Changing the Narrative to Sustainable Profit
Sustainable profit - Profit which everyone benefits from, growth driven by things you become.
Unsustainable profit - Where one group benefits at the expense of another, growth driven by things you do.
I can vividly remember discussing a car deal with a sales manager and him telling me, “Get all the profit you can, it’s not like they are going to be back to buy another one.” To me, coming from a Ford store in Michigan where most buyers were A-plan and exceptional customer experience is what made loyal customers, this statement hit hard, I could not believe my ears. Years later, after starting my own agency, I considered also starting Unsustainable Business Models Anonymous, I jest. You see, it is not the business model, because no dealership sets out to provide a poor experience for their customers, they just do not have a plan in place not to.
The biggest difference in sustainable and unsustainable profit is how we get there. Sustainable profit is growth driven by what we become; unsustainable profit is driven by things we do. One key factor is the view of profit and loss. A sustainable view begins with an action that takes care of everyone from within and grows by influencing others to join. Unsustainable profit represents a pessimistic and single-minded view of life, where the primary goal is survival. Objectification places people in an out-group vs in-group dynamic, where competition exists, hence scarcity. Sustainable businesses have a solid foundation to prove it, they invest in assets that work for them in present and future conditions, allowing them to achieve new objectives.
Today’s customers are looking for more than just a functional vehicle. Vehicles and the ownership experience must satisfy other critical needs as well; both physical and emotional. From the moment a customer enters your dealership, you have an opportunity to make an investment in their lives and in return get more than just profit. Sustainable profit is more than just numbers on a sheet. Sustainability is being honest and open with your customers so they can see you as human beings, not just as participants in a transaction. As such, sustainable profit is best realized in the long term by building trust and relationships along the entire lifecycle of a customer. This process begins at that first meeting when that customer enters your dealership and continues until long after the sale.
So, where do you start to build a model of sustainable profit? Where can dealerships make investments everyone, including customers, can benefit from? Where results are realized in both the short term and long term.
On the sales side, leading with pricing based sale or themed sale is an example of something you do vs something you become. These types of events, while profitable, when not conducted properly are band-aid solutions. For sales, focusing on finding ways to serve your customers in a way which positively impacts their lives, an example, working with a diverse credit group. Investing time and effort in customers with less than perfect credit will grow loyal relationships. You would be amazed at how deeply reliable transportation can impact a person’s life.
Benefits of working with a diverse credit group include deepened relationships with your customers, wider market reach, and increased customer satisfaction as reach to meet customer needs.
This is an opportunity to increase your sales and serve a greater customer base.
An even greater opportunity lies in Fixed Ops, sorry Sales I still love you! If you want to focus on the long-term sales, Service Advisors are the individuals with the most customer contact, largest impact on CSI, greatest opportunity for gross, and a major factor in whether a customer will return to make a vehicle purchase. Service Advisors are the first, and sometimes only, dealership’s representatives customers have contact with during their time at your location. They are the first impression of a dealership and can create trust through information gathering and interactions that lead to a successful purchase, or distrust that leads to an unsatisfied customer.
We have all heard the adage, "Sell the sizzle, not the sausage." I am here to tell you that in most dealerships we have drifted from that process. Customers want value and they want options, so we must pay attention to both needs while interacting with our service customers.
What is a stellar Service Advisor without a solid Technician? Wait, those are in ridiculously high demand you say? Ahhh, yes, so you have an opportunity for an advantage if you are bold. This is going to come down to pay, culture, and resources, not necessarily in that order. When you find a technician with experience, strong training and customer service skills, honesty, and a love for what they do - you have a unicorn. These unicorn technicians are those that go beyond the call of duty, they can be a rock for a team. Not only do they keep your core services running, but a great one is also a living, breathing documentation library on your systems - documenting loose ends and potential pit falls.
Find the best techs, unicorns if you can, and do what you can to get and keep them - you will never regret this move.
In short, growth driven by serving customers, rather than the customer as your competition. Bring your customers along on your journey, help them grow with you.
Aja Goldey is the Director of Marketing and Partner Success at Dealer Apps. Combining her love for the car business, a passion for marketing, and over 20 years of experience in retail automotive, Aja has earned a reputation of success by helping dealerships build solid marketing foundations.
Aja develops marketing strategies and creative solutions with customized service offerings to achieve customer loyalty.View full profile