Great Management and Great Leadership
This coming year will be a sad year for many car dealerships, so I’m writing this article to offer hope and encouragement, and maybe it will help save at least one from despair. But before I continue, let it be known that I am a very optimistic, positive, “glass is half-full” kind of guy. To me, adversity is nothing more than an opportunity for growth, and without challenges no one would develop perseverance. Now, I’m not saying that I like adversity or being challenged all the time, but lately it seems the world I’m living in serves up more and more of it everyday.
Managing The Dealership
Every dealership needs to start by looking at the way they are managed. Thousands of dealers have operated with blinders on for too many years. This mentality avoids true management of people and their processes, and has no chance against the Godzilla-sized problems facing every dealer in the country right now.
First, ask yourself, “Whose hands are on the wheel?” I’ve been in far too many dealerships that have a really great Salesman working as a Manager. NEWS FLASH: An excellent Sales Person does not equal an excellent Manager! The best Manager might not be able to sell their way out of a wet paper bag and that’s ok! Maybe this challenges your way of thinking about management, but that’s ok too…you reserve the right to change your mind when given new ideas.
Consider this. Right now, as you read this article, Managers are making big decisions. Hiring and firing decisions, vendor decisions (who to keep, who to cut, who to add), advertising and marketing decisions, decisions on what to buy at auctions and pricing used inventory, decisions on how to process incoming internet leads, website decisions, decisions on training and education initiatives and so on and so on.
Poor Managers make the above BIG decisions based on instinct alone, which is a display of ignorance. Ignorance is not only unacceptable, it represents a coffin nail that every dealer should avoid at all cost. A bad Manager has no idea what his or her employees are truly capable of and how to motivate them. When a Manager only evaluates sales people based how many vehicles they sell, they fail to identify the reasons why they sold that number of vehicles. If you don’t know why Johnny-Sales-Guy only sold five cars this month, you are a bad Manager.
Bad Managers don’t recognize, or even see the need, for tools that track sales efforts; they don’t know how to determine the value of their vendors; they don’t understand what advertising and marketing choices return the best results; they don’t know what their ratio is between their showroom traffic and their internet traffic; they don’t know what makes a good website (or even know why their website exists); they don’t know when they need training; and they don’t know how to hold trained employees accountable. Managers such as these have no right to be managing in today’s dealership.
Great Managers, of course, do all of the above well because their experience, knowledge, abilities and talents match the needs of the position. They know the strengths and weaknesses of those he or she manages and they will position their employees to play to their strengths, NOT their weaknesses. A great Manager knows what days showroom traffic is at its peak and cross-trains sales people for traditional showroom sales as well as internet sales. A great Manager tracks sales people’s response times, follow-up discipline, appointment setting ratio, closing ratio and uses metrics to help the dealership thrive not just survive.
Again, good management is a dilemma for many dealerships because so many stores are being managed by people whose greatest strength is not managing.
Helpful Hints and Encouragement
- Choosing to keep an employee should be based on the fact that their abilities, strengths and talents match your needs and that they are well utilized to make your business successful. Establish an employee rating scale (i.e. “Outstanding,” “Exceeds Expectations,” “Meets Expectations” and “Needs Improvement”), then MANAGE your staff toward success or out of your dealership.
- Keep and/or add vendors that increase sales conversion. Now more than ever, vendor choices need to be based on ROI. A good vendor will stand behind their product or service by not forcing long term contracts. Having the best tools available is useless if there is no proven process for them.
- Make cuts in places like newspaper, television and radio. If you spend more than $5k a month in any of these areas, separately or combined, sharpen your axe and start swinging it!
- Manage your processes or you will make bad decisions. If you don’t know how to effectively communicate with your customers (especially online), you will not be able to identify good leads vs. bad leads. You won’t know why one CRM tool fits your business needs vs. another. Solid processes give you critical management tools like visibility, accountability and responsibility.
- If you are the Dealer/Owner/DP, do some self-examination related to your leadership skills and abilities. If you aren’t the one casting the vision for how the business moves forward, who is? A leader must exist. Here’s a video that includes 13 great leadership rules.
Properly managing your people and processes is one of the biggest keys to your dealership’s success. Just signing-up for the latest and greatest product or service will do nothing to help you if the wrong people work for you or if you have the right people in the wrong roles. There will be amazing success stories in 2009, but they will all have two things in common, great management and great leadership.