What got you where you are, won't get you where you want to be.
By : Randy Johnson, President at Car People Marketing, Inc.
Okay, if you are confused by the title it’s understandable – but what I am really saying is this. During the downturn in our economy and in the car business...we all had to do some “un-fun” things. We had to tighten up every single part of our business just to survive. We took a hatchet to every expense and we all got a lot more involved and engaged in every department – especially service and parts since selling cars had fizzled down to a drip.
The good news is we all did survive and things are definitely better than they were. And I believe all of us survivors are smarter and healthier because of what happened...even though we didn’t like the taste of the medicine...I believe we needed it. Think about it...today, I bet you are in a much better position to grow your dealership’s profits than you were before the crunch, right?
So – here is my point about the title of this article. You did what you had to do to survive, you cut expenses, you laid people off, you stopped advertising – and it worked...and it was the right thing to do at the time. You had no choice. But now, you have to take a good look at your operation again. Don’t try to run it too lean...lean is good...too lean is...well anorexic and can be harmful and even fatal. Don’t be afraid to loosen up some – hire where you need to hire...don’t go crazy – but really look at your service and parts operation and be objective. Of course you should calculate what an extra service advisor or support person costs, how much they can produce, what effect they will have on customer service and keeping customers happy and coming back – but don’t forget to do the math on what it costs you for them to not be there. You know – how many people are not coming in or not coming back because you are too short staffed – trust me when I tell you - that can be much more expensive than what it would cost to hire the person you should hire. What got you where you are – won’t get you where you want to be.
Same thing is true for your facility and advertising. If you need to buy some equipment – buy it. If you need to paint, or remodel or re-carpet your waiting area – then do it. Just make sure they are good investments. And when it comes to advertising – remember this – your service department is very much like your vehicle sales department. It needs ups just as bad as sales does. For years, the advertising budget has been held down to 2-3% of service gross...and for years, the service department didn’t grow as much as it should. Most of the growth was from cars being sold that entered into the very short circle of life – meaning maybe the car buyers would come in once or twice but then they never came back. Obviously you have to make sure your customer service processes are in place – answering the phone, greeting quickly, fixing the car right the first time, getting rid of your cashier – but you also have to realize that there are a ton of places people can go to get their car serviced and you are just one in the herd. You have to advertise. Bump your budget – get aggressive – set your budget based on what you want not what you already have. Get serious about consistent advertising that builds brand equity and don’t be afraid to get competitive on prices for well-known services. Next time you think you can’t afford to do an oil change for less than $20 – ask yourself this question – how much do I make when they do somewhere else? Step it up a notch – get in the game. Advertise with direct mail. Advertise with email. Make your customers a member of your rewards club. Stay in touch with them each month to let them know you care. And remember – what got you where you are, won’t get you where you want to be. You have to change...again. You did it before – back at the downturn – so do it again. Hey – get in or get out. Take your customers back and keep them in your store for service and they will be 43% more likely to buy their next car at your store – now that folks, is a win-win.
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