Research in other markets (Charlotte, Los Angeles, Dallas, Atlanta, anywhere the data is available) have revealed similar indications of how a dealership operates and how that effects their Market Share Retention.  In short, you can tell a lot about how a dealership operates by looking at their Market Share Retention numbers.

For more information on this subject, feel free to contact me.