Dealership Growth Strategies: Effective Process Implementation

Effective Process Improvement in Automotive Retail

Having streamlined protocols and methods in place helps ensure systems run smoothly and efficiently for your team and your customers.

Achieving operational excellence in dealerships is about implementing the right strategies and processes. Some broad examples include (but aren’t limited to) the following:

• Improving the dealership’s sales pipeline (via software, sales tracking tools, training programs, etc.)
• Conducting frequent market research to stay ahead of trends and changing expectations
• Demonstrating exceptional knowledge around products and service offerings
• Focusing on establishing, building, and nurturing strong customer relationships
• Embracing hybrid marketing that blends classic offline techniques with online technology to create one seamless customer experience

Naturally, technology is a large part of this equation. Implementing a suitable dealer management system (DMS) helps underscore operational efficiency and support long-term profitability.

Here are some tips to keep in mind when integrating advanced service technology and digital systems into your long-term dealer profitability strategy.

Strategize for all areas of your dealership

Efficient dealership process optimization includes every department within your daily operations. For example, a strategy for upgrading your organizational tech can (and should) include inventory management systems, customer relationship management software, digital diagnostics tools, digital service lanes to streamline check-in, etc.

Create a clear implementation plan

Process improvement starts with a methodical and intentional approach to reaching desired levels of success. Get the ball rolling by conducting an evaluation of your current strategy. Pinpoint what’s already working well, and which areas have room for improvement. Is your appointment scheduling software hard to utilize by busy service advisors? How is the handoff process between the sales and F&I manager’s office?

Have a transition plan

Implementing new operational processes for your dealership will involve change. New software and digital management systems come with a learning curve, even for tech-savvy team members. It takes time to determine how new growth strategies are affecting the numbers in real time, as well. Training and mentorship resources can help as you change policies and procedures.

Once you’ve narrowed down what challenges you want to overcome, develop a solid plan that includes timelines, business goals, integration requirements, and assigned responsibilities for individual team members and managers.

Achieving Success in Goal Setting and Dealership KPIs

Successful targeting of objectives is crucial as you plan for improving your dealership’s profitability. Selecting, tracking, and analyzing the right key performance indicators (KPIs) is how you’ll know when you have reached specific goals.

Keep in mind that solid business plans are SMART: Specific, Measurable, Achievable, Relevant and Time-bound.

Your growth strategies should be detailed and lay out exactly what you are looking to achieve, how you plan to reach your targets, and by when. Choose trackable KPIs that align with your goals. Some suggestions to consider include the following:

Gross profit margin

What do your total profits look like after all labor and parts costs? How much of your dealership’s profitability is due to sales or fixed ops? Do these numbers and ratios align with your long-term goals for acquiring new stores or selling existing stores?

Finance and insurance (F&I) profit per vehicle

F&I plays an important role in your dealership’s bottom line. Regularly reviewing your current process is a healthy measure to take. Ask yourself, does your current provider serve as a partner that is truly dedicated to your dealership’s success? Do they offer in-store training or are they hands-off in the execution? If you’re not happy with your current F&I partner, it may be time for a change.

Cost per lead

How much does it cost your dealership on average to convert a qualified lead? A high cost per converted lead may signal a need to upgrade your marketing strategy. Reviewing your digital footprint and your advertising strategy (whether done through mailers or online ads) is beneficial to see if you’re reaching as many customers as you could be.

Monitor your chosen KPIs carefully, as they can be useful in optimizing pricing, polishing your sales strategy and implementing new leadership strategies. Be prepared to pivot quickly if you notice signs that a portion of your strategy isn’t playing out as expected. The sooner you identify a potential problem, the more quickly you can turn things around and get your plans back on track.

Cross-Functional Collaboration: Improving Dealership Performance

Driving dealership profitability means ensuring all of your departments are cross-collaborating efficiently. For example, your sales team needs to be working alongside - not separately - with the service department and F&I team. Effective leaders can help create and lead this unity among various teams. Below are a few leadership tips to consider.

Leverage the right digital platforms

Fully integrated digital options like customer relationship management (CRM) systems take a lot of the guesswork out of keeping a dealership’s departments connected. They allow team members to access updated sales strategies, real-time customer information, and more metrics as needed.

When staff are consistently on the same page with access to up-to-the-minute data, customers get the dependable and streamlined service they deserve. You may also want to consider implementing additional communication-focused systems for exchanging ideas and discussing strategies.

Promote feedback culture in your dealership

Evaluating individual and team performance is a crucial part of keeping your team connected and united when it comes to improvement. Develop a system for giving, receiving, and applying feedback as needed across all departments. Work on fostering a company culture where assessments are seen as a valuable tool for growth.

