You’re on fire! What do you do? For those of us who grew up as Baby Boomers and Gen X, you were taught in school how to stop, drop and roll. Right? Now, the battle cry is seemingly stand there and wait to see if you get burned. Profits are high enough (again) to allow dealers to freeze, just as we did around 2005-2010 with the impending digital explosion.
What’s taken place in 2021, for the most part, is a conundrum of monumental proportion. And we thought 2020 had taken the cake! Record profits, record PVR, record low availability, record high wholesale values and more records breaking records. Pretty soon w’ll be staring at near-zero inventory on many lots and everyone screaming about incentives when new inventory finally makes it to dealerships.
Sure, do cut TV and radio along with paid search for models you won’r have and don’t have and skip some of the direct mail, unless it’s screaming “We Want Your Car!” (like everyone else is, by the way). Wait. Wait. Wait. Wait. Then wait longer and “save on expenses”, then scream when your website value/position/SEO drops along with your traffic, when stock does arrive you’ll expect everything to “be back to normal”.
How many times has it been said that when things are challenging, that’s when you double down? That’s truth. It doesn’t mean that we’re advising you spend incorrectly, however for dealerships not to take advantage of this time to improve variable and fixed operations (notice: operations, not expenses per se). Want to improve your service operations while inventory is tight and you’ve been making record profit per unit? Do that now, not in 3-6 months. Need to properly coaching and train your staff? Do it now, not when the phones are ringing off the hook.
Dealers do this to themselves over and over, not looking at history. Invest now in your digital operations (that means analytics, SEO, improvements in local citations and reputation management, overhaul your social media and more). Look at how to have more when the inventory does arrive and you start selling units for loses again because the consumer makes you (yeah, that’s another lie).
Or be one of the smart ones and stop, drop and roll yourself to a better business and stop looking for shiny objects and silver bullets. After thirteen plus years doing this, we’ve seen thousands of dealers get it wrong. And a ew get it right…
Best Practices: Professional Insight, Powerful Results