Browsing articles in "Uncategorized"
Oct
17

Does your Dealership Have a Retention Problem?

By Mike Gorun  //  Uncategorized  //  No Comments

The automotive industry, in general, has an employee retention problem. A BIG one. And especially big in dealership’s sales departments. Sure, there are exceptions. However, NADA reports that sales turnover in dealerships averages 70 percent. That’s a lot! 

 

I’m sure that dealerships would rather not have this issue — so why is it happening? Well, an article  I recently read in Forbes shines a really interesting light on this. 

 

The irony of this article is that it is giving advice to job seekers, not employers. It provides advice about hiring behaviors to beware of when interviewing for positions. As I read this piece, it struck me how familiar some of these behaviors are when it comes to how dealerships hire.  

 

In my many years in the automotive industry, it has not been uncommon for dealerships to be in a perpetual hiring mode. People leave and the dealership needs new people on staff to cover the floor and assist customers. Nobody wants to lose a sale because a customer gets irritated by having to wait due to lack of assistance. So, what does the dealership do? They hire anybody that walks in the door. Don’t get me wrong, many dealerships require drug testing, etc., for potential hires. But should the biggest concern when hiring be availability, rather than the quality of the potential new hire and how well they might fit into the dealership’s culture? Shouldn’t it be important to establish if the person is motivated, ready to learn and willing to work as a team player to create a positive customer experience? If not, your dealership is probably setting itself up for failure.  

 

The automotive industry is a demanding one. Hours are long, financial stability can be stressful (especially for commissioned salespeople) and management can change quickly, adding a new element of inconsistency to processes and expectations.  

 

These working conditions are never really explained to a prospect. Most conversations revolve around earning potential, and a lot of managers only care whether a potential salesperson is aggressive and ambitious… and, most importantly, available… as in; “Can you start tomorrow?”  

 

In essence; continuing to hire warm bodies to cover the showroom, rather than truly identifying people who will fit in and stay awhile, can be a catalyst for employee defection in sales that continues to occur to this day.  

 

It doesn’t matter how many interviews you put an applicant through if managers are only concerned with ambition and availability. Because, in the long run, that applicant probably isn’t going to stick around.  

 

Take the time to truly screen applicants and stop simply hiring warm bodies. My guess is that you will start seeing less turnover.

Oct
10

Dealership Staff Stressed Out? Try Storytelling Your Way To Increased Productivity

By Mike Gorun  //  Uncategorized  //  No Comments

Let’s face it. The car business can be brutal. Many in auto retail find themselves working long hours, under stressful conditions, with hardly any free time to see their families or enjoy other activities. 

 

In our industry, many managers are under a lot of stress. The stress of production can wear a person out– whether that’s sales goals to be met, or service revenue targets. As a result, tempers flare and leadership skills sometimes sway away from being nurturing to being annoyed and short-tempered, which affects everyone on the team.  

 

If this is the case in your dealership stop and think for a minute. Running any business with an iron fist where managers lack any flexibility and are overly demanding about meeting goals, can in fact be less productive. It can make it even HARDER to reach those goals.  

 

An excellent article in The Harvard Business Review tells the story of the importance of connecting your employees with their work. It discusses an alternate way to lead, which not only makes the business more productive, but also creates a better company culture which then results in happier customers. What is it? 

 

Storytelling.  

 

I know, it perhaps sounds a little out there if this is not a term you’re familiar with. But stay with me here for a couple of minutes and all will be revealed! 

 

So, how do you use storytelling as a manager? The article gives the example of a restaurant employee who was mentally checked out. Rather than doing his job, he was sneaking peeks at his phone and when things were busy, was failing to make the effort needed to quickly keep tables clean for customers. The supervisor noticed this and approached the employee. Rather than discipline him or rebuke him, she told him a story of how she watched a mother leave her 2-year old at a table while ordering food. The table had not yet been cleaned and the 2-year old proceeded to take her hand, wipe it across the dirty table and then licked the crumbs and catsup off. The employee immediately understood how his failure to keep up with cleaning the tables had affected the customers on a personal level and immediately proceeded to perform his job better.  

