THE RECALL POOL
OEMs have been flooding dealers with recall opportunities and the response is typically one of two different views on this tidal wave: Some see it as a problem while others see the opportunity. For the strategic-minded dealership, it’s a perfectly profitable storm.
Viewing the trailing trend and now with three record setting years of recalls in a row — 50.99M in 2014, 51.26M in 2015 and 53.2M in 2016 — the precedent seems to be that manufacturers are taking a preemptive approach to consumer safety. These recalls potentially tee up the retailers where dealerships are expected to respond to this incredible trend and volume of recalls.
“The danger in playing a piece over and over again lies in getting stuck in a rut where you don’t ask questions anymore and you always play it the same way.” — Itzhak Perlman
We’ve all had those times in our careers when we’re stuck in a rut, or even might be losing ground. Days bleed into each other, customers’ faces start to blend and we feel like we’re simply going through the motions. Even if you’re still having successful months, life is too short and too precious to let pass by without noticing.
There’s a danger in becoming too satisfied with what we have and how we perform our day-to-day tasks. Sometimes we need a swift kick in our complacency to make our days feel new again. Here are some ways that can restore a sense of excitement to our day-to-day lives.
These days, many dealership parts and service departments are hard-pressed to find technicians. Retailers are searching for candidates who are qualified to use advanced technologies to service and repair today’s vehicles, and who see the job as a viable long-term career.
Trouble Meeting Career and Cultural Expectations
A recent survey from Carlisle & Company asked more than 22,000 technicians for feedback about their careers. Approximately 65 percent of technicians said they are “strongly against” recommending the position to someone else. The biggest concern noted was the pay structure. This opinion shouldn’t come as a big surprise. According to the 2016 Dealership Workforce Study released by the National Automobile Dealers Association (NADA), the average pay for service technicians is roughly $58,730. Meanwhile, the average compensation for a service adviser is $64,635, and a parts manager earns more than $93,270 annually on average. Greater still, the service manager earns nearly double the salary of a technician, with an average yearly income of $113,622.
Every automotive dealer believes that they run the best operation and do everything a little better than their competition. But, is this true? I have the pleasure of going to all regions of the country every week and walking into automotive stores that are new to me. I can assure you that, for most of these stores, the look, feel and customer experience is the same. Fortunately for the consumer, most dealers have done upgrades on their facilities. These range from cosmetic and operational changes to complete remodeling of their facilities. The automotive buying experience has gotten much better. But the fact remains that all franchise stores look the same. The only differences are the employees who work there — and this is where the dealer who wants to set the standard for customer satisfaction should look.
Compliance pressures are increasing, yet safety recall data errors and timing issues continue to challenge dealers to know the safety recall status vehicles they are acquiring, currently have in inventory and those that they have previously sold and serviced.
Last year saw a record number of recalls, impacting more than 53.2 million vehicles. A total of 927 separate recalls impact almost 146,000 vehicles per day. When adding the number of unrepaired vehicles from previous years, approximately 25 percent of vehicles in operation are currently covered by one or more open recalls. Industry experts expect recalls to increase in scope and frequency, with more complex technology of connected and autonomous features being included in new models.
Yes, survey after survey has shown that today’s car buyers have a great distaste for the haggling they expect to undergo when they buy a car. One Edmunds survey showed 91 percent of Millennials want to avoid the haggling of a negotiation, while 33 percent of those surveyed said they’d actually prefer to make a trip to the DMV.
Of course no one enjoys haggling. But it’s not the sales price of the car being haggled about that’s so distasteful. It’s the poor quality of the salesperson’s communication that causes the haggling. That’s the real problem.
And one pricing does not solve that problem.
There’s an awful lot of time, effort and dollars that go into selling the automobiles on your lot to willing purchasers. You have to attract prospects to your dealership to have any opportunity to sell them a vehicle in the first place, so it’s safe to say that your marketing and advertising efforts are critical to your success.
I want to talk with you about the dollars wasted in your digital marketing and advertising — and help you look at those things in a different way. Doing so will help you obtain the best value for what you’re already willing to spend and ultimately enable you to grow your business, which boils down to getting more people into the dealership
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Much of the discussion in automotive digital marketing is starting to center around Google AdWords and the quality of Website traffic that is being generated. Over the past decade, we have measured our results on Google AdWords by looking at cost per click (CPC), bounce rates, impression share and click through rates. These simple metrics worked great when cars were flying off the shelf.
Over the past few years, however, the quality of that traffic has deteriorated and the cost per sold unit has skyrocketed. The fact that every single dealership in your market is competing for the same set of eyeballs has not helped the situation. Now that sales have slowed down, it’s time to take a deeper look into those AdWords budgets.
Every person who visits your dealership, whether they come into the showroom or into the service drive, is a potential sale. In this day and age, every opportunity should be taken advantage of when the chance is presented — especially when customers come up into the service drive. These opportunities are not the main focus of salespeople on the dealership floor, but they definitely deserve some attention and time.
Selling in the service drive is no easy task, but it’s by no means impossible. There is a lot to gain by pushing your sales staff to put their sales techniques to good use and sell to service customers. To ensure that your time and effort is not wasted trying to sell in the service drive, here are a few things that can be done in order to make it worth your while:
We’ve all heard the joke: Someone would rather go to the dentist than the dealership. It’s a sentiment as old as time; consumers are apprehensive about the car buying experience. Indeed, salespeople in any industry are usually met with skepticism. “The sales process is long, exhausting and much of it takes place behind closed doors — they’re trying to get one over on me!” is the thinking. This image of the pushy, duplicitous, selfish salesperson persists because of the very adversarial nature of the sale, in which consumers try to make the most favorable purchase possible. The “pushy car salesman” archetype prevalent in movies and television doesn’t do us any favors, either