Dealer Ops

The View From Your Front Door Looking Out

Business is slow. Yes, I have verified this scientifically, based on the fact that almost every dealer I ask tells me so (especially the new car dealers). OK, so maybe it’s not quite that bad, but it does seem like the general consensus is that business is definitely more difficult these days.

One observation that provides a measure of comfort is that the better operators still manage to survive and thrive, even if the overall market is soft. More than likely, based on the fact that you are taking the time to advance your education by reading publications like this one, chances are you are one of those better operators.

Not only that, but we buy here pay here (BHPH) dealers have another cause for relief, since we have financing options that other dealers do not have. Prime and subprime lenders tightening up? No problem. That leaves more (and often stronger) customers for whom we can provide financing, while our non-BHPH competitors are stuck with their hands tied.

What options do dealers have in attempting to stem the tide against deteriorating sales? One solution would be to BUY your way out of it. There are certainly plenty of TV and radio stations, direct mail companies, third-party Internet lead providers and newspapers who will happily take your money. And in their defense, any or all of those can be effective parts of your overall marketing plan and can help generate an immediate response. But your associated cost per sale and return on investment will likely take a big hit. In other words, you can generate extra sales, but will you generate enough extra net profit for it to be worthwhile?

Another option that is often overlooked is lot merchandising. There is a country song in which the singer states that his favorite view is “from my front porch looking in” on his family. I suggest that we, as dealers, need to inspect our facilities, starting at the front door and working out from there. Actually, don’t neglect the interiors (especially the bathrooms) of your facility either.

Perhaps we get jaded to the importance of merchandising our lots, because we see “Drive-By” listed by our salespeople as the advertising source for every up that they forgot to ask. But the reality is that more potential buyers view our lot displays each week than we could reach from thousands of dollars of TV, radio, and print ads. That is why we spent so much time to find a high-visibility location, right?

So why would we go to the trouble of finding a great location, then just stick up a bunch of antenna flags on some of the vehicles and call it good? And why do we preach to our salespeople the importance of making a good first impression, when the true first impression a customer sees is the condition of our lots, the presentation of our facilities and staff members, and the displays of our vehicles? Here are a few thoughts about lot merchandising.

Activity - Too many times, our dealerships look like they are closed for business. Our goal should be for people to always see activity going on at our lots. Activity breeds excitement, and excitement breeds sales. My grandfather was a master of this principle, as he was constantly having the crew “key up the cars” so they could rearrange the lot. I think this may be an urban legend, but supposedly he even paid a guy to drive in and out of the dealership all day, just so passersby would see activity happening at the dealership.

Attractiveness - Having an attractive lot can really improve the perception your customers have of your dealership. There are several companies out there that provide a ton of products to help dress up the appearance of your facilities and the vehicles. If you would like to e-mail me, I can recommend some of the products that have worked well for us over the years.

Availability - Another consideration in merchandising your lot is to make information available to customers who are visiting your lot when you are closed. One approach is to leave business cards on all the windshields each night. (Don’t forget to remove them the next morning, especially if it rains overnight.) We actually take that a step further by placing a “First Shot” card on each windshield, where customers can leave their contact information and which vehicle they are interested in, and we will call them first thing the next morning to give them “dibs” on that car.

It’s also helpful to have nice window stickers on each vehicle that not only give specifics about the vehicle, but also detail the top 10 reasons to buy from your dealership. Another idea to go along with that is to transmit your own message over a short-range radio frequency. For a fairly small investment, we broadcast a looping 5-minute message that anyone driving our lot can receive by tuning their car radio to AM 1610 to hear the latest specials, the benefits of our company and our website address.

I encourage you to not let the current business climate drag you down. There is still business out there, and by making the necessary adjustments and improvements, you will get your share and then some. Just remember, when you’re making plans for world domination (or at least conquering your market), don’t forget to start at your own front door by looking out at your lot display.

Have a Great Month!

PS. This article should be arriving at about the same time as customers could begin to receive their “stimulus refunds” from the IRS. The current plan at press time is that people set up on direct deposit will get theirs first, starting May 2; then starting May 23, the rest of the eligible folks will start to get theirs staggered until mid-July, based on their Social Security number.

If you haven’t already, you may still have time to jump on this opportunity when customers will have extra money burning holes in their pockets. We all know that tax refund money usually makes February and March one of the year’s peak sales periods, and we are anticipating that this stimulus refund could create, in essence, a second tax season. A caution, as always, is that a big down payment doesn’t turn a bad payer into a good one, but if you can gear your marketing to draw in worthy customers, it would be great if they would use these checks to stimulate our personal economies too! Agreed?

Vol 5, Issue 5

Ryan Linnehan

Ryan Linnehan



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