Are You Ready for a Downturn?

Autosphere » Dealerships » Are You Ready for a Downturn?

It’s time to prepare for the coming slump.

In our industry, it’s not uncommon to experience peaks and valleys. That’s just the nature of the beast, and we’ve all had to roll with the punches.

Even better, it’s a good idea to prepare yourself and your store for the inevitable slump. Let’s face it, we’ve had about four years of consecutive growth, and many manufacturers have forecasted a decline in sales.

Already, there has been a dip in new car sales in Canada over the last couple of months, year-over-year. So it would be proactive to look at constricting some of the peripherals you have in place and making sure they’re generating the maximum ROI. Secondly, many of those peripherals are supplemental staff or vendors. Are you fully utilizing those individuals?

For example, if you have someone who’s merchandising, and their duties include taking photos, making sure you’re online and the details are accurate, your merchandiser could take it to another level, pricing inventory, examining turn and even purchasing inventory. They could be working with the lot attendant to ensure that the on-lot merchandising of vehicles is perfect. Make sure every individual’s tasks are being maximized and supported, for the best return on your hire.


Take a look around your store. Are you using every square inch of space that you own? Is your inventory being presented in the right places? Can you maybe squeeze in an extra car if need be?

What’s the messaging on the space—can you improve on it? Now’s the time to ensure your outside messaging is the best and most consistent it can be, so the public will not only understand it but also find it compelling and engaging.

When you walk around the inside of your store, is the space being used as effectively as possible? Is the setup of your in-store inventory done correctly? Can you maybe squeeze in another car, another PA on the floor?

Take a moment to analyze the cost of housing inventories, such as tires, mechanic supplies and accessories. Are we constantly assessing for deficiencies? Would it be more profitable to have a logistical change, or is there a better solution internally? Is an initial investment needed for long-term gains?


Then there are your vendors—do any of them overlap? Sometimes, they have new technologies that might eliminate a second vendor. Or, you may have technology that you’re not using to its fullest, and you’re paying for it! Where else are you paying for things that you’re not really using? Would that Customer Service Representatives (CSR) be a resource you could use?

Understand your touchpoints— are they doing all they can for you? For example, if you send your inventory to Kijiji, is your profile accurate? Does the lead go to a working contact? Is all the money you’ve invested in your touchpoints accurate, and is it being funnelled back to your store correctly?

At this crucial time, you can benefit from an outside analysis or audit. A third party consulting firm will work with dealers month over month to analyze, report and assess their touchpoints and find areas of opportunity to better use or fix them. As a dealer, you want to know if your staff are making the most of their tools and services, as well as your vendors representing your store. What kind of hiccups are in your processes and systems? Who are the vendors that are not working or aligned with you?

Any third party agency that’s doing an audit or assessment should be providing a complete analysis for all your dealer-to-consumer communications and interaction touch points. For example, your reputation profiles; marketing communications; phone systems; lead management; vendor representation; and aftersales customer outreach and custom reporting to ensure progress.

Act now

Or it could go back to using the resources you already have on hand. If you’re not part of a performance group, that’s an option to explore. Secondly, your Area Service Manager (ASM)—are you having proactive or reactive conversations with this individual? Are there manufacturer resources available for your store to benefit from (ie. specialized vehicle to borrow, event equipment)? If you don’t ask, you’ll never know. Now is when you want to fully squeeze everything accessible to you, so that you’re ready when the downturn happens.

In face of the inevitable decline, dealers are likely to be a little more restrictive with their spending and outlay. But you should be aware of these areas, and investigate all avenues available to you with both hats, your downturn hat and your utilization hat. That downturn hat may be a new one for many of us, and it’s a little different. It’s a restrictive hat. It’s understanding areas that you’re not fully taking advantage of, and thinking of how you can maximize your ROI.

So take a look at your store from the outside in, your digital realm, your vendors, communications flow, email, and person-to-person interactions. Are all of these serving you as best as they can? Are you getting full capacity at your current load? Are you getting your money’s worth?

If you’re not, the time to start reviewing, analyzing and auditing your systems has definitely arrived. By taking the right proactive measures, you can ride out the coming downturn and maybe even improve your overall performance with less of an investment!

Categories : Dealerships


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