It’s a tough market these days. More competition is entering the scene, consumer expectations are shifting, and the sharing economy is encouraging alternatives to car ownership.
Still, 95% of American households own at least one car, and 85% commute to work in one. If your dealership is struggling in this environment, there are three vital questions to ask yourself.
1. Am I Meeting My Customer’s Expectations?
Today’s consumers demand more from the businesses where they choose to spend their money, and this is a question dealers must ask themselves. Netflix enables instant, on-demand entertainment. Amazon offers fast, one-day delivery with tracking straight to your door. Walmart is integrating farm-to-table tracking through QR codes. Everything is faster, more efficient, and transparent from end to end.
If your dealership can’t meet customer’s expectations, you’re not going to earn their business, or their friends’ and families’ business. Your sales process should be designed around ease of doing business and a value-based call to action on why the consumer should do business with you today and for their next automotive need as well. Take a deep look at your sales and service department and really ask yourself if you’re meeting the expectations of today’s market. If not, it’s time to start optimizing processes to get there.
2. How Fast Is My Inventory Turning?
Your profits are directly determined by your units-in-operation (UIO). The more UIO you have (and the more revenue you can pull from it), the more cash flow you’re bringing into your dealership. Of course, unsold inventory sitting on your lot isn’t generating any revenue. It’s only driving your overhead costs up, so this is a question dealers should ask themselves.
You should have data to show how fast you’re turning over inventory. This is a key indicator of how profitable your business is. If you aren’t turning inventory fast enough, it’s time to concentrate on marketing initiatives and sales training that can get things moving.
Your answer may be an improved streamlined reconditioning process that will improve inventory turn. A vehicle priced on the market that is completely reconditioned makes your sales process easier because your sales staff can spend more time explaining the benefits of doing business with your dealership and less time apologizing to your customers about why the vehicle is not quite as nice as represented in your online marketing.
3. Who Is My Competition?
No matter how much your business is growing, you’re never immune to competition. Industry disrupters are flooding into the automotive industry from every angle. Online dealerships like Carvana, ride-sharing services like Uber, and car-sharing services like Zipcar are redefining the way people view personal vehicles.
Taking time to perform market research on the current state of automobiles is a great way to jumpstart your business. Learn how cars are being used, and you can find unique ways to target customers. This is a question dealers can improve business by answering.
Each of these startups is a market disrupter, and integrating their ideas into your business model will keep your dealership running into the 2020s and beyond. You can’t afford to remain idle while your competition gains traction on your customer base.
Contact The ACE Group today to learn how our products and services can give your dealership a competitive edge.