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Dealerships Die by Suicide

The retail automotive industry has changed and evolved in many ways since 2000. Technology and the internet play a dominate roll in sales and service. However, many owners and managers are still operating under the same philosophy as they were in the 1990’s. In some ways this is the right way to operate, in many ways they are unwittingly killing their business.

The retail automotive industry has  changed and evolved in many ways since 2000.  Technology and the internet play a dominate roll in sales and service.  However, many owners and managers are still operating under the same philosophy as they were in the 1990’s.  In some ways this is the right way to operate, in many ways they are unwittingly killing their business.

Ego and denial go hand-in-hand and like an alcoholic, a bad manager will be delusional about his impending doom even in the throws of death.  Sad?  Yes.  True?  Yes.  Avoidable?  Absolutely.  

Isaac Asimov asserted that everything in life can be determined with an equation.  The sad thing I often witness in our industry is that so many dealerships are seemingly unable to see certain equations as fact, as this would mean admitting they have a problem.  This phenomenon in the the car business is of great advantage to the whales like Penske and Van Tuyl.  They love nothing more than a willfully blind owner of 1-10 dealerships that is hyper focused on what he thinks he knows about the business.  Hundreds of dealerships in the next 5 years will be sucked up by a handful of whales and the former owners will have missed the opportunity to have huge profits and true success beginning with one ostensibly hard task…change.  Small kings are often conquered by bigger kings taking territory inch-by-inch.

The recipe for success is actually not that complicated, however the right ingredients are hard to find with so many vendors that have built there business on a firm foundation of bullshit.  However they know that many car dealers and managers seem to love the smell.  Arrogance and ignorance go hand-in-hand as much as bullshit and the car business.  The dealerships who cease to be seduced by the “wining and dining vendors” will have a chance at finding the right ingredients to accomplish the two primary goals of being a car dealer, conquest customers & customer retention.  How this is accomplished evades many in our industry.

The positive side of what I have seen in spending time in almost 1,000 new car stores the past decade, is that there are some rising stars.  There are some who get it.  This is one of the natural rules of capitalism.  Some of the powerful dealers will lose relevance and those who are just starting in the business will dominate it in the next decade.

I know many managers in dealerships far more talented than I at managing people, inventory, and selling customers. However, I’ve become a proven expert at knowing how to reach new organic customers (conquest) and often triple the customers coming back to a dealership (retention).  It involves ever evolving data sources and creative mediums.  It involves investing in multiple symbiotic initiatives that work. It requires long term effective branding. Its also about educating my clients as to where they are getting screwed. Where do I get this wealth of information? I am always learning from deep consistent analysis of  the market and an elite group of owners/managers who are the true wizards of our industry.

I grew up in the retail automotive industry and have had the pleasure of knowing some of the greats and some of the jokes.  I’ve held almost every position in medium and large dealerships.  My career in and around this industry spans 25 years.  It has been my privilege to serve some of the smartest owners in this industry and have learned so much in the process.  I wrote this piece as I can no longer stand to see car guys I love hemorrhage because unscrupulous vendors, consultants, and managers are delivering antiquated ineffective services that ultimately result in a dealership  slowly dying by suicide.