One of the best profit-change agents I’ve met in my 30-year auto-retail consulting career is Robert Pollock.
He has been general manager of various stores in several cities and has a strong record of ushering in improvements. I talked to him about how he does it. Here’s an edited version of our conversation.
Q: What’s the first thing that you address when turning around a dealership?
A: To properly diagnose what needs repaired or improved in order to move the business in the right direction.
A dealership is a fascinating business. You have several different businesses operating under one roof, and ideally working together to complement each other. Something we have all heard in the business is “people and process.” While this is absolutely true, we need to take a look at the existing people along with the processes currently in place.
Great people will find a way to improve a weak process. On the other hand if the people are weak, even with the best processes in place, the business will struggle.
An expert review of the financial statements will no doubt alert you to the most problematic areas to review first, however that may not give you all of the information needed to make the proper adjustments.
Q: What is something that usually has to change immediately?
A: Leadership in most cases has complete control over the business: process, structure, staffing, training, marketing, inventory control, cleanliness of facility, customer amenities, CSI, employee morale, teamwork and ultimately profitability. One thing I know for sure: It is impossible to have good CSI, without great employee satisfaction. Employees who like what they do and enjoy where they work always deliver a better experience for the customer and more profitability for the dealership.
Q: Do current employees cooperate?
A: Almost always. I believe deep down many dealership employees would like to get better, make more money and turn their job into a career. Unfortunately, they have not been exposed to the kind of leadership that will provide them with the necessary training and support for them to grow in their positions.
Then you will always have a select few that do just enough to get by, and are comfortable performing that way, because it was always acceptable in the past. Lastly, there are those who take advantage of the underperforming employees and use it to their own personal advantage. Sad, but true.
The right people and consistent training are absolute essentials. Training is hard work, time consuming and often expensive, but it is worth whatever it takes in the long run.
Q: Does the ownership team support your decisions?
A: Yes. While I don't think anyone can fix a dealership overnight, in most all cases the dealership didn’t break overnight. Action needs to be taken as soon as there is a game plan in place to address the biggest issues first, and this usually has to do with sales and CSI.
I don’t think I have ever seen a dealership with poor sales that had great CSI. Evidence of change occurs rather quickly, although it usually takes some time to reach the final goal. Since the business is definitely a momentum business, it is the goal of the leadership team to make sure to keep the momentum moving in the right direction. Evidence of this makes everyone feel better, from ownership to employees.
Q: What about marketing, is that early or late on your list?
A: If a dealership has a poor reputation, poor CSI, I would attack the marketing ASAP to let our customer base know the dealerships is under new ownership, management.
If the problem is process related and involving untrained staff, poor customer-service skills, product knowledge and the like, I would hold off on the marketing. There is no sense in advertising right away to attract customers, for us to display our poor customer handling skills.
Either way, having a clear, thought-out and consistent message is critical to the success of the dealership. All too often, dealership advertising takes on the flavor of the month variety and is ineffective.
Q: How does inventory management change?
A: Inventory turn and days’ supply are a big concern if the dealership has been underperforming in sales. Having the proper amount of inventory on hand is important, but so is having the right inventory. It is more important to focus on the fastest moving inventory, color, equipment, etc., instead of trying to inventory one of every color. If it doesn’t sell well, you don’t need it.
Q: What about past customers; do they usually come back?
A: Customers feel good about spending their hard-earned money at a business that is thriving, has great service and where they feel like a valued customer. This customer turns into a repeat customer. After all, that is what people who buy dealerships pay the blue-sky value for.
Q: Any other advice for someone trying to turn around a dealership?
A: Take a close look at the dealership staff. If prior management did little screening or put little effort into recruiting good people as employees, the situation calls for staff upgrading.
Remember this: The kind of people you will want to hire will not work long term with people who are not adopting the new philosophy of teamwork, process execution and dedication to service excellence that you expect of your team.
Q: If you had to name one thing that makes you good at turning around a dealership, what is it?
A: It is not much different that building a winning sports team. Recruit top talent, earn trust, demonstrate consistent and fair leadership, become an active member of the team itself and lead by example.
I make every person feel like the valued team member they are. Everyone must perform well to take any dealership to a higher level.
Adam Armbruster is a senior partner in the business growth firm Eckstein, Summers, Armbruster & Company located in Red Bank, NJ. He can be reached at 941-928-7192.