THERE'S THE STORY OF A MAN WHO IS ON HIS hands and knees frantically searching for a lost object under a street light on an otherwise darkened street.
A passerby asks, "What are you looking for?"
The man replies, "I dropped my key ring containing the keys to my house, my shop and the strongbox where I store all my valuable papers"
"Where did you drop them?" asks the passerby.
"Over there," says the man, pointing to a dark section down the street.
"If you lost your keys over there, why are you looking over here?" says the passerby.
"Because the light is here!" says the hapless searcher.
There's a message in that for a lot of dealers.
Owning and operating a new car dealership presents many situations and potential problems.
Dealers must make the important decision in a multi-purpose building of how much space is allocated for each department.
To deprive high-profit departments of needed space in favor of ego-building glitzy showrooms may be seriously counterproductive unless justified by additional franchises.
Manufacturer representatives' priorities are dramatically obvious and single-minded. That's to sell new vehicles, profit margins not-withstanding.
They may honestly profess an interest in service, parts and used-car sales. However, new car sales numbers are the holy grail to them.
Bottom line profitability does not win factory sales campaigns with their attendant exotic trips. Some of the most enjoyable travel I have experienced was hosted by GM for sales numbers in months when the dealership, all things considered, lost its shirt.
I remember a couple of fellow dealers who won all the sales campaign trips - and ultimately ended up bankrupt.
Searching for bottom-line profit is the dealer's sole responsibility. The factory may display an interest in dealer profits, however it's perfunctory at best because new-car sales numbers are what new-car manufacturers are all about.
I've known dealers who were singled out for censure because the factory believed they were making too much overall profit at the cost of alleged sub-standard sales.
Some methods of utilizing new-car dealership facilities may not win popularity contests with factory personnel. There was a period when arrogant and misinformed domestic new car manufacturers would go ballistic if dealers added import product lines to their operations.
During the energy crunch of the 1970's this was an important and courageous decision for domestic dealers who were burdened with full-sized cars (identified as "gas guzzlers").
However, aided by state and federal franchise protection laws, many of these dealers saved their businesses from bankruptcy by signing on with Toyota, Datsun, Honda and similar automakers who were already tuned in to fuel-efficient wproducts while Detroit struggled to market competitive cars and trucks.
Signing with an import manufacturer (Japanese or German) was not a public relations coup during that period. Negative memories of World War II lingered still in U.S consumers' minds.
Unlike the man on the dark street who searched only where it was convenient and easy, these dealers made the hard decision to search where the answers lay to their problem of incompatible product lines.
New-car dealers have traditionally been slow to embrace new ways to market new products. Leasing and rental by individual dealers was slow coming into the retail market place.
A majority of dealers could not search in the dark area of the street for it was easier to follow the old established marketing ways, no matter that Detroit was removing gross profit opportunities from new-vehicle sales.
Marketing experience in the retail automobile business is often measured by a number of years spent doing wrong things over and over.
Dealers who belong to 20 Groups or attend workshops at NADA conventions are more apt to attempt to break from old habits and look for answers in the dark areas where it's harder to find something but there's something to find.
Twenty Group information is shared by fellow dealers who have already pioneered the new methods. Hence, the risks of failure are reduced.
Factory/dealer relations have improved significantly in the past decade.
Dealer needs are finally being addressed. There was a long period when dealer groups were reluctant to adequately represent their members' needs, and remained under the street light in search of solutions that weren't necessarily there.
Many dealers still look for quick and easy fixes to all phases of their dealerships. Unfortunately, they're looking in the wrong places.
A perfect example is putting a new sales person on the showroom floor without adequate training. It may seem easier and less time-consuming to do that. But it won't produce many results.
Nat Shulman was owner of Best Chevrolet in Hingham, MA for many years.