We all know that technology – especially the technology powering personal technology and devices – seems to be moving forward at lightning speed. Is it any surprise that a recent survey for Roadster has revealed that a third of consumers would buy a vehicle from a mobile device?
The study also revealed that men (41%) were more likely to buy a vehicle through their mobile device than women (21%), and consumers with annual household incomes higher than $150,000 were also more comfortable with purchasing a vehicle through their mobile device.
While the study did reveal that a percentage of consumers would be willing to purchase a vehicle in this manner, 86% would still choose to test drive the vehicle before the purchase.
If the idea of consumers buying automobiles through a mobile phone is frightening, the last thing you should do as an independent dealer is to bury your collective heads in the sand, or take the position that such trends are temporary gimmicks. As more and more consumers become comfortable with managing their lives through mobile devices, there’s no reason to believe that a future survey would show a reversal of this trend.
Your independent dealership has no real choice except to adapt to this brave new world, but new technologies and changing consumer preferences won’t save your business if you choose to leave the culture of your dealership lagging behind. Before you focus on the mobile device and the systems that power it, focus on the human being holding that device in their hands – have you done everything you can do to win them over, and to earn their trust?
Does your dealership require a fundamental shift in its culture, before you begin to differentiate yourself online? At QCEP Consulting, our proven formulas and programs can ensure that your dealership is on solid footing, before you take that next big technological step forward.
How empathetic and caring are your employees?
Driving Sales recently reported on a great human interest story out of the United Kingdom. Dang Vuong, a car salesman at a BMW dealership, accidentally received a phone call from an elderly woman who injured herself in a fall and thought she was calling her daughter.
Instead of simply stating, “wrong number” and hanging up, Vuong raced to the woman’s home to help, and he assisted her until a member of her family arrived.
“I felt like I had to go and help because I couldn’t live with myself if something happened to her and I didn’t even try,” Vuong explained. “If it were my grandparent, how would I feel if she was left alone?”
“If it were my grandparent, how would I feel if she was left alone?” Although your employees, especially your sales team, probably don’t have the opportunity to physically assist elderly members of the community injured in falls, chances are elderly members of the community visit your dealership to purchase vehicles.
Your employees have ample opportunities to empathize with your customers in the same way that Vuong empathized with the woman on the phone, to think of them as someone’s beloved parents, grandparents or aunt and uncle and to treat them with the upmost honesty, respect, patience and understanding.
Not only is it the right thing to do, but treating all of your customers with honesty and respect will help sustain your independent dealership for the long term. Your customers now have many options to purchase and service their vehicles, and they’ll only return to your dealership if they feel as though they can trust you as an organization.
“They are so grateful of my actions,” Vuong said of the family. “I didn’t think anything of it as I would hope any other human being would have done the exact same thing.”
At QCEP, we believe Human Capital refers to hiring of the right talent and putting them in the right positions. Over 60% of human capital is being used inefficiently and this is due in a large part to lack of organizational leadership. How would it change your bottom line to improve your human capital? What would your organization look like if you had the right talent in the right positions? How would things look differently if you were able to truly capitalize on the skill sets of the people in your organization?
In relationship building we say, “Spend more time with the people you want in your circle of influence. Spend less time with those you don’t.” It simply makes sense that you would invest more time and energy into the most valuable relationships, but when it comes to the workplace, we instead see managers investing time and energy into putting out fires and using their resources on those employees who are problematic.
Doesn’t this seem upside down? The more time a manager spends with an employee, the more they learn about the talents and skills that employee has. From there, they are better able to capitalize on those skills. This creates a win-win situation because the employee feels valuable and a part of the bigger picture, which is a huge motivating factor in today’s workforce. This is rewarded to the employer through higher morale and increased productivity.
The more time the manager spends improving, training and investing interest in the employee, the better productivity will be generated by that employee. This concept is misunderstood and overlooked by most businesses, but it is even harder to grasp by those in the automotive industry due to the high level of turnover. But what if turnover was reduced by implementing more of these concepts?
Crisis management is not leadership. Investing in existing employees means providing the right training, the right motivation, the right engagement. It means managers truly understand the employees and go right to their heart, and in doing this, they no longer have to twist the employee’s arm to get results. Leadership creates a culture that keeps the employees coming back, and having them be more effective and efficient. There is a lot of management’s time spent in this process, but it is a time investment that results in significantly better returns.
