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Capitalizing on the Economy

What To Do In A “Down Market”

October 6, 2008 – The news has been harsh and bitter these past 2 weeks. The Wall Street “bailout”, jittery consumers and US Presidential election have dominated the news headlines. Auto sales have fallen off a cliff. Yet there are some things you can do, even in this economy.

Reaping what you sow

There's a law of nature that simply says, "You reap what you sow." That means if you plant an apple seed in the ground it will produce an apple tree, not an orange tree. Dealerships who have not planted the good seed of customer retention aren't going to produce repeat business. Instead, they;re suffering from the fact that they've sowed to the idea of selling only to new customers. They haven't effectively managed their opportunities so they're relying primarily on whatever stream of traffic happens to come through the door. And now they're reaping the results of that behavior.

Good news for customer focused Dealers

Many economist and market analysts view the recent drop in the stock market as a positive thing. That's because they believe the market has been over valued for a long time. Some CPA's have said the present economy has actually been good for business because the "do it yourselfer" is gone and others are fleeing from the big brokerage houses to find good consultants to manage their money. Likewise, consumers who have been treated to a consultative, long term approach to providing for their transportation needs are sticking with the dealerships that have taken care of them. They prefer the value of the relationship over and above the perceived good deal that might be offered elsewhere.

Stop the bleeding

If you're guilty of the unethical dealership tactics customers are warned about in publications like Consumer Reports, there's not a lot you can do to significantly improve things in the short term. Or if you haven't practiced good customer relationship management, you may have some trouble getting those customers back. Unfortunately, you're just reaping what you've sown. But if you want to start now so that you won't have to continue to suffer in the years ahead, consider sowing some of these ideas:

Re-evaluate your team - Hire, train and empower sales and service personnel who are able to make - and have the authority to make - higher level decisions involving their customers.
Be honest - Now there's a novel idea!
Implement a consultative approach to sales and service - The days of the hard sale are coming to an end. Consumers want people who will listen and provide solutions to their specific needs.
Update your technology - Providing your people with an electronic database management system is the only way to ensure effective and efficient customer contacts.
Commit to regular training - No matter how good you are, you've never arrived. Ask the best and you'll always find they are the first in line for training.
Consider returning to short term leasing - It's not for everyone, but the few dollars more a customer will pay for a 24 or 36 month lease can be overcome by the benefits associated with warranties and the desire consumers have to own a new car every 28 months. Of course the benefit to you is a shorter sales cycle.

Science has shown us ways to alter the natural course of certain things. We can speed things up or slow things down, but the end result of putting an apple seed in the ground is the growth of an apple tree. And dealerships that sow a positive customer experience today will reap a harvest of regular business in the future.