LAS VEGAS – A good thing about today’s economic downturn affecting auto dealers is that “it makes you focus on everything,” says Mark Mishler, CEO of Resource Automotive, a firm that provides financing, consulting and training services to dealerships.
Dealers facing tough times should leverage all aspects of their operations – from customer retention to every revenue opportunity – so they can “live for a better day,” says Mishler, who also is president of The Warranty Group Inc., Resource’s parent company.
In good times, some dealers might overlook certain operational deficiencies, he tells the F&I Management and Technology Conference here.
For instance, if a store shows parts-department profit losses, the dealer might wave that off on the premise that the dealership was making money elsewhere, Mishler says. “Now you’ve got to look at everything.”
That includes selling more extended-warranty contracts to car buyers. “If you are not getting 35% penetration on extended warranties, you need to find out why,” he says.
“Everyone knows what an extended warranty is; what’s important is for people to understand the benefits,” he says. “If people are keeping their cars longer and requiring more maintenance, it’s our duty to make sure they are in safe cars.”
Mishler recommends finding success through emulation of best practices, especially if the dealer down the street is doing a better job.
“Dealers should ask themselves, ‘Am I giving customers the best service, the best products, the best of everything?’” he says. “Giving the best enhances franchise value.”
Focus on self-discovery, Mishler says. “Find out what you are doing right, but also find out what you are doing wrong. This usually requires bringing in an outside expert.”
He says training exposes strengths and weaknesses; regulatory compliance programs bring back customers and consequently “pay off in spades;” and properly constructed compensation plans help meet the goals of the dealership.
Only the strong will survive to get through what Mishler calls, “the toughest times most of us have ever seen.”
Other survival recommendations include:
- Reexamine basic value propositions.
- Assess business strategies.
- Review return on investment with business partners.
- Open up new lines of communication, digitally and otherwise, with clients, staff and customers.
- Identify next generation of leaders in the dealership.
- Assess and build upon brand differentiators and strengths.
- Critique your own performance.
