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When North American dealers hear about Absolute Results’ work with thousands of dealers in Europe, I’m often asked questions about the differences in the EU automotive market, especially as they regard EVs.
We’ve all heard the advice once given to a young Wayne Gretzky by his father: “Skate to where the puck is going, not where it has been.”
In my 27 years in automotive, I have always been impressed with future-focused, innovative dealers who adopt a similar approach to running their businesses. Dealers like these continuously look beyond the success of today, preparing for future market shifts and changing consumer behavior.
In Jeff’s January article for Automotive News Canada, he outlines three factors that will not only remain constant for the foreseeable future, but that will become even more important as prices go up, inventory shortages cease, and competition in the automotive industry gets tougher. Regardless of the kind of vehicle—ICE, HEV, PHEV, or BEV—these three constants will endure.
Over the last several articles, we’ve discussed the current and impending disruptions to the retail auto industry. We’ve speculated on the exciting potential of a soon-to-come golden age of auto sales fuelled by pent-up demand, cash-flush consumers, exciting new product, political agendas, and social pressure. We’ve concluded that the brands and retailers able to keep more of their customers over the next two-to-three ownership cycles will win this decade of change.
For most dealers, the last six weeks of each calendar year are all about reviewing financial statements and setting forecasts and budgets for the new year. Every line item in the current budget is carefully evaluated based on dollars spent, replacement cost, and ROI. Sales targets are negotiated with the distributor or OEM. Contracts with suppliers are reviewed before they are renewed, and dealership pay plans are often adjusted based on the potential of the next year’s sales performance and profit.
If the pandemic has taught us one thing, it’s to be very careful making predictions!
Yet as leaders, we must “look ahead” of our people to help them prepare for the future. We earn the authority to lead and fortify that leadership first with our vision, our ability to “see ahead” and “think ahead” of our people, and second with our courage, our willingness to take educated risks and shift our organization in a new direction.
This month, I’d like to use an age-old selling principle to develop a back-to-basics approach to delivering a high-value Customer Experience to the customer of today and tomorrow.
Did 2020 mark the beginning of a decade of disruption for the retail auto industry?
Last year, the global pandemic began with waves of dealership lockdowns and factory shutdowns, disrupting virtually every aspect of automotive retail.
A recent study of over 30,000 retail transactions at several hundred Canadian dealerships confirms the existence of this opportunity gap. On average, 49 per cent of a dealer’s entire portfolio consists of these service-only customers (who previously purchased from a competitor). Yet the conversion rate of these service customers is so low that in any given month they represent less than eight per cent of a dealer’s total sales volume.
