Shop Talk: Time for Dealers to Go Postal?

By adding “car guy” type process, many dealerships can be turned toward a massive profit increase very quickly.

Ever since I first got involved with powersports, I have experienced a huge resentment toward anything to do with the auto sales industry. It has evolved almost into a deep hatred where it seems dealers would rather do it wrong than be associated or linked to any practice that looked “car guy.”

Ask yourself this, why are some of the largest auto dealer groups in the country (and smaller ones too), setting their sights on purchasing existing powersport dealerships? I mean, if they’re so successful, why not just buy the land and build a facility and compete with existing dealers? The answer is simple: they see the opportunity to increase profitability by merely making some changes rather than starting from scratch. By adding “car guy” type process, many dealerships can be turned toward a massive profit increase very quickly.

But, do you have to wait to be bought out before your dealership can see maximum profits? No, success leaves clues all around and a process working in one sector of business can always be adapted to succeed in another. 

Adding BDC? While BDC can dramatically increase traffic over time, it’s not an instant success. Copying auto dealers can often lead to the same mistakes. Taking a poor performing salesperson off the floor and tossing them into a phone room as a “last chance,” is not a BDC department. There needs to be a specific and detailed job description with definite objectives to measure. “It’s better than it was,” is not a measure of success.

Sales software. You all know I’m a big fan. If used correctly, 20-30% increases are realistic. Auto dealers have been using this type of software for years. It helps with compliance, gross, unit sales and even F&I success. But it needs full dealership commitment, training and the right team. 

Events. An event is, by definition, a limited time occurrence that brings a lot of people together for a brief period of time. Even in today’s technology-based business arena, the most effective event is driven by an old favorite — mail. The postal service can drop off mail that will fill your showrooms for days. The right mail is the key.

I spoke with Tim Pendergast of Powersport Events about the power of a direct mail event.* “In 10 days or less, you can design the mailer, target your audience and see a month’s worth of traffic in your showroom for five days effort. The difference with events in powersports is that we use the existing sales team to keep costs down without sacrificing results. The difference with us is the mailers will fill the showroom and our guidance will fill the bottom line.” 

Pendergast has done sales for some of the largest dealer groups in the country and is now focusing on powersports.* 

Pendergast shared that having the right team and process are key. This means coming in a day early for a training blitz. Almost 99.9% of dealers aren’t prepared to handle 30-50 people showing up at their doors on a given day or days. They aren’t staffed and can’t multi-task crowd control with salespeople. The event needs a leader; a great event company has a team of two people, experienced in fast paced sales environments and crowd control. They not only make deals for your dealership, but they help your current staff make more deals in a few days than some of them would do in a month.

The most reputable ones work just like your sales staff. They earn based on performance. They negotiate a percentage of the profits generated over the course of the sale. The cost of the mailing is on the dealer and the better companies generally do that close to their cost as the real profits will come from the sale. So, for the price of what the dealer would spend on a mail piece themselves, they would also get a team at no extra charge.

Auto dealers have been doing this for decades because it absolutely works. There’s a great chance none of your competitors have done anything like this, and typically, you would see about 50% of your average month’s business in three to five days.

If you’d like some more details on what to look for in hosting an event, how to judge the company, and any other questions, email me at [email protected]. I can even guide you to one that has already been approved by Harley-Davidson, and we all know what kind of hoop jumping that entails.

The bottom line is that today’s dealers need a good BDC department. Software for sales and F&I are critical, and training is required along with the commitment to succeed. Adding two mail events per year can provide just the jump start needed to accomplish the other two without taking a step backward to bring your store up to date.

* Email me at [email protected] and I’ll send Tim’s top tips for a successful mailer.

John Fuhrman is the Senior Trainer for Performance Road Agency. He has trained over 15,000 sales, F&I and management professionals for retail operations and dealerships across the U.S., but now focuses on dealers in Maine, NH and VT. Performance Road is one of the only agencies with a 100% sales software reimbursement program which can eliminate all CRM, Menu, Desking costs. If you’d like to ask him a question, or discuss your dealership situation, email him at [email protected].

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