Over the past three years, market consolidation in the retail automotive space has been a trend that has continued to gain momentum. For example, in 2011, Penske Automotive owned 166 franchises in the U.S. and today, that number has grown to 173. Large, privately-held dealership groups have rapidly acquired rooftops across the country throughout 2012 and 2013. As the economy continues to recover and people return to purchasing cars, it stands to reason that dealership consolidation will continue to escalate.
As a dealership agent, you are probably focused on what this means for you. You have probably felt the sting, or know someone who has, when one of your dealership clients gets bought out by one of the large dealership groups. Unless, that dealership group uses your services, you automatically lose that business.
It might be tempting to fall prey to the idea that there’s nothing you can do about this. You have no control over dealership consolidation. But, there is something you can do. In fact, there are three definitive actions that can make a difference.
Diversification
While it’s true you have no control over which dealerships groups like AutoNation, Penske or any of the other large dealership group take over. You do have control over your own business. So how do you insulate your business from consolidation? It’s simple. Always be diversifying.
When business is soaring, it’s easy to sit back and enjoy the fruits of your labor. However, it’s better to always assume this time will end all too quickly. Don’t get tied down with simply servicing your clients. Every client has a lifespan. While servicing your clients and maintaining relationships is important, it’s equally important to always work to expand your business.
Network
You’ve secured a client and established relationships with the top brass. However, while the dealer principal and GM are important, lower-level employees could provide inroads to future business. While servicing that client, you also need to fortify relationships with other sales managers, F&I directors, and general employees. You never know when lower level employees will become decision-makers and you want to have positive relationships built up by the time they reach the top. In addition, it’s important to maintain contacts when employees leave their current dealership for those same reasons.
Be a Problem Solver
You do this every day for your current clients. Why not do it for prospects? When researching prospective clients, do your due diligence in identifying areas where they can improve operations and incorporate them into your presentation. Mystery shop their store. Review their website. Submit an online inquiry and evaluate their follow-up practices. Look at their online reviews. Determine the strength of their social media presence. When you call them, use your research and ideas to have something interesting to say. The dealership personnel will be more intrigued to see what you have to offer and how you can make them more successful.
Dealership consolidation will only continue to grow. The best way to fortify your business is to focus on your expansion opportunities, as well. At EFG Companies, we have over 36 years of experience servicing agents and dealerships across the U.S. With our industry insight and client engagement, our agent clients receive valuable tools, insights and strategies to face their unique challenges. Unleash your growth potential with EFG. Contact us today.