If this is how you operate, you probably shouldn’t be in business…or soon won’t be

If the market goes south in your area (or in general) and it falls 35% to 40% over the next five months, are you going to fire your GM or GSM if you sell 20% to 25% fewer cars during those months? – If you think you are going to hold the GM or GSM responsible for lower numbers even though your dealership actually had a lower reduction of sales than the local market, YOU SHOULDN’T BE RUNNING A BUSINESS!  You don’t have control of the volume of business that is going to be done in your market regardless of what Event Sales people tell you, you’re simply robbing yourself of business in the coming months.

Concentrate and act on what you can control, not what you can’t.  Learn the difference between the two.  Keep tabs on the local market number, not just your brand.  How many cars are being sold TOTAL in your area?  That’s not something that you can control unless you over-incentivize customers by giving cars away – literally!  And, if you think you can keep numbers up in a drastically declining market by over-incentivizing, you will not be in business in a year.  I’ve seen it over and over.  It’s like gravity; it’s the law.

These are the Things you CAN’T Control:

  1. The number of people who will buy a vehicle in your market area in any given month.  The number of buyers is the number of buyers because 99% of people buy on their own schedule.
  2. When a market ‘tanks’, it is due to many consumer concerns including uncertainty, desire and other economic factors.

These are the things that you MAY be able to Control:

  1. Your staff:  How stable is your team?
  2. Customer Satisfaction:  Do people like doing business enough with you to actually create referrals?
  3. Creating and taking advantage of opportunities:  Do you have some intelligence in your approach to marketing that keeps you in front of people who might actually buy your product? Do you have processes in place to take advantage of those opportunities that your marketing and place in the market create?
  4. Inventory Mix:  Do you have a mix of used car inventory that attracts a decent percentage of people looking?

I write this because I have seen some pretty ridiculous firing decisions made during down market times.  I know of a GM that was on the spot until he brought his numbers up.  What the owner failed to realize what that he brought those numbers up during a market downturn. He shouldn’t have just kept the GM on, he should have given him a medal!


About dealerite/in association with AP Level 4

National affiliations of professionals who are engaged in changing the culture of the automobile retail business. Associated with AP Level 4 and Edifice Group. These companies are bringing sustainable marketing which has proven quantifiable improvements in a dealer's market share performance
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