Part 2: 6 Must-Have Strategies for Dealer Success.
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Part 2: 6 Must-Have Strategies for Dealer Success in 2017 (and beyond)

In Part 1: The Rapidly Changing Industry in 2017 (and beyond), I discussed the top challenges facing our industry right now, even suggesting 2017 is quickly shaping up to be one of those “tipping point” years.

The good news is there are a number of really smart people out there with solutions to help you. I’ll touch on six key areas to pay attention to. Much of this you know, but you can no longer afford to say “I’ll get to it tomorrow”. As I said before, change is happening fast and if you don’t start to adapt (now), the fit who do will start to chip away at your market share and eventually dominate your market.

I would encourage you to look deeply into each of the must-have strategies below and ask yourself honestly ‘Have I done all I can or is there more I can be doing?’. For any areas in which you’re falling short, find people and technologies that can help you. There are a ton of great consultants in the marketplace and don’t forget your 20 groups, which can be a great resource. is also a good place to get feedback from fellow retailers on vendors. Believe it or not, your OEM also has solutions.

It’s important to educate yourself on the choices out there. Always look for people and vendors that:
A) Are transparent in their pricing and contract terms
B) Have a track record of satisfied clients
C) Are involved in the industry
D) Have industry veterans on their team who truly understand our business

Strategy 1: Really Use Your CRM.Must-Have Strategy #1: (Really) Use Your CRM Tool

Every customer who reaches out to you is valuable. There’s no longer another 10 people in line behind each buyer if you blow it with them. You need to (really) leverage your CRM tool. This includes tracking leads and sales by source, as well as holding your people accountable for contact rates, show rates, and close rates. It’s about how all these metrics mesh; don’t focus on just one. Also make sure you understand the underlying drivers of these metrics. For instance, listen to your recorded calls, look at the detail. Does what you see here match what you’re seeing in your CRM? Your managers are your eyes and ears, they must be 100% bought-in to following the process and not just checking boxes to make sure reports look good.

I recently visited a dealership that needed to sell an additional 50 units per month to hit their profit goals. They had a 2.5% average close rate in their CRM tool, with 800 leads per month flowing in. If they focused on best-practice follow up with customers, they should have seen at least a 9% overall close rate. And if they hit that expected close rate, they’d be picking up 52 additional units per month from customers they already have showing up.

Let’s assume they do everything right and if they’re still at 2.5%, then they need to get better leads. One of the best sources of high-quality leads is qualified traffic sent directly to your dealership website through targeted digital marketing. I’ll talk more about that in Must-Have #6…

Strategy 2: Mine Your Database.Must-Have Strategy #2: Mine Your Customer Database

The industry average retention rate of customers is 27%. What’s yours? It’s essential to leverage your database of previous customers to retain them. Remind them why they purchased from you in the first place.

Customers within 7 miles of your store should also be servicing with you. They are your high-value customers and if you don’t find ways to delight and entertain them, they’ll find another dealer who will.

The most effective way to achieve this is through technology. If you haven’t already, it’s time to research and consider DMS data mining and retention tools to unlock sales and service opportunities with folks who have already done business with you. When searching for the right tool or resource, look for transparency in reporting, contracts and pricing. Also, make sure you’re comfortable with their attribution models (i.e. how they take credit for a sale). Overly broad attribution models are used by vendors that have difficulty showing results.

Strategy 3: Control Your Inventory.Must-Have Strategy #3: Control Your Inventory

Now more than ever, you need to be vigilant about inventory control. Once again, technology can help. As with almost everything these days, there are tools in the marketplace built specifically for this need. You’ll need to keep track of inventory turns and be firm with your OEM when it comes to allocations. This is easier said than done, but your survival is dependent on this. Your inventory carrying cost is your single largest expense. Be extra mindful that the market is slowing down when ordering. As I mentioned before, passenger car sales are way down and SUVs are way up. You need to pay close attention to the mix of your line up.

Strategy 4: Revisit Your Floor Plan Financing.Must-Have Strategy #4: Revisit Your Floor Plan Financing

In the face of rising interest rates, it is critical that you have your floor plan financing in order and under control with your OEM and bank(s). Your CFO is your best friend here; leverage them to ensure you’re doing all you can. Try to find longer-term contracts with rates locked in. This is a huge cash flow lever in your business and can help mitigate some of the effects of the financing challenges discussed in part 1.

Strategy 5: Recalibrate Your Staffing.Must-Have Strategy #5: Re-Calibrate Your Staffing

Staff your dealership based on the main drivers of your business. For instance what is your ratio of sales staff on the floor vs. Internet sales staff? Trim the fat from the areas that are less relevant. Expand and develop staff in areas that are more relevant. Many larger dealer groups are employing data analysts and marketing specialists. Look to your local colleges to find talent. In today’s world, a data analyst can provide just as much ROI as a good salesperson.

