The Profit Promise 2015
An automotive retail development company.
Convergent Alliance, Automotive retail development company, dealership remodel, dealership assembly, dealership profits, dealership software, automotive industry, dealership construction
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The Profit Promise 2015

  |   Business



Happy New Year!. As promised we are kicking off the New Year with our January newsletter. In this issue let’s talk about resolutions a bit. I just looked it up on Internet, 93% of New Year’s resolutions fail. Shocking isn’t it? Well, perhaps not, here are the three main reasons why they fail:

  1. People make unrealistic resolutions
  2. Their head and heart is not in sync
  3. They use guilt or fear as motivation

In our business as well, we make resolutions to improve whatever it is that we want to improve. While there are many other factors that lead to failure of meeting goals and objectives, these top three would be a good litmus test to do a self check.
I will get back to the subject in a moment. But for now I would like to evaluate some primary areas of focus in Auto Industry within the past three decades.



American auto industry has gone through some terrible product quality problems during the 70’s to the extent that factory workers would deliberately leave soda cans inside door panels to create rattles. Japanese auto industry on the other hand has been relentlessly improving after the second WW and had risen to become world’s third largest economy by the end of 50’s. Their goal now was to take over the American automotive markets and give domestic auto makers a run for their life.

During the 80’s huge quality awareness had to be created in America to compete with the Japanese. Ford Motor Company even launched a campaign called “Quality Job One”. And so they did. By the end of the decade there were no bad cars. That prerequisite has never left the sight of the auto makers if they wanted to stay in business. Those who did not are no longer in business.

2.  1990’s FOCUSED ON CUSTOMER TREATMENT:In the ‘90’s, a gentleman by the name of J.D. Power solicited a new awareness. At the time you could pretty much throw people to the curb if they did not want to buy a car from you. People got tired of it. Mr. Power suggested that customer treatment had to be measured and retailers had to be held accountable for treating people right. A Nationwide campaign mandated that. Now, building good cars were no longer enough by itself, you needed to treat your customers like gold as well. In a matter of decade you could no longer survive as a new car retailer if you did not meet those standards to the extent that you could even lose your franchise or not be awarded another one if you applied for it. Those retailers who did not meet these standards are no longer around.
3.  2000’s FOCUSED ON FACILITIES AND TECHNOLOGY:During the ‘00’s, building good cars and satisfying customers has become elementary. Now retailers were faced with a new set of challenges. Manufacturers came up with state of the art facility requirements that included all the bells and whistles and toys to impress customers. During new franchise assignments or buy-sells they leveraged improving retailer facilities and technology as a part the approval requirements. If you look around today, you see a lot of beautiful car dealerships everywhere. Of course consumers got used to it pretty quickly. Now building good cars, satisfying customers and having state of the art facilities were all required in order to remain competitive in the retail market.
4.  2010’s FOCUSED ON PEOPLE SKILLS AND PROCESS:We have a new set of challenges going forward. Satisfying customers in the old fashioned way of giving it like a pill just to manipulate high CSI scores is not going to work. Now we need real people skills and interpersonal skills which provide good customer treatment naturally and not robotically. We call it Autonomy, the ability to do the right thing without being told.Secondly, every area in an auto dealership, particularly the customer touch points require an off the charts process. If I may mention one that would of course be the “SALES PROCESS”. The old fashioned way of undermining customers and coercing them into doing something that they really don’t want to do is not working. It is time we bring real relationship psychology into the mix and start training and developing our staff accordingly. If you recall I started my letter with new years’ resolutions and why they failed at a rate of 93%. I am sure most of your resolutions involve selling more, servicing more, cutting expenses, improving CSI and finally improving the bottom line. I suggest if you want to stay outside of the 93% pay attention to people skills and process.
Wish you all the best in 2015, I will be attending NADA. For those of you who would want to contact me please send me an e-mail and I will gladly accommodate your schedules. For more information visit our website Talk to you next month.Regards,Arlan
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