Do we need to start over??
Probably not but are we too stubborn to change?
In many talks with leaders in our industry, a common thread runs through every transformation discussion. Of course, it plagues us all from time to time, but in the automotive industry, it is deep-rooted. That thread is the complacent mindset of “this is the way we've always done it.” Now before you stop reading, humor me for a minute.
Has transformation begun in our industry, and have dealers started down that journey to some degree or another? Yes and Yes. So why bring it up here if most of the industry is working towards that change? The answer is simple; we are taking too long and in many cases not fully committing to the goal. So let me peel back the onion a little to make my point.
Are we committed to allowing our customers to shop their way and do most of their purchasing behaviors online? Yes, most of us are. However, are we creating a seamless process so that when the customer is ready to buy, there is no duplication of effort or delay in finalizing the deal, allowing them to drive off the lot in record time?
Are we directing our staff to increase their trade acquisition percentages to grow our used inventory organically? I would say that is what I hear most from dealer principals. However, are we changing our compensation plans to incentivize them to perfect that new craft the same way we have when selling a vehicle?
Are we acquiring and adopting the tools, and training, so our service advisors can provide a best-in-class experience to grow customer acquisition, CPRO, and CSI in the service bay? Again, I would say most are trying. However, are we incentivizing the advisors to increase those key metrics like we do our salespeople? Similarly, they tell me the answer is no.
Most of the dealers I speak to say they are unwilling to pay significantly higher incentives to change behavior because they have never done it before and are not sure there is a genuine need today. This type of thinking is a critical mistake on two fronts. First, we are seeing the highest workforce turnover in history. 4.2 million resignations in August and 4.3 million in September. A significant enough phenomenon to be called “The Great Resignation.” This creates a turnover shock in your business and can cost a lot more than compensation plan increases. Our people are our most valuable asset and if we don’t pay them, train them, value them and advance them, they have more options than ever before to leave for a place that will. Second, it is a critical error to think that all you need is to invest your hard-earned dollars in technology and marketing to grow your business. That would be like having a student driver test drive a new concept for a Bugatti and relying on their analysis to go to production. The value of your spending on technology and products will never be fully realized until you turn your staff into an Andy Wallace (Famous Bugatti Test Driver).
The lesson for us all here is simple. We have to let go of what we know worked in the past and may still be partially working today. Our buyers are changing, and Covid accelerated that change. We have to help our people engage our consumers their way with a best-in-class experience. Software and marketing will only get you so far. Our people have to change too, and we all know compensation drives behavior change.
