Remaining profitable in today's auto retail environement

Linking Ideas with Results

There are no shortage of ideas on how to remain profitable in today's transparent, margin-compressed consumer-driven marketplace.

  • New Vehicle pricing strategies
  • Ecommerce and digital best practices
  • New technologies for just about everything
  • Equity mining resurgence
  • Lean thinking, process and practices
  • New staffing and scheduling models

All you have to do is attend a 20-group meeting, go to NADA or Digital Dealer or do a little research and you can come up with a lot more great ideas.  I read recently "There are no knew ideas - there are those who have ideas and those who execute on the ideas."  The executers win every time.

Closing the Gap between Knowing and Doing

In their book The 4 Disciplines of Execution, Chris McChesney and Sean Covey break it down to these:

  1. Focusing on the Wildly Important
  2. Acting on Lead Measures
  3. Keeping a Compelling Scorecard
  4. Creating a Cadence of Accountability

Sounds simple, easier said then done; or everyone would do it. 

We applied these principles to  executing a brand new ecommerce process after 6 years of record YOY ecommerce sales results. We knew the market was changing and we had to change along with it.  Working with top performing ecommerce sale professionals, managers, field leadership and corporate executives we spent a year applying these principles and were rewarded with two more years of record YOY performance results.

Closing the Gap between Learning and Performance

In their book Know Can Do, Ken Blanchard, Paul J. Meyer and Dick Ruhe reveal why people don't apply what they learn on the job.

  1. Information Overload
  2. Negative Filtering
  3. Lack of Follow-Up

This one requires a little more digging to understand how to apply it but it's even simpler than the 4 Disciplines.  We applied these principles to completely redesign our learning programs and improved retention and productivity by over 20%.  Reducing the time it took to get new employees up to average performance, and increasing the overall production per person per month.

Leading Through Change

Trying to implement a new idea, strategy or process is often a self-defeating prospect for many.  Frequently the more rewarding the idea or the more upside potential, the more risk, even likelihood, there is for an initial backwards slide in performance. In our month-to-month; quarter-to-quarter business it's sometime hard to ride out those performance dips while the change is happening. 

Going from "You can't get MSRP unless you ask for it." Better know by consumers as "hit them high and see what happens" to market-based, limited negotiation, no hassle pricing is a huge culture change for the entire dealership.  If you don't address the people side of this change you can try to apply the 4 Disciplines all you want and you're still going to be fighting an uphill battle.  And PVRs will probably be going down instead of up.

In their book Big Change at Best Buy, Elizabeth Gibson and Andy Billings recount how they helped Best Buy through some radical cultural change using a very simple formula.

  • Head
  • Heart
  • Hands

In their book Change Management: The People Side of Change, Jeffrey Haitt and Timothy Creasy outline the details.

  • Awareness of the need for change
  • Desire to participate and support the change
  • Knowledge on how to change
  • Ability to implement required skills and behaviors
  • Reinforcement to sustain the change

Applying these principles helped us successfully roll out many successful initiatives including new vehicle pricing strategies.

Closing the Gap between Strategy to Operational Execution 

Now I mentioned a few books in this article and there certainly are a lot more on these subjects.  Books also have great ideas.  However there is definitely a gap between reading a book and executing it's concepts to drive improved performance results.  That takes collaboration and brainstorming with associates, managers and business leaders on how to apply those concepts in your business, with your culture and your people.  A lot of people read books, very few execute the concepts to solve a business challenge.

The next time you're coming out of a 20-group meeting or coming from NADA or Digital Dealer and you've got a ideas that you KNOW will pay off big if you execute.  Make a plan for HOW you're going to execute it.

If you'd like, I'll be happy to help with that.  From just a simple conversation to rolling up my sleeves and diving in the deep end with you.