It’s also wise to cross-train key staff members so they can be flexible, as needed. Once again, technology is key to ensuring your staff is working as efficiently as possible, doing more with less. Streamline processes and focus on using your core technologies and resources (CRM, Customer database, Inventory management, process consultants, 20 Group, etc.)

Strategy 6: Embrace Your Digital Advertising.Must-Have Strategy #6: Embrace (and Optimize!) Your Digital Advertising Efforts

One of the most cost-effective means of reaching in-market shoppers is through digital advertising. The one caveat I’ll add is that it needs to be done right, leveraging advanced technologies and expert management. Poorly managed digital advertising will not yield optimal results. In fact, you’ll be wasting precious advertising dollars if you’re not targeting the right people, in the right place, at the right time.

Remember, your customers are researching online and mostly with their smartphone. They’re not shopping lots any longer, they’re watching videos on YouTube. And, as I mentioned before, their journey is potentially long and fragmented.

Digital advertising enables you to put the right message in front of the right people, at the right time, making it extremely efficient when executed with expertise. The old “spray and pray” days are long gone. With TV viewership dropping and fragmenting, you simply cannot afford to just buy demographics. You must target your ads directly to in-market shoppers along their path to purchase.

A word of caution: Beware of becoming overly reliant on 3rd party leads / traffic providers. Generally, if more than 50% of your “online” budget is flowing to this group, you are not diversified enough and you are overly dependent on them.

Instead, it’s critical that you place a priority (time, technology, budget) on digital advertising efforts that enable you to become more self-sufficient and build your brand in the marketplace (rather than a 3rd party’s). Google rewards advertisers that actually sell products directly to consumers by giving retailers of products higher quality scores which lowers keyword bid amounts. And don’t forget the power and importance of leveraging your OEM brand.

In a sea of many, there are but a few really good digital marketing providers that offer both the technology and expertise that will put you on equal footing with the “big boys” — and help you grow your market share.

When evaluating your current digital marketing provider, or considering a new one, be sure to do your research and ask the tough questions that will cut through to the core of who they are and what they offer. There are many that make claims and promises and few who can truly deliver on them.

First, see if they can pass the transparency test. Do they offer transparency in contracting, reporting metrics and performance? Successful and trustworthy vendors are those whose objectives are aligned with yours. Transparency is a key indicator of this alignment. In other words, they have nothing to hide.

Technology has been a recurring theme throughout this article and I’ll stress it again here. Look for a partner that has the technological capabilities to both identify market opportunities at a very granular level and deliver highly targeted ads, with the right messages, at scale–ads that are optimized for mobile devices, as well as delivered across multiple networks (i.e. Google and Bing, YouTube, etc.), to maximize your reach.

As much as I’ve talked about the importance of technology, it’s much less effective without experienced, dedicated people to interpret, manage and leverage it correctly. At a minimum, your digital advertising partner representatives should be Google AdWords Qualified Professionals and Bing Accredited Professionals. And they should be able to make strategic recommendations, based on actual market and campaign performance data, that continuously optimize your campaigns. “Set it and forget it” is not good enough. Demand more. There is no substitute for expertise.

Digital advertising is highly complex. Technology (and the shoppers using it) are changing and evolving quickly. Ask yourself if your digital advertising partner has the technical capabilities to consistently deliver results in this evolving environment. Ask yourself if they’re helping you grow your market share? Ask yourself if you even know what your true market share is?

The automotive landscape is pivoting this year. Right now.
In order to survive (and thrive) as an automotive retailer in today’s expanding digital environment, it’s essential that you evaluate and modernize your processes (and ways of thinking), from top to bottom.

The fit, who embrace change and adapt quickly, will survive (and thrive!), while the stubborn and slow-to-adapt will find themselves sucking wind.


Call us at 1.800.683.7940 or Contact us for a free, no-risk,
no-obligation consultation with a Market Share Strategist.

Mark Taylor, Vice President of Business Development
At Showroom Logic, Mark is responsible for acquiring and managing strategic partnerships with the Automotive Manufacturers (OEMs). In addition, Mark identifies and manages strategic partnerships within the automotive marketing industry.

Prior to Showroom Logic, Mark spent over 15 years with AutoNation, the largest Automotive Retailer in the US. During his tenure there, Mark headed up Business Development, where he worked to identify, negotiate, implement and manage AutoNation’s online strategic partnerships, as well as manage OEM relationships in the digital marketing area. Mark was also responsible for leading AutoNation’s SEM program.