Connect with us

Leadership Solutions

Dealership Success Relies on Tech & Customer Service

Today’s auto landscape is a competitive ecosystem of large and small, vying for the same resource (buyers). While there are advantages to sitting atop the food chain, small animals can thrive in a niche if they leverage their strengths and compensate for their shortcomings. 

Click Here to Read More

It’s no surprise that large automotive groups enjoy several advantages over their single-store competitors due to their size. First and foremost is territory. A dealer conglomerate can own dealerships across several states, which not only creates more revenue streams, it arguably protects groups against economic dips and downturns at a specific store. Operations are defined and uniform across each store. Furthermore, multi-store auto dealers leverage their rooftop size when negotiating with vendors.

However, interesting developments are happening at the level of decision-makers. Historically dealerships were managed by lifelong automotive professionals, and in small groups and single stores, that’s still true. But large groups have taken an evolutionary leap by hiring talent from outside the pure auto sphere to include leaders from technology, banking and business. When Hendrick Automotive Group sought a new company leader in 2010, they explored Fortune 500 companies and brought on an executive from Bank of America. That’s a big change to the automotive landscape.

Even so, the top five automotive dealer groups only make up 6% of annual car sales; meaning there is plenty of space for single stores to exist in the ecosystem. The average customer doesn’t recognize whether they are shopping from a dealer group, nor are they loyal to AutoNation, but they are loyal to family-owned dealerships, especially when seen as a fixture of the local community.


The good news for dealerships large and small is that the industry has plenty of room for growth and disruption. Automotive, for one reason or another, lags behind almost every other industry in terms of tech adoption. Yes, every dealership has its DMS and CRM solutions, but to gain a competitive edge, dealerships of all sizes need to consider strategic ways to grow their tech stack to better target opportunities.

Admittedly, large groups have an advantage here in that they can leverage their size to secure price breaks on software for multiple stores. Nevertheless, advanced technologies such as Artificial Intelligence (AI) are surprisingly affordable even for SMBs. One such example is Intelligent Virtual Assistants. These automotive sales AI assistants autonomously touch and identify sales-ready prospects among existing lead pools to schedule more in-store appointments and convert online visitors into showroom test drives. This is a big help for large dealers who simply don’t have the time to follow up with every lead or small dealers looking to maximize every opportunity.

Another vital consideration is building relationships with their buyers. Selling one vehicle to one customer only does so much for a business. However, securing lifelong customers dramatically increases the amount of money spent in the dealership and can realistically generate a half-million dollars from one family of loyal shoppers. Similarly, re-engaging car buyers for service and repairs generates 60-70% profit margins and keeps your dealership top of mind between vehicle purchases, so also look for automotive service AI assistants that will prompt auto buyers to come in for tune-ups.


The takeaway? Competition among automotive dealers is essentially the same as it has always been: competing for customers. There is plenty of space for both large dealer groups and small family-owned stores to exist in this space. Thriving businesses will adopt the technologies and techniques they need to keep customers at the forefront.

Click to comment