ScottJoseph
leadership solution
how to plan an effective and sustainable growth strategy for 2013 If you’re still working on your growth strategy for 2013 — or if you’re continuously looking for ways to improve it — here are a few things to consider. In order to achieve the end result you’re seeking, you must stay focused on what you’re trying to achieve. It’s important to keep in mind, however, that increasing your showroom traffic and boosting your closing ratio with Internet leads are not end results. They’re examples of goals you will achieve when you accomplish something much greater. So, when planning your dealership’s strategy for growth, start with the big stuff. The reality is, there are only three ways to grow your dealership — or any business, for that matter. Begin with those: 1. Increase your number of active customers 2. Increase your average profit per transaction 3. Increase your customers’ repurchase frequency More Customers
When going after more customers, dealerships often make the mistake of spending the lion’s share of their resources on new customers — without realizing that their best conquest opportunities are their previous customers. By working to improve retention, you improve your chance of future purchases to replace a customer’s current vehicle. But you also have the chance to increase driveway share when that same customer goes to buy a second or third vehicle for their spouse or child. And,
52
autosuccessonline.com
because you already have a relationship established with previous customers, you’ll be able to close a higher percentage of deals with less negotiation. More Profit Per Transaction
Improving customer retention doesn’t just increase the number of your active customers; it also increases your average profit per transaction. How is that? It’s a proven fact that previous customers are willing to pay more and negotiate less. So when you retain more customers, you attain more profits. More Frequent Sales
Not only do you want more customers, you want those customers purchasing more often. One way to accomplish that is to increase driveway share, which was addressed above. But just as important is to get customers to buy from you sooner than they normally would, because over the course of a year, that adds up to a significant difference in units sold. Don’t overlook the service drive, though. You’ll want a strategy to drive customers there, too. Not only for the service revenue, but because an active service customer is much more likely to buy a car from a dealership than a non-active one. Consultants Versus Vendors
As you decide where to focus your resources in 2013 for an effective and sustainable growth strategy, there are some questions you should ask yourself when choosing which vendors to partner with and which products to incorporate. Actually, these are questions you should ask whenever you’re considering a new vendor — or reconsidering an existing partnership. • Which vendors best align with your growth strategy? • Which vendors offer solutions that will work with your systems and staff to achieve your goals? • Which vendors approach your business as true partners — acting as consultants instead of simply providers of products? Ideally, you’ve developed an aggressive and highly integrated growth strategy that incorporates proven solutions with vendors who serve as consultants, working with you under a sustainable plan that spans the entire year and effectively grows your dealership. If, after reading this article, you have any questions about developing a sustainable growth strategy for your dealership, please contact me for a free consultation. Scott Joseph is the president of J&L Marketing, Inc. He can be contacted at 888.835.1689, or by e-mail at sjoseph@autosuccessonline.com.