If you had a marketing method that returned fifty cents for every dollar that you put into it, would you keep doing it? No! That would be taking a loss. Would you be content with an investment that returns a dollar for every dollar you put in? How long would you play a slot machine that for every dollar you put in, you won a dollar? You could play it for infinity, but you would never get ahead. Sadly, many dealerships are doing this every day. They invest a dollar and get fifty cents to a dollar back. They do this by placing an ad for employment on Craigslist and hiring the first person who walks in with a pulse.
QCEP Consulting uses tools that allow organizations to hire the right people for the right job. This actually lowers payroll and bottom line expenses because it reduces turn over. It reduces endless rotating job postings. It reduces the time and expense of the onboarding process. And, because people who are optimized to do their jobs are doing what they are good at and comfortable in, they stick around. They aren’t facing conflict they can’t handle. They aren’t working in stressful situations that they don’t have the skills to navigate.
In order to create this culture, managers need to get the skills and training they need in order to pass on the skills and training to others. This is where QCEP Consulting comes in. We help you manage human capital for the purpose of improving your bottom line. Ready to talk? Call today.
When the trade-ins aren’t coming in, how do you find profit?
With trade-in inventory dropping 30-40% over the last few years, dealers are finding it difficult to squeeze profit from their preowned centers. In order to be strong, they need to be investing in purchase units at the right price and turn them fast. Lease turn-in’s are expected to be the main stock in the next few years and, as car sharing and low wages are effecting new car sales, more trade-ins are unlikely.
Manufacturers just don’t get it
Today’s consumers will be looking for low cost inventory- that is price points below 20k- and preowned is likely where they will be searching. But, manufacturers don’t seem to be understanding this and are pricing new cars high to cover their costs on adding expensive high tech features to the newest models. They don’t understand their customer base, so they are creating a mismatch in the market between what they are producing and what the consumer is buying. In order to grab market share, you will need a good source of used cars to build your inventory.
Today’s savvy auto consumer
Customers aren’t walking onto lots unaware any more. They want to shop from the comfort of their homes. This means they likely have their eye on a few cars they are interested in and they are educated about pricing. Even previously happy customers will shop online before showing up at a dealership they already know, like and trust.
What does this mean for you? It means two things. First, you need to be showing up in search engines when they are looking, and second, your salespeople need to have the skills to engage these more educated shoppers.
Capturing the Trade-in
When the consumer shows up, they know the value of their trade-in, and if your Sales Manager gives a low ball offer, the customer will walk. Successful dealers know the ACV and appraise the trade-in aggressively to get the customer to turn in the trade- but this should only be done on the cars that will resell. Don’t lock up cash by purchasing trades for the sake of inventory. Buying the wrong inventory will result in frozen capital.
If you understand today’s consumer, you will buy the right car at the right time. This may mean you will buy the trade in a bit higher, but you know it will turn over
QCEP understands the auto industry and we are here to help you find the gaps that are causing loss and provide the skills training needed to maximize profits. If you are needing someone to come beside you to fill those gaps in where you are versus where you want to be, give us a call today.
According to Time Magazine, millennials have now become the largest generation to enter the American workforce. They have created a workplace more diverse than ever before, and these young workers, between the ages of 18-34, are redefining it.
“Millennials will make up 36 percent of the work force by 2014 and 46 percent by 2020—pretty good news for employers to have a generation of workers who are natural web marketers on the way.” Forbes.com
With more than half of millennials reporting that personal development opportunities were their top priority in choosing a career, management would be amiss to continue ‘firefighting’ styles of employee engagement. Gone as well are the days of “hiring anyone off the street”.
Millennials are creating new management engagement
Social media is the priority of this generation. In fact, studies show they place social media and device use freedoms as more important than their salary. They are also more entrepreneurial in nature than most other generations. What does this mean for those who will hire, train and manage them?
Engagement is critical
Think about how social media works and you will better understand this generation. They want to talk about themselves and see what others are doing. They look for social proof in watching what others do. They are breaking through barriers of single mindedness by having access to more and this increased awareness means they connect more to diversity, information and acceptance.
In managing, they need to be engaged. Don’t set them in front of a project and walk away only to return in 8 hours. Engage them with cooperative conversations, regular check-ins of performance, immediate feedback and information about how they can help.
Plan for the future
Planning that includes how the future is being built is currently lacking in today’s management team, but millennials require it. They want to buy into something bigger and they want to know their role in it. They are more transient than ever before, and if you want to keep them around, they need to be involved. They are less interested in rewards than they are in consistent, non-critical feedback and the ability to contribute. Build systems that allow them to be heard, acknowledged and contributors.
Leadership over management
True leaders will be needed to build and maintain their human capital. Hiring the right attitude will preside over special skill sets. Leaders will capitalize on the millennials strengths with technology and leverage that to build business and rapport. And with technology moving so quickly, millennial’s ability to adapt to change and learn can help propel industries into the forward movement if they too can remain flexible and trust.
