We have had some much-needed good news for dealership productivity over the past few weeks. Parts of the United States are opening to nearly full capacity. The number of unemployed workers declined a bit as businesses brought back furloughed staff or hired new team members. And, vehicle sales picked up in May, averaging 12.2 million vehicles on an annualized basis, according to Autodata. While no one is popping any celebratory champagne corks, the positive headlines are a balm to our bruised economy.
However, the COVID-19 pandemic remains a real threat. Hot spots continue to flare, sending record numbers of people to the hospital. A large percentage of Americans are still hesitant to visit businesses in person, instead relying on the online platforms that have sustained their lives since mid-March. As a retail auto dealer, how do you maximize your opportunities to sell vehicles?
Digital options pay off in productivity
Since we have all been forced to rely on our online tools during the shutdown, more sales are taking place on digital platforms. A recent Cox Automotive survey found that over half of consumers plan to complete at least some portion of their purchase online. Dealers are encouraging customers to use online shopping tools, including online chat, virtual test drives, trade-in valuation, and financing calculators. However, simply providing online tools is not enough to differentiate your dealership from the competition for today’s consumers.
Contributing Author: Steve Roennau Vice President EFG Companies
Those of us who are active on social media likely have created an “avatar” – an image designed to represent ourselves digitally. Defined specifically in computing language, an avatar is the graphical representation of the user or the user’s alter ego or character. The avatar image says, “This is the image I want to project,” but it might be less than accurate.
Even the person actually walking into your dealership might not be who they say they are – even if they have legitimate data, like a valid social security number tied to a legitimate address, to support their claim.
Synthetic fraud is the fastest growing form of identity theft in the U.S., comprising 80% of all new account fraud. The fraudulent tactic uses a combination of real and fake personally identifiable information (PII) to create new credit profiles and pump up credit scores, allowing the criminal to access goods and services.
The most common method of synthetic fraud is professional criminals using a variety of methods to make money exploiting the systemic weaknesses of the U.S. credit system. It may involve theft of a child’s real identity and applying for an employer identification number (EIN). Then, the criminal builds a synthetic credit profile with the victim’s real name, social security number, and date of birth (DOB), with a different address or phone number. Next, the professional criminal applies for credit through mortgage refinancing or a car loan, which pulls the report from all three major U.S. credit bureaus (Experian, Equifax and TransUnion). While the application may be denied, the process of reviewing the application creates a new credit profile at all three bureaus (also known as “tri-merging”) with the synthetic information. A few more steps and the fraudulent profile is complete, including lines of credit, employment history, mail received, etc. And now that criminal looks legitimate on paper.
With synthetic fraud, everything may seem legitimate at first blush. For the dealer, they move a car off the lot. For the lender, they have a loan in good standing. Unfortunately, the person who was originally assigned the particular social security number has no knowledge of the loan, and may never find out until the loan defaults or fraud is uncovered.
Chances are, you ended the third quarter in fairly positive territory. The majority of OEMs showed positive sales growth. The Federal Reserve cut interest rates a quarter point. Hiring remained strong in the majority of the US and the consumer optimism index is still high. Looks like it’s going to be a good Christmas!
Just like in the movie, Christmas Vacation, you can’t have good news without the bad. The political climate continues to make headlines. Tariffs remain in place, impacting both parts suppliers and OEMs. A battle over fuel efficiency is brewing in many state legislatures. And, the competition for good employees is stronger than ever.
As a dealership owner looking to thrive in the months ahead, what should you do? Focus on what’s in your control and invest in your best assets – your people.
Your people are your best assets. It’s an old adage but it’s true! Even with the move to more digital engagement, people are still critical to the retail automotive process. Keep it simple. Focus on the two tenets of staffing your dealership: hiring and retention.
Hiring
Dave Gibbs Training Manager EFG Companies
When it comes to hiring, there was a nugget of good news in the recent Cox Automotive 2019 Dealership Staffing Study. The study found that generations are showing higher levels of interest in working at a dealership, specifically:
32% of Generation Z workers
36% of younger Millennials
This interest is nearly 10 percentage points higher than interest shown by older Millennials in their late 30s and early 40s (21%) and Gen Xers in their 40s and 50s (19%).
But these new employees will not be satisfied with a dead-end job and no opportunity for cross training or advancement. Make sure you understand that to retain these younger employees, they require feedback, opportunities for growth, and a management structure that fosters innovation. They’re not worker bees. They want to take an active role in their careers and your dealership. Give these new assets the training that supports their energy!
Retention
While you’re focused on hiring bright, shiny new employees, don’t forget about the great staff you already have in place. Keep your current team member assets engaged and invested by removing barriers for success.
Do you have a Top Performing salesperson who would like to become an F&I manager? Great! They already know your business. Now they just need the tools to grow and work even harder for you! Send them through both F&I and compliance training so that when they start work in F&I, they’ll sell your consumer protection products the right way, increasing both your margins and dealership compliance, not to mention customer satisfaction!
Do you have a service technician with excellent customer rapport? Fantastic! Give them a path to becoming a service manager and equip them with the right training for success. Will you have to back-fill those jobs? Possibly, but your new hires will see there is room for growth and your newly advanced employees who have experienced your commitment to their success will be more likely to stay.
There are lots of things swirling around in the world that could impact all industries. However, many of them are out of your control. What happens inside the walls of your dealership is in your control. And, investing in the people who share the space with you will help you thrive, not just survive. It’s a tried and true recipe for success.
With more than 40 years of experience helping dealers achieve their profitability goals, EFG Companies knows how to recruit and train your team into Top Performers. Contact us today to get started.
