As sales slow down and profit margins compress, Mark Vickery of VinSolutions has three suggestions for dealerships to remain successful.
They say all good things must come to an end. With the new vehicle SAAR checking in around 17.2 million units at present, 2017 will likely be the end of seven straight years of sales gains.
While that figure still represents a very healthy environment, the industry needs to adjust as it enters a cyclical decline. Sales are slowing down and profit margins have already begun to shrink.
Mark Vickery, senior director of Performance Management at VinSolutions, also reminds dealers that this is happening at a time when customer expectations have grown. He cites that 60% of customers expect more from dealerships now than they did a year ago.
Together, these changes are capable of taking stress and pressure on your store to the next level. However, Vickery reminds dealers that being proactive now will pay dividends later.
In a recent article for WardsAuto, Vickery provided three tips that he calls his formula for dealership success despite slowing sales, shrinking margins and growing customer expectations.
Track the Right Metrics
Vickery believes these five metrics matter the most when it comes to evaluating your sales team's success:
- Contact ratio
- Internet lead response time
- Appointments confirmed by a manager
- Service penetration
- Number of overdue tasks
These metrics let you see which parts of the sales cycle are working for your store, and which need some work. After all, you can't close customers that haven't entered your dealership yet.
As for service penetration, which seems slightly out of place on the list, Vickery reminds dealers that service appointments help drive revenue and loyalty. Keep in mind, a 2016 Cox Automotive study found that customers are 1.5 times more likely to return to a dealership for service if they are introduced to the department at the time of purchase.
Stick to Your CRM and Strive for Improvement
Next, Vickery reminds dealerships of the importance of consistently using your CRM and setting reachable goals that are meaningful.
Your customer-relationship management software is only an effective tool when used regularly. As Vickery puts it, "Show your team that if you work in the CRM, the CRM works for you."
83% of the best dealerships run daily CRM reports according to Vickery. This helps them set and reach meaningful goals, but only when everybody is accurately and consistently entering data into the CRM.
Proactive, Not Reactive
When margins are narrowing and sales are slowing down, it's important that your store is able to adjust accordingly. This is where consistency with your CRM shines once more.
"If you're regularly running reports and measuring results, you should be able to identify inefficiencies and problems early on," Vickery says. These kinds of insights can be a huge advantage in these changing times.
The Bottom Line
Vickery's suggestions can help your dealership remain successful and profitable in the face of slowing sales, rising customer expectations, and narrowing margins. They also highlight the importance of your CRM.
If your store is looking to convert more subprime leads, then you'll want to know about Auto Credit Express and our LotPro software. LotPro's CRM is easy to use and will help you close subprime sales faster and with improved profitability.
LotPro is a profit-making machine and the most effective special finance tool around. Get in touch with our team to learn more about it and our other industry-leading products and services.
Give us a call at 888-535-2277 or fill out our contact form online to see how we can help your store.