COVID Groundhog Day

It’s March 15, 2020 and you get to do it over. What would you do differently? What did you learn about yourself, your leadership team, your employees, your business partners, and vendors?

When I was tasked to write this article/blog I reached out to a few of my dealers to get their reaction, and here are a few of their thoughts:

Some might not have been possible for you to do; however, if you think outside the box maybe you could have implemented some of these ideas! This list has not gone away; we just are getting better at each and every one and continuing to adapt.

1. Do Not Panic.

2. Do not reduce staff to the extent we did, do not cut hours, do not split shifts. In the long run, it just cost a lot of business.

3. Take advantage of the opportunity to get the correct team and remove the dead weight.

4. Communicate with your staff, letting them know it will be business as usual with all the safety precautions in place.

5. Manage inventories better, do not panic, buy more inventory when the correct time arrives, and do not be fearful.

6. When/if someone gets exposed to COVID do not close the dealership. Close that area, communicate with your people and have the area cleaned and disinfected. Be completely open – do not hide anything. Employees need to feel safe.

7. React quickly to the ever-changing rules and do our business, accordingly; do not stop doing business unless state-mandated.

8. Communicate daily with your staff/accountability. This is now more important than ever.

9. Post on social media things you are doing to keep your employees and customers safe.

10. Data-mine your customers to inform them you are still open for business and what they can expect when they arrive at your dealership.

11. Cash is king: keep all accounts receivable current, contracts in transit to under three days, e-contracting when possible.

Things we learned during COVID:

1. We could make a lot of money on the front end of new vehicles.

2. How to do a complete transaction remotely and make good gross doing it.

3. How to do a better job setting appointments and being ready for the client when they showed up.

4. We made more money on each service per repair order because we had time to communicate with the customer and mechanics did a better MPI because there were fewer vehicles to look at, so all in all the customers received much better service from us and were willing to pay for that!

5. We learned there really was no “used car market” – the vehicle was worth what you thought you could sell it for because of lack of supply. The key will be how we adapt out of that when inventory levels recover.

6. We learned who our “star employees” were. We learned we could ask more from them and they happily stepped up to the plate and were willing to learn new tasks.

This was a quote from one of my dealers that I wanted to share because I thought it was very relevant:

“I guess what I learned the most is something I already knew: We were able to step up and take care of our people financially at a time when there was a lot of uncertainty. The amount of loyalty created through the times of uncertainty has paid off tremendously as we have worked through the pandemic. Our turnover is low, our morale is good, and our business has rebounded substantially from the April lows.”

Things I learned from my dealers during COVID/some of my dealers’ best practices:

1. Dealers and their staffs are the most resilient people out there. Despite COVID, the lack of inventory, the lower SAAR, high unemployment, government mandates, the pandemic itself, many have enjoyed RECORD PROFITS! Trust me, on April 1, no one thought this would be possible!

2. I had dealers that laid very few people off and maintained the same hours (even though the competition cut hours and staff), and these dealers experienced greater profits and increased market shares.

3. One of my dealers in Pennsylvania (that could not sell a car for any reason until April 24) did not lay one person off, paid people to stay home and when they could sell vehicles again all of his employees were ready to come back and get to work. In fact, despite not being able to sell cars for most of the month of April, they enjoyed a net profit for April and are experiencing a record year! Right now, year to date this dealer is enjoying 52.3% net to gross, and 8.5% net to sale! What a team of players he has!

4. I learned non-luxury brands, single-point dealerships could net over $1,000,000 per month (with no PPP monies) from all over the country and for multiple months in a row.