Consider implementing incentive programs and valuable growth opportunities throughout the year to keep team members motivated and excited to perform well.

Make training a priority

Effective, adaptable training is a crucial part of keeping your dealership’s team sharp and efficient. Some ideas include:

• Workshops or standalone sessions that cover topics like new vehicle features and cutting-edge sales techniques
• Peer-to-peer learning opportunities, mentorship programs and regular meetings
• Expert-led resources that can help various departments stay on track

Ultimately, your customers should enjoy a cohesive, professional buying experience that’s consistent from one department to the next. Effective cross-collaboration helps make this a reality and keeps customers coming back.

Building Strong Customer Relationships for Long-Term Process Optimization

A strong dealership customer relationship management (CRM) system is a must for improving dealership operations management, especially over the long haul. Your CRM provides reliable access to real-time customer data and service updates. Many systems also offer managers and marketing strategists valuable insights into customer behavior, as well as their interaction history with the dealership.

All of this supports customer satisfaction index (CSI) improvement. Your dealership’s CSI scores supply a solid overview of how satisfied your customers are with your services. More ways to leverage your CRM and boost CSI involve tailoring processes to customers who are at different stages of the buying journey.

Personalize customer-dealership interactions

Refrain from approaching customers with canned, assembly-line-style interactions. Customers are not interested in buying from a dealership that views them as simply a sale. They want to be viewed and treated as individuals. Focusing on personalized interactions like listening to their vehicle desires and concerns can help you deliver this experience.

You can also leverage CRM data to customize your communications with your guests, including special offers they’re given. The goal is to meet customers in their buying journey. If they have visited the dealership multiple times, treat them as a valued customer. Reference past interactions and unique preferences to make outreach efforts more proactive too.

Empower team members

Dealerships advance opportunities for profits when team members feel empowered to offer the best possible service to their customers. Top-tier CRMs facilitate fast resolution of inquiries and seamless access to everything employees need to know about a customer’s history.

These systems take the guesswork out of keeping in contact with customers by automating functions like sending out service reminders, facilitating follow-up emails, and recommending the right offers for specific customers at certain buying stages. Staff will have more time to interact with customers or manage repairs or requests when everyday tasks are already taken care of.

Facilitating Leadership Development in Dealership Operations

Strong service teams start with equally strong leaders. Investing in leadership development and ongoing employee training is the key to operations that will drive real results. Managers typically are promoted based on their performance achievements (ex. Selling the most cars, writing most service RO’s, etc.). There is little training on how to transition from a doer role to one that must accomplish things through others.

Determined leaders help teams maximize their full potential and accomplish goals for your dealership’s bottom line. There are many benefits to treating further skillset learning as a top priority.

Boost employee engagement and productivity

Investing in talent development helps your entire team feel their job has purpose and direction. Employees are more motivated, productive, and loyal as a result. One way to begin is through identifying standout individuals who, if given the right tools for success, could be effective and motivated leaders for your team. By establishing strategies to boost employee engagement and opportunities for leadership, you demonstrate a dedication for their personal career journeys.

Lower staff turnover rates

Effective management and solid leadership development lead to happier, more satisfied employees. They support a positive company culture, a healthy work environment, and a general feeling that your dealership is a good place to work. Acquiring and training the right new talent gets expensive over the long haul, so it is beneficial to work hard to retain the hardworking individuals that you have.

Future-proof your dealership

The automotive world is highly competitive. It’s also constantly changing, so success-oriented dealership owners need to do everything they can to stay ahead of the curve. Professional leadership development resources and team training programs help managers adapt to changing industry trends and standards. Employees across your entire dealership can level up their skills to stay competitive.

Not only do the intentional programs keep your business profitable, but they empower your entire staff to keep growing in their respective fields.

Close skill gaps on every level

Comprehensive leadership programs don’t just create better, more efficient dealership managers. They can help promote leadership mentality at every level throughout your company. Leverage yours to support talented team members and open new growth opportunities.

The right programs can also help close skill gaps. Help your entire team enhance their backgrounds by developing more of the skills you want them to demonstrate as part of your growing dealership. Partnering with a dealer provider that offers tailored training programs to fit your unique needs can be helpful in building strong leaders and in fostering a growth environment for future leaders.

Leading the Way to Dealership Profitability Improvement

Embracing the right automotive business strategies, leadership programs, and customer satisfaction techniques will help tackle challenges and ultimately differentiate your dealership from your competitors.

Start by implementing some of the dealership process evaluation techniques discussed here, as well as looking into your options when it comes to raising your customer satisfaction index scores, enabling training for leaders, and advancing other departments. The profit margins you’re striving for are within reach!