Are You the Ant or the Grasshopper?
By Saphura Long
As an automotive dealer, are you the best you ever wanted to be? Do you want to survive the millennium?
A friend recently made the following statement to me which prompted some serious reflection. He said, "Information is the currency of the new millennium." Actually, that statement is true today. But how much more emphasis and value will be put on information in the coming years? What will it cost you to really know your client base?
This is the information age. The world is rapidly changing around us, yet most dealers are happy with the status quo. The economy is good, and most are making money at a record pace. Hopefully, some of this profit is being put aside for the future. We all know that the automobile business runs in cycles that can swing rapidly in the other direction. Does anyone remember the late '80s? As we are cresting to the peak, we must stop to realize that the only view from the top is that of the valley around us. Let's hope that the valleys will not be too deep and the climb out not too arduous.
I believe that the classic analogy of the ant and the grasshopper describes a great number of today's dealer body. Most of us still operate by the seat of our pants. We believe that the only way to increase our sales is to advertise, advertise, advertise. There is no plan of action to take advantage of what this tremendous advertising budget brings us; hence, we spend and spend, broadcasting our advertisement further and further. But to what effect?
Surely, this kind of advertising brings in customers. Some customers do buy because of it. However, the majority of those who do not buy when they walk into the dealership, are never contacted properly and not remembered in the long-term. No one attempts to build a relationship with them. The grasshopper is content to do what is commonly referred to as "cherry picking."
The grasshopper doesn't want to waste his time developing a strong client base. He only wants the immediate sale. Instant gratification. There is no thought for the future, only the here and now. He "cherry picks" the customers who are going to buy no matter what and require little effort on the grasshopper's part.
The ant reaps just as many sales out of his advertising budget as the grasshopper. However, in contrast to the grasshopper, the ant carries on building a vast storeroom of his client base, both sold and unsold. He keeps himself in front of these clients via regular, consistent contact so that they remember him for future sales and service. And, when winter comes, he can go after the clients in a proactive way to enable himself for further sales.
Last week I attended a dealers' meeting. These dealers are all bright people with tremendous knowledge of automobile sales. However, only a handful of those present had any knowledge of their dealership demographics or type of clients they have. Few knew what cities or, specifically, zip codes contained the most clients. And similarly, only a few knew what kinds of used cars their clients are looking for.
The average dealer says that they know what used cars they should stock. They automatically assume the correct answer is those that are of their franchise makeup and those that are good, clean cars. Not necessarily so.
If you manage your client base well and build a strong database, then you might be surprised to learn that many prospects come to your dealership looking for used cars that have nothing to do with your franchise.
I have a client that carries Pontiac, Isuzu, and Hyundai franchises who regularly sees a large number of prospects looking for used Chevrolets at his dealership. The Chevrolet dealership is just up the street, so we wondered why the significant interest in Chevrolets at the non-Chevrolet dealer's site. After digging deeper under the surface, we realized that the Chevrolet dealer is a weak dealer. The dealership closes early each night, and is, in general, not aggressive in its sales approach.
The result is that the Pontiac Isuzu Hyundai Dealership, which is aggressive and stays open until 9:00 p.m., attracts prospects looking for used Chevrolets. But how does the dealer know this unless he is developing a detailed database which includes a prospect's make/model interest. Maybe this dealer should be stocking used Chevys. Wouldn't this information be helpful for the used car manager as he goes to auction?
Your client information base is like one of those "dot" pictures that children like to look at. You stare at it intently enough, and you see the picture. But if you haven't been the ant, if you haven't mined your clients regularly for information, you will never see an accurate picture. Instead of waiting for the "right" client to walk-in the door, why don't you find the best client for the cars you have on the lot?
Also, it is time that we as dealers understood the value of a comprehensive, clean client database. Many of the conglomerates are doing all they can to take control of your client base. Your dealer management systems are not the solution since they were not made for this purpose, nor are they user-friendly in search and retrieve, customized direct mail modules.
The strong dealer, acting as the ant, will obtain a comprehensive, user-friendly business development center with abilities to broadcast and receive email and the capability to interface with his dealer management system. This needs to be done as soon as possible, to start construction of the database. Strong databases don't happen overnight. They are like a delicate orchid that is constantly attended to, trimmed, and watered. They require daily effort. If the information in the database is not constantly massaged by adding expanded information or deleting outdated material, the database becomes nothing more than a dinosaur, big and cumbersome.
Become like the ant; never allow a prospect to go by without gathering information on him. Make this process a mandate to all your managers and salespeople, and then stick to it. Starting the process when you actually need it is too late. Remember what happened to the grasshopper. He starved in winter because he had not saved in the summer.
And finally, don't let the process of creating a database daunt you. There's no time like the present. Think of the stock market. Every day you put off investing in those returns means money lost. No matter its ups and downs, the market still continues to climb.
Good luck as you adventure to learn about your clients and reap the rewards that knowing your clients will provide.
Saphura Long is President of Prize, Corp., a company that provides business development solutions for auto dealers. As a dealerŐs wife, Ms. Long began to design her husbandŐs early F&I programs in the mid 1980s. Since then, she has developed a comprehensive business development product called ReckonUp which manages a dealerŐs client base from prospect follow-up through client retention, service and direct mail. ReckonUp is a national product currently being used by some of the most influential movers in the automobile industry. slong@dealeronline.com
