When something could be better, it is mediocre. Mediocrity is sneaky. If mediocrity creeps in around you, your staff, or your business processes, it will be plain to see in 2023.
The past 18 months in the automobile business have made many complacent. External conditions including pent up demand and an incredibly restricted supply have allowed any dealerships still standing to yield well above-average profits. Car dealers and their employees have made money fast these last 18 months, maybe faster than ever. The strong wind at our backs is shifting though. Can you feel that slight headwind? Believe me, it will grow in strength over time.
Record profits are history. The days of 6% plus net profit to sales are over. Look at your financial statements in 2019 and ask your employees to look at their W-2’s from 2019. That's your reality check.
Are you ready to fight mediocrity? The first step is finding weak spots. Professionally mystery shop your dealership. Thoroughly reevaluate the customer experience both in sales and service. Investigate online, over the phone and in person. Ask your mystery shop agency to “play hard to get” and see what the results are. How is the follow up?
Paying an agency to identify mediocrity won’t be enough. I challenge you to personally get involved. Walk your lot and really take a close look, especially at your inventory. Look with fresh eyes, see what your new and used vehicles look like to customers: up close, inside and out. Do the same on your virtual car lot, otherwise known as your website. Are the images enticing and clearly branded? Are offers motivating? Is the information clear and easy to read? Schedule a service appointment on your website from different devices and see what the experience is like from a customer’s point of view.
Profits may have come easy for the last 18 months, but not for long. What happens over the next few quarters will separate the exceptional from the merely lucky. Those who want to survive and thrive will have to purge mediocrity. Mediocrity is to be feared…
