Speaking with NADA’s Michael Hayes recently, we chatted about efficient markets and the role that transparency plays in the success of a dealership. He is the director of the Academy, NADA’s training engine for future dealership managers and GMs, now in its 43rd year.
“These last two years have greatly accelerated the acceptance by dealers that the more information they share, the more opportunity is created. Transparency doesn’t limit opportunities — it makes the transparent dealership more valuable to its markets,” Hayes said.
“This is the description of an efficient market: buyers and sellers having equal amounts of information,” he added.
Readers of my columns know that for years I have promoted workflow efficiency and information sharing as a competitive edge. The industry and its dealers are joining the movement.
Efficiency and transparency that flow from fixed to variable and on to the customer start in the engine room of the dealership, the reconditioning department. It is the foundational recon metric — three-to-five-day time-to-line that holds gross, reduces holding costs and speeds up internal parts delivery so technicians work faster. These workflow and information benefits percolate to contracts in transit, and for sales, builds value in the deal and delivers exceptional customer experience.
All this adds up to the entire dealership management group having the right information at hand for better opportunity analysis.
“The Academy’s goal is to get people to think like an investment analyst,” Hayes said. “If I am managing inventory, whether new or used, I am an investment analyst. The goal is not to see how many assets I can keep for how long, but to see how much money we can make and keep customers happy doing so.”
Equality turns on information. Aren’t your customers asking you for more information than they ever have? Now it is convenient, fast and click-easy to provide them with decision-making data. This information includes reconditioning investment in the car they’re considering. It includes vehicle history reports, service histories, original OEM window stickers, third-party evaluation data, vehicle photos and videos — more and more educational materials to help customers make more informed decisions. Not just price decisions, but value decisions. Is this used car going to be a good value for me? Will it perform without disrupting my budget? Can I trust what this dealer is telling me?
In my world, we see among our customers how transparency is improving work-related communications, decisions and outcomes from the bottom up to the top down. Within this flow are staff, vendors, managers and customers. This information transparency helps get vehicles ready to sell faster and provide buyers with important details about that vehicle they can access no other way.
Today’s technologies make these improvements possible and practical. One of them is the use of video to bring transparency, immediacy and equity to dealer-to-customer communication.
“Whether it’s parts or service, new or used cars — what delivers more transparency than a video of what we’re trying to show the customer?” Hayes asked.
“What is more transparent than showing the customer or used car manager the car on the lift during the MPI [multi-point inspection] and then showing those inspection results? It’s information and transparency for internal clarity and for the sales process.”
Vehicle reconditioning is no longer a single, isolated event in the car dealer’s road to sales success. Rather, dealership reconditioning software delivers time-saving organization and personnel-performance encouragement through a flow of clear and actionable information to group-level managers, technicians, parts managers, detailers and vendors to help everyone meet your overall goal, build trust and value with the people considering your cars.