Are You Preparing For A Weaker Market?

Many people in the auto industry have been talking about evidence of a softening market. Lately, I have seen fear in the eyes of several salespeople, managers, and dealers. Good times and overabundance tends to spoil all of us and leads us to bad habits and a reduced sense of urgency that kills our business when things get tougher. What are you doing at your dealership right now to cushion for an economic downturn?

The time to prepare for bad times is not when they hit, but well in advance. Being proactive in your approach and planning of your dealerships process, marketing, training, follow-up, networking, basic sales skills and sense of urgency will make all the difference in whether you experience a downturn at all and how much it affects you.

If you wait until slower times arrive to increase your dealership’s sense of urgency and improve the daily work habits, you will induce a panic in your dealership that will create an inability of your employees to be productive or even think about anything but short-term survival. The panic mode is cancerous and spreads uncontrollably. The mind set and daily actions of your employees are many times more important than if there are good or bad economics.

There are people who became rich in the depression. Those who prospered when others failed looked at things totally different than others. To survive and thrive in lean times, you must take a contrarian approach to things. You must be different that your competitors and take the risks others won’t be willing to take. Will you bite the bullet and maintain expenditures on long term, intangible items that are easy to get rid of? Will you train, market, and advertise when others have quit?

In the last several years, auto dealers have experienced record numbers of people walking into showrooms ready, willing, and able to take a vehicle home. Because of this, have we forgotten the basic skills of follow-up and all the other things any salesperson should do to build their own successful business within a business? It will become essential that dealerships who want to prosper must once again work on defining their SDP – Specific Defining Proposition (what should make a customer choose you vs. all the competition). If you can’t drive home your message in a clear, concise and powerful way to customers, you will face price competition even more then usual.

Recently, I had the pleasure to visit with a dealer who was attending one of my workshops with his sales and management staff and he outlined his plan for his dealership and their approaches for all phases of his business both now and in the future. Immediately, that dealer helped strengthen my belief that with the right plan, execution, and attitude, any dealer can insulate their business from most all economic adversity.

The dealer made the statement that, “economic downturn was not in anybody’s vocabulary at his dealership.” I believe that any dealers or managers, who allow the excuse of a slower economy to creep into their vocabulary even just once, will give their employees the excuse many will look for to under-produce or fail.

In a recent sales meeting, a salesperson commented that he thought sales was largely luck. Luck of the right or wrong economy, dealership, customers, etc. Everyone in life will experience moments of truth that based upon your reaction to those moments, will either cause you to build toward success or lean toward failure. As all of us experience those, though, and in trying moments, you must ask yourself if you are willing to be like that salesperson. Will you choose to lose?

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Comment by Mark Tewart on September 11, 2013 at 12:06pm: Thanks for the comments Lisa. I certainly hope dealers are reading this, lol

Comment by Lisa Bundy on September 11, 2013 at 10:41am: Jim, Mark and Kevin.....glad to see we all agree on being prepared. I used the same philosophy in both the dealership and the finance company. Sales people and collectors are no different. I actually hired people based on their attitude instead of only their skills. I could train skills but not attitude. However, too many dealers and finance companies undervalue "pumping up the staff". You see this in sports teams, where they have a "rah, rah" session just before the game. After reviewing the plan (yes, have a plan) for the day and being knowledgeable about the product, pump up the staff......the whole staff (title clerk, receptionist, finance, etc). Remember success is not an individual event, it is a team effort.

By the way, do you think dealers are reading any of this or it's just us trainers?

Comment by Mark Tewart on September 11, 2013 at 10:26am: Thanks Gerry! You are so right. It's what we do and think now that will sow the seeds for the future both good and bad. The auto industry goes up and down but if you have the right behaviors now you can certainly take advantage of lesser times by being positioned properly. Once again, this article was actually written before the Great Recession when things were rocking. Things have been awfully good for a while now and I hope people are building their business muscles to prepare against any upcoming trauma.

Comment by Gerry Fraenkel on September 11, 2013 at 7:33am: Your are spot on. We've just had our best month ever and you can see salespeople getting complacent. We all know that in market downturns the strong increase market share. Just as dealerships must have a strong value proposition, salespeople need to have their unique selling proposition and continue to honor the process. In doing so, referrals will be generated and that should be the basis of new business.

Comment by Mark Tewart on September 10, 2013 at 8:20pm: Jim, I could not agree more. Your comments are spot on.

Comment by Jim Boldebook on September 10, 2013 at 6:38pm: Good article. I know things have been on fire the last few months and good most of this year, but I don't think we are out of the weeds yet. 'real income' for most folks is down 3-5% and even though inflation is low, general costs of living, in particular food/fuel are up. We are enjoying a period of a lot of 'gotta buys' in the marketplace, especially fueled by a renewal of some low lease rates. many of these buyers are unburdened by negative equity because they haven't bought new car is 6-7 years. I'm in the mindset of the dealer who doesn't allow 'negative thinking' at the dealership, however, I'm also a strong proponent of using good times to fortify the foundation, weed out the chaff, tighten expenses, train train train and don't take any deal for granted. Don't pay attention to benchmarks or averages.... constantly work to excel/exceed and beat your own numbers with a keen focus on profitability. Pay down debt. liquidity is king.

Comment by Mark Tewart on September 10, 2013 at 6:27pm: Thanks Kevin and so true. I must admit that this article was written before the Great Recession. I ran this post again just as a wake up. We are in a really good car selling environment right now and it's easy to lose the fundamentals.

Comment by Kevin F. Cunningam on September 10, 2013 at 6:12pm: Regardless of an impending economic downturn, it is vital business owners and leaders maintain the mindset and status of a disciplined operation.