We are experiencing things in the automobile business today that we have never seen before. The behavior of dealerships through the pandemic has been very enlightening. When the pandemic first began, panic in the dealer body set in. The fear of loss was astounding, and our company received a plethora of calls from dealers stating that they needed to change the way they sold cars. The dealers were telling us that they needed to learn to sell cars via the internet and wanted us to develop a system for doing that. This is not a new concept, but the fact that in the absence of an event, human behavior is slow to change was on full display.
We did see a willingness to do whatever it took to sell a car, such as taking vehicles to customers and hand delivering paperwork for them to sign.
We did find it amusing that for years, many dealers told customers that they could not take the paperwork to them for signing, in fact many told them it was illegal. That is not true of course, and when the pandemic occurred, if a customer wanted the paperwork delivered, dealers were more than accommodating.
As the pandemic continued, and PPP money was made available and dealerships were considered an “essential” business, a calm seemed to set in. Some things have changed, for instance, we never heard a customer say do I need to make an appointment to buy a car before the pandemic, but we hear it very often today. Sales calls in general have been on an increase for years, as customers became more disillusioned with the dealership internet process, however the pandemic has put sales calls on steroids. We have seen a large increase in sales calls.
A byproduct of the pandemic has been the chip shortage. Like the pandemic, the chip shortage created a bit of a panic as well in the dealer body. However, basic supply-and-demand economics has taken over and average gross profits are higher than we have ever seen. Therefore, dealership profits and employee incomes are at an all time high.
This brings us to habits. Are we creating good habits or bad habits?
As stated, human beings need a reason and/or event to change behavior. If current income and profits is the only measuring stick, then changing behavior, or training and monitoring good habits is not necessary. This will not always be the case.
The basic steps of the sales have not changed much over the years, but in the past they were an important part in the end result of selling an automobile and the profit associated with that sale. Today, that is not happening. When customers call a dealership and ask “Are you charging over sticker or just MSRP for the new vehicles?” shortcuts in the selling process are bound to occur. Any salesperson in the business for less than a year, has had no reason to develop negotiating skills, let alone how to do a proper needs assessment. It has become a take or leave it situation. Whether the customer first meets a salesperson on the lot, via the internet, or on a sales call, we are seeing a reduced amount of technique as it would relate to selling skills.
As an industry, this can be very dangerous if we are not monitoring, training, and preparing for the not too distant future. The pandemic seems to be on the downturn, and the chip shortage will eventually subside. How fast manufacturers are able to ramp up production will determine when the old environment returns to our industry. Certain manufacturers have stated that they intend to keep production limited, but I would not count on that. The minute an OEM sees their profits decrease and realize they can produce more vehicles to counter the decline in profits, then we will see a return to past production levels.
So, we all need to ask ourselves, is our current behavior conducive to success when the business returns to normal?
For most of us, if we are honest, the answer is no. What are we doing to prepare for the future? Are we training sales and phone techniques? In fact, do we really know what good training is? That is a topic for another day, but the time is now to consider making changes to start developing good habits today to insure success in the months and years ahead.