Adam Ouart on Agent Focus on Faster Turnaround, Better Service
Q. How will the compliance climate impact agents?
A. Even with everything about the CFPB up in the air, smart dealers will continue focusing on their compliance efforts. After all, the Federal Trade Commission and Journal of Commerce are the real regulators in the dealership space. And, they aren’t under scrutiny. For this reason, agents will need to continue to make compliance a priority in their ongoing dealership engagement. Dealerships will still rely on their agents to provide ongoing compliance audits and training services.
Q. What changes can agents implement to improve dealer profitability?
A. With analysts predicting a flat market in terms of unit sales, dealerships will be in preparation mode for the eventuality of a market turn. Dealers will begin to rely more heavily on agents to provide market differentiating consumer protection products, augmented with effective training to maximize every sale. In addition, agents will be pressed to tie customers back to the service drive, through F&I products and ongoing training.
As dealers look to gain greater profitability from their F&I operations, dealers will put pricing pressure on agents, who at the same time are being held to extremely high customer service standards. For this reason, agents will have a heavy focus on demonstrating return on investment to justify their cost structure with dealers.
Agents will also feel the pressure to help dealers shorten transaction time and pivot more of their operations online. We’ll see a growing investment from agents in the bourgeoning market for digital dealerships along with increased in-store engagement to help dealers on the ground level.
Lastly, with a flat market, agents themselves will evaluate how to insulate their business from the potential of shrinking profit margins. They will look at dealership production levels more closely and will be more engaged with dealership operations overall to keep production levels high. At the same time, agents will also focus more of their efforts on acquisitions to offset any production level decrease.