 

Why does this type of management work better? Because, rather than simply telling an employee that they are not doing their job, the manager was able to make an emotional connection that was real to the employee and could easily be understood. It personalized the importance of the task. By making that personal connection, it turned a mundane task into a meaningful one. And that made the employee more productive.  

 

This type of leadership and management style may sound arduous and time-consuming but, in fact, it’s not. According to the article, most storytelling is brief. It involves using concrete examples that reframe a moment by personifying human consequences. 

 

By emotionally connecting your employees to their work, they become more productive, both personally and as a team member. This makes your entire organization run more efficiently, makes your goals easier to achieve, creates a culture of hospitality and lays the foundation for a better customer experience.  

 

The next time you feel the need to discipline an employee who is slacking, consider telling them a story that makes the task meaningful. 

 

A couple minutes of thoughtful interaction can change their behavior for good – not just the one time. In the end, that’s what truly matters and what turns managers into leaders. 

Sep
29

Customer Acquisition Can Be More Effective When You Spend $0

By Mike Gorun  //  Uncategorized  //  No Comments

Customer retention is typically much less expensive than customer acquisition. However, with the advent of the internet, consumers are changing. 

 

Now, I’m not saying that your dealership should ditch retention and loyalty strategies – not by a longshot. You need both retention and acquisition to grow. But what if I told you there is a customer acquisition strategy that costs ZERO dollars? Interested? I thought so. The answer lies in online reviews.  

 

Online reviews have become a prime source of information for consumers deciding which business to frequent, whether that’s a restaurant, nail salon or car dealer. Consumers trust other consumers – as long as the reviews are genuine and believable. 

 

According to an article on Loyalty360.com, the problem with cultivating online reviews isn’t that consumers aren’t willing to leave them; but that businesses fail to ask. Those consumers that are happy with the business, had a satisfactory experience and plan to continue frequenting that business, just aren’t emotionally compelled on their own to leave a review… but they would if they were asked. In fact, 70% of consumers would leave a review if the business asked them, according to a survey by BrightLocal.com. 

 

If you look at recent trends in the automotive industry, reviews have become more important than ever before – not just on the dealership level but on the salesperson level as well. Cars.com recently announced the launch of integrated salesperson-specific reviews on the dealership’s VDP pages hosted on their site. Consumers are now not only determining WHERE they want to purchase a vehicle but WHO they want to deal with at the dealership. 

 

People want to do business with people they like and trust. If the customer has never been to your dealership, and never done business with you before, all they have to go on is the word-of-mouth by their friends, family and social networks, along with online reviews submitted by other customers.  

 

Why aren’t dealerships asking customers for reviews as part of their sales AND service process? 

 

The hesitation I’ve seen is due to the fact that they don’t want to inadvertently motivate someone who had a poor experience. If your dealership has a customer retention, loyalty and experience plan in place, and strives to provide that excellent service, I promise that the positives will outweigh the negatives by far.  

 

Online reviews can be an excellent way to acquire new customers without expense. You’ve earned it. All you need do is ask. 

Sep
19

PrePaid Maintenance in the Age of Ride-Sharing

By Mike Gorun  //  Uncategorized  //  No Comments

Younger generations prefer fixed monthly costs for expenses that include things such as vehicle maintenance. They can then budget and have less concerns about encountering a repair bill they can’t afford. But how do ride-sharing services fit into the PrePaid Maintenance equation?   

Ride-sharing – even as a secondary source of income – is skyrocketing, with many part-time Uber and Lyft drivers joining the ranks to add a little money to their bottom line. This brings opportunities aplenty to provide a valuable service, while also adding revenue dollars for your dealership.  

