Leading Change in a Challenging Market – Part Two
Strategic Leaders Provide Focus
Scarcity Brings Clarity
Leaders bring clarity and focus through challenging times. “I believe scarcity breeds clarity: it focuses minds, forcing people to think creatively and rise to the challenge.”, said Google Co-Founder, Sergey Brin in his 2008 letter to investors.
While it’s hard to imagine a more bulletproof organization than Google. It just goes to show you, every industry and organization will experience difficult times. Resilience is the result of embracing challenges with creativity. As markets expand and contract, those who rise to the challenge who thrive.
What Needs to Change?
“By changing nothing, nothing changes.” Tony Robbins
Challenging markets are the perfect time to evaluate your overall strategy. If your default mode is to avoid change, a challenging market will only highlight existing problem areas in your dealership. For example, are there unaddressed issues with your staff? When times are tough, a strong, reliable team can make all the difference. Staff and turnover issues cost dealers billions of dollars in revenue every year. In addition, staff problems negatively impact your customer experience.
Next, take a look at your vendor relationships, and ask yourself the following:
- Are your vendor partners transparent in their reporting? Are they willing to stand behind their product or service?
- Do your vendors respond to requests for support in a timely manner?
- Are the contracting practices of your vendors dealer-friendly? Is there mutual accountability?
As someone who has worked on both sides of these important partnerships for many years I can say with confidence: today every market is consumer-driven, including dealership vendors. If your vendor customer experience isn’t measuring up, or you aren’t seeing a measurable return on your time and money, it’s time for a change. There are many vendors who will appreciate being given the opportunity to work hard to earn your business and continue working to keep it.
Data-Driven Pricing, Sourcing, and Sales
In a recent article, Reuters journalist Nick Carey reported that industry leaders at the top tier are making strategic, data-driven maneuvers to protect profits, something that wasn’t possible in prior downturns. Carey said, “Such maneuvers include transporting the automobiles to where the greater demand is based on real-time pricing data”.
If auction houses and OEMs are using data to their advantage in the current market, it makes sense for dealers to do the same. Getting focused on sourcing smarter, pricing competitively, and improving turn will deliver measurable return on your time and attention.
This doesn’t mean your hard won experience is irrelevant…far from it! You are the expert on your dealership and the strengths of your team. Knowing your strengths, where you need to improve, and having the ability to view your market like a consumer are an advantage in any market.
Strategy Based on Strengths
Exceptional leaders are able to consider the strengths of the dealership while remaining aware of potential blind spots. You may have weathered challenging markets before, but it is doubtful many of the same survival skills you learned will apply to the current marketplace. The ability to view your market from a consumer’s perspective in real time will allow you to act, rather than react. Pricing, stocking, and sourcing with your strengths and market data give you the ability to adapt quickly. As you map the way forward, you’ll want to:
- Focus on your dealership strengths when communicating changes in strategy.
- Communicate expectations and next steps for each member of your team.
- Be accountable for results. (Schedule progress checks in advance to show your commitment to lead with accountability.)
Uncover Your Competitive Advantage
No matter what the latest news reports say, people are still buying cars. The list of things you control in any market is short, so continually improving those areas is critical. What cars move quickly in your market and are easy to acquire? What are your salespeople good at selling? Is the person in charge of acquiring cars given access to market data? Are they able to filter the data through your dealership strengths and strategy? If not, invest time and effort to that end.
Today’s consumer is product-savvy, thoroughly researching vehicles before ever visiting a dealership. In fact, the dealership visit is the last step on their journey to purchase. The dealership with salespeople who pride themselves on product expertise will have an advantage in a challenging market. Therefore, avoid stocking vehicles your team isn’t good at selling, even if they appear to do well in the market. Independent dealers should avoid competing with franchises on their own makes and models as much as possible. Franchise salespeople will have the advantages of training, brand expertise, certified pre-owned vehicles, OEM financing, and more. Your goal should be to find a product niche’ that offers more opportunities for you to win.
The successful warrior is the average man, with laser-like focus. – Bruce Lee.
Leading through challenge and change is rewarding and it requires humility. If you’d like to take a look at what’s selling in your market, how your competitors are doing, or get a few ideas for how you can improve, please email me or schedule a time on my calendar. Together we’ll take a look at the data, evaluate the strengths of your team, and determine your next steps forward with confidence.