The target market reflects the work place
As millennials enter the workforce and reshaping it, they are also reshaping the marketplace. They, in essence, become target market experts. They know what they like, so they know how to sell what they like to others like them. This too, can be capitalized on by forward thinking management teams who know how to engage employees.
Are you ready to hire, train and retain today’s workforce? Do you have a strategy to reduce employee turnover and increase engagement? Does your organization truly understand how to manage your largest resource- your human capital? Contact QCEP today to learn more about how to create profitable business through better leveraging of your human capital.
It’s a big election year, which always tends to create some extra stress in the economy, but what are some of the other automotive industry trends we expect to see in 2016? QCEP Consulting, a firm specializing in business consulting for the automotive industry weighs in.
What do you think are some of the automotive industry trends we should be watching for?
I see manufacturers building models that don’t match their target market. They are adding technology and high end automation features, but this costs the consumer who doesn’t want to spend the money. This production, then is creating a mismatch in the marketplace and the consumers are not running to the lots.
Leasing will be become more attractive to push in 2016 and 2017, especially on the luxury brands like Lexus, BMW, and Mercedes. Expect a 20-30% growth in leasing in the next few years.
Additionally, ride sharing options are growing in popularity and Millennials aren’t quick to buy. Consumers today aren’t getting their drivers licenses right away and with car sharing being more affordable than owning a car, these will challenge and change the marketplace.
How do you think the elections will affect the automotive industry?
Election year fears keep people’s wallets close, so I expect to see auto dealers facing some challenges with moving inventory. When dealers hold the correct amount of inventory that is in balance with the demands of the customer, they will see better margins than those who don’t. Retail centers just need to understand that new cars likely won’t sell as quickly as used ones, and they should account for that in their budget planning.
How will it be remedied?
Dealers need to understand that only 20% of their product will be hot in the market and those shopper will pay any price to get them. However, the other 80% will require the dealer and manufacturer to create incentives to encourage sales. Dealers, in order to move inventory may find themselves making little to no profit per unit.
The dealers today need to find ways to create more effective systems. Gone are the days of one profit center making up for another. Each one must be efficient and creating positive cash flow, or they will fail. Retail centers need to be sure they are following the best practices for sales.
What do you consider those best practices to be?
First, the dealer needs to make sure their website is easy to use and has enough information to entice shoppers to come to the dealership. Second, when the consumers do come, they needed to be greeted immediately in a friendly, professional and inviting manner.
Third, the customer needs to be listened to. A knowledgeable sales staff will listen to the customer’s largest pains and know their inventory well enough to match them with the right product for them. Repeat the customer’s needs when showing the vehicle so they know they were heard- this builds rapport.
Anything else automotive retailers should know?
Professionalism is key. From their first impression, whether online or in person, to the signing of the contract and follow up, customers should feel respected and appreciated. Leaving a positive lasting impression will be a key to success.
For more information on automotive industry trends, frozen capital resolution and human capital management, contact QCEP Consulting. Their unique solutions for the automotive industry will correct inefficient processes and improve staff performance to create better profitability.
Even with the 2008 recession behind us, it is still tough for used car dealers to improve their gross margins. With a decreased supply and numerous consumer financing options gnawing at the market, margins have continuously gotten smaller and smaller. Wholesale unit costs are getting increasingly higher, while retail pricing has remained relatively static, thus squeezing margins thin. While manufacturers have increased production, it may take years for the effect to trickle down to independent dealers. So how do you improve gross despite all these challenges?
For those in the know, “Lyft” “Uber” and “Zipcar” are taxi and/or car rental services that have become increasingly popular over the last five years. Essentially tools that make vehicle sharing possible, there’s talk that that these services will shift consumer behavior. Instead of buying cars, consumers may one day favor vehicle sharing.
While this topic is a bit “pie in the sky” as far as QCEP is concerned (predictions are hard, especially about the future), there’s a lot of discussion about car sharing in the media and we wanted to weigh in. Will consumers reject vehicle ownership in favor of car sharing? Keep reading.
The annual NADA Convention kicked off yesterday, gas prices keep plummeting, and apparently we’ve been tricked by trucks with preloaded engine soundtracks. In case you missed it in the automotive world, we rounded the top stories of the week for your reading pleasure.
Frozen capital could be costing your dealership tens of thousands of dollars. While most dealerships have frozen capital, many dealers fail to identify the sources of their frozen capital. Here we have identified the top places where your capital and become frozen and the signs of frozen capital.