As margins decline and markets soften, it’s even more crucial to scrutinize dealership operations performance more closely.
An integral component of your analysis is to examine outdated behaviors and processes that impede performance…and replace them with an updated, holistic approach to “digital” operations.
Fact #1: Consumers loathe car dealers.
Fact #2: The predator/prey mentality is still alive and well.
Fact #3: Until dealers reconcile Fact #1 and Fact #2, consumers will continue to disengage.
The pressures today on the dealership model today are abundant. Retailers must evolve and adapt to changing consumer expectations.
Transforming your store(s) into a hybrid of the e-commerce model is challenging. It’s one thing to know that changes need to happen but quite another to know which to tackle first.
8 Digital Dealership Operations Focus Areas for Better Performance
Spotlight these areas in your operations and you’ll be much better positioned for success.
1. Lead handling process
I bet you get calls daily from vendors who say they can get you more leads. Am I right?
Everyone wants more leads but for dealers whose lead processes are unsatisfactory and/or underperforming, that’s adding way too much fuel to an already 5-alarm fire.
FACT: It doesn’t matter whether you’ve got 100, 1,000 or 10,000 leads when you’re not effective at converting them.
Poor lead process = poor closing ratios = poor performance
Answer these 5 lead process questions to answer before you spend another dime on lead generation:
- Where do my ideal leads come from?
- Which lead generation strategies and tactics get the highest ROI (Return on Investment)?
- Who fields the lead first?
- Are my lead responders doing it right?
- What tools do I use to measure my managers’ effectiveness at optimizing the lead process?
2. Pay plans
Changes are happening in dealership sales operations. One price is gaining steam and many dealers are paying Mini’s to their commissioned salespeople.
Pay plans should be examined so that they closely align with digital operations and sales profit goals.
Salesperson compensation has declined in recent years and many salespeople prefer time off to the higher pay that comes with long hours. Dealers must recognize this trend and adjust accordingly.
What are you doing to improve your salespeople’s pay plans so that they align better with what motivates them?
3. Digital reputation
Are you listening?
What are your customers telling others about you?
When 94% of people are influenced by online reviews, an audit of your current practices to capture and manage those reviews is in order.
4. Customer experience
Regarding Facts #1, #2 and #3 above, there should be close attention on rectifying consumer trust in dealers.
I’ve managed dealerships most of my life and I know (like you do) that there are a lot of happy customers out there driving the cars you sold them. But the stereotype still exists.
The first thing is to acknowledge that outdated behaviors within your store may be still happening. Put processes in place to change those behaviors, including measurable customer experience metrics and incentive programs to transform outdated behaviors into more customer-centric interactions.
5. Financial reporting and analysis
One of the most common concerns I hear dealers express is their uneasiness around financial investments in digital dealership operations. They aren’t sure what’s working – not sure what they should be spending on or what they should refrain from spending on. There’s a lack of solid advice from the factory. Vendors will tell you a million stories.
The answer to all of this is establishing ROI (Return on Investment) through specifically-designed financial reporting and analysis.
You can’t manage what you don’t measure.
New metrics and KPI’s (Key Performance Indicators), especially on digital marketing, must be tracked, measured and analyzed consistently to determine viability.
Building on tracking results through financial reporting and analysis, the next step is forecasting how your digital dealership operations strategies will perform.
It’s amazing the insights you’ll obtain through forecasting and you’ll find that operational decisions will be better informed.
- Begin by comparing current month’s sales with last year’s sales.
- Then, forecast what you plan on doing next month.
- After the month is over, compare your forecast with your actual numbers.
As time goes on, you’ll get better at forecasting, add more components to track and forecast, and begin looking at each quarter throughout the year.
7. Social Selling
Social Selling is the act of leveraging social networks to build relationships, generate leads and form referral partnerships. 79% of salespeople who use social media as a selling tool outperform those who don’t.
Most dealers have one or more salespeople who are social media savvy. Rather than discount their efforts, it’s valuable to digital dealership operations to include these employees’ contributions and offer solutions to leverage their talent.
8. Internal communication processes
The art of communication is the language of leadership.
Customers are hyper-connected and your internal operations should be too. Leverage technology to improve internal communications but don’t introduce tools without a process in place.
If you find yourself having more questions than answers when it comes to managing digital operations, reach out to me. I’ve helped dealers just like you to improve performance and increase profits. Click >>>here<<< and I’ll get back to you within 24 hours.