There are many standard pitches for PrePaid Maintenance such as fixed ownership costs, security and peace of mind. Well, it might be time to add another question when discussing PrePaid Maintenance with customers in F&I. Try asking:  

“Do you plan to use this vehicle to earn extra money as an Uber or Lyft driver?”  

Ride-share drivers put many more miles on their vehicles than regular drivers. I’ve met several Uber and Lyft drivers in my travels. Some tell me they only do it for extra income, while others do it full-time. Who knows what, if anything, they told the dealership when they purchased the vehicle?  

Either way, for those customers planning to make some income driving, PrePaid Maintenance becomes very appealing. Time off the road means money out of their pocket. So, subsidizing maintenance with their vehicle loan means operating without any worries about an expensive repair bill threatening their livelihoods. 

As PrePaid Maintenance covers just regular maintenance, if your dealership locks the customer into a PPM, you have the first chance to gain additional business that comes with normal wear and tear. This occurs much faster with these Uber and Lyft drivers. New tires, brake pads, etc.; the list goes on. For these drivers, PrePaid Maintenance should be a no-brainer for both the customer and the dealership. The customer doesn’t have time to go shop prices at 10 different competitors; they need to get the vehicle repaired and back on the road so that they can continue making money.  

Ride-sharing is exploding and these drivers must provide their own vehicles. Start including questions in your F&I process to establish if the customer is planning to, or may consider becoming an Uber or Lyft driver in the future. You may see some light bulbs going off and find them more receptive to your PrePaid Maintenance offer.

Sep
12

Shattering Communication Silos Increases Productivity

By Mike Gorun  //  Uncategorized  //  No Comments

In many businesses, it is typically frowned upon when an employee goes over the head of their immediate supervisor, or directly to another department, to get questions answered or problems solved. This easily creates animosity between the employee and their direct supervisor and is frowned upon as it is a failure to follow chain of command. This system of following a hierarchy has been in place for decades… but is there a better way?

Elon Musk says there is.

As recently reported on Inc.com, in an e-mail to his staff, Musk outlined how employees should communicate and why. Feel free to click on the link to read the whole e-mail, but here are the highlights:

  • Using the most common flow of information – through management up the chain and then back down – only serves to enhance the power of the manager, but fails to service the company.
  • Free flow of communication between any employees, without having to go through management or a chain of command, gets problems solved quickly. Musk tells his employees they are free to talk to anyone in the company without thought of any chain of command, or the need for anybody’s permission. “You should consider yourself obligated to do so until the right thing happens,” said Musk.
  • Musk also stated that, “…managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way.”

Musk feels strongly about management impeding communication. In fact, in his employee communication, he stated, “Any manager who allows this to happen, let alone encourages it, will soon find themselves working at another company. No kidding.”

It certainly seems to make sense. The faster problems get solved and/or issues resolved, the more productive a company is.

Many dealerships operate in silos and enforce the whole chain of command-type communication system. A sales manager would probably frown upon a salesperson going directly to the GM for an issue. In many dealership, sales and parts are operated almost as independent businesses (silos) which can cause animosity and friction. For example, perhaps a salesperson encounters a problem with a customer that he or she knows can only be rectified by the GM. They cannot go directly to the GM, but first have to go to the sales manager, who then may need to discuss it with the GSM. And then it may still need to go to the GM, all while the customer is getting increasingly impatient. Or, the used car manager gets frustrated with what he considers excessive recon costs. Typically, these issues are discussed or debated with the GM at manager’s meetings, rather than being addressed immediately.

Perhaps it would help if your dealership took a lesson from Elon Musk regarding employee communication protocols. It certainly sounds like a reasonable solution that could increase productivity by empowering employees to expedite solutions, allowing them to increase their contribution to the dealership.

I’m not saying management is obsolete. Only that managers may want to consider allowing faster communication channels that solve problems. By so doing, employees can do their jobs better, customers should be happier and the result should be improved CSI and profitability.







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