Over the past 12 months or so, the main issue for dealerships has been how to find the right talent. From service advisors to F&I, finding the right people has been a challenge across the board.
But with changing market conditions comes a shift in focus, and now the question is: What can dealers do to protect their businesses and retain their staff in uncertain times? Here are four things you can do to navigate change in your dealership.
Protect your customer base. Your customer base is fundamental to success in an uncertain market. Loyal customers come for regular service, come back to buy again and refer other customers. If the market–and the economy–is a little choppy, use the opportunity to develop or reinforce your relationship with your customers.
Successful dealerships changed how they engaged with their customers during the pandemic and won their loyalty. The actions which got them there varied, but the common thread was a strong positive organizational culture that supported new ideas. ' 'Employees will innovate when they understand the goal, know what's expected, and feel supported.
If you want to protect your customer base and increase customer satisfaction and profit, focus on how to define, communicate and operationalize your culture. 'Don't believe me? 'There's a 6-year, peer-reviewed study of 95 dealerships that found a causal relationship between culture and performance. Build a reputation as the dealership that employees and customers want to work with, and the rewards will follow.
Keep the pay plan consistent. There is a temptation to change the pay plan whenever there is uncertainty in the market in order to protect profit. However, there is no better way to breed culture toxicity and mistrust than to change the pay plan when the market shifts. Instead, operate within the current plan and communicate overall results regularly. Make sure that everyone–sales and service–understands exactly what the goal is and how to achieve it.
This links back to how you can operationalize[Jim? Haven't seen this before] your culture: through regular, clear communication and engagement with the team. Get a handle on 'what's working and 'what's not and look at what behaviors need to change. If the current pay plan 'isn't aligned with the behaviors you need to achieve the goals for the dealership, then tweak it with targeted incentives. And never, ever, cut the pay plan if you're exceeding targets. Your best talent lives for the win. Cap the opportunity and 'they'll walk. Every time.
Communicate early and often. This is especially important when there is uncertainty or a downturn in the market. Employees are more likely to start looking for a new job if they feel the job they have is at risk. Meeting regularly with your sales and service teams to communicate results, issues, opportunities and goals achieves three things: it prevents people from exaggerating the size of the problem in their minds, it shows you are proactively managing operations, and it keeps everyone focused on what needs to be done, individually and collectively, to weather the storm. A short meeting every day (15 minutes usually is plenty of time to address daily action items) and then an operations meeting once a week is most effective. The weekly meeting is where you will ask for feedback from the team on what's working and what's not, so you can address risks before they become issues.
Hold people accountable. In an industry known for grind culture, where the top employee complaint is the long working hours, it seems contradictory to let non-performers languish. And yet it happens. Sometimes management believes people will turn themselves around, or having them in the dealership (even if 'they're not performing) is better than an empty desk.
However, non-performing salespeople kill both performance and culture. Instead, hold people accountable. Not for results directly but for the daily actions and behaviors that deliver results. Do this through metrics, regular reporting and values-based conversations that address behaviors that are not aligned with your culture. We recommend meeting every quarter for a dedicated discussion on performance that includes future development goals and aspirations. Lastly, creating a culture of accountability starts with leadership. Model the behaviors you want to see from the team and your people will follow.
Ultimately, communicating openly with your team, holding them accountable toward your high-performance standards, paying them appropriately and ensuring you have a steady stream of happy returning customers are critical to keeping your top performers connected and engaged in your dealership. Stay the course–repeat the behaviors that work – and 'you'll be better prepared to manage the ongoing uncertainty in your industry.
Jen 'L'Estrange (pictured, above left) is founder and managing director of Red Clover, an outsource human resources firm.
