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How to Have a Record Profit Year with SAAR Down

Lycia Jedlicki
Written By: Lycia Jedlicki
Posted on March 19, 2020

It’s no mystery to dealers that the seasonally adjusted annual rate (SAAR) is slightly down to start the year. As recently discussed by Cox Automotive, “February – like January before it – is known to be a weak month for vehicle sales, and this year should be no different.” However, the SAAR shouldn’t stop your dealership from achieving more. Believe it or not, I had multiple dealerships in various 20 Groups with record years when the SAAR was down. It did not matter which franchise or location of the country; they were achieving more than they ever had before. When I present this to automotive professionals, I am often asked “How could that happen with expenses rising and the SAAR declining?” It happened because they trained and developed the right people for their team.

I promise you one thing—there is plenty of business. If you want 2020 to be a record year, you must have the right team in your building. The common weakness in all of the dealerships that I visit is the lack of personnel, regardless of market or size of the store. To properly address this issue, you need to focus on analyzing if you have enough team members to drive the results you want.

Four Areas Management Should Address:

1. Your People: 

Do you have the right people in the right places to take your team to the next level? Your management team should consistently review their hiring processes to find areas of improvement. Would you hire the same person to run the department today that you hired previously? If not, how can you make a better decision next time? With turnover continuing to plague dealerships, having an effective talent evaluation strategy is imperative when acquiring the best available talent. 

2. Your Vision: 

Does your team know your vision and what role they play in making it a reality? Unfortunately, many employees don’t understand their role in the larger organization, or even what their organization is trying to achieve. Do you have a plan for tracking progress to ensure that everyone is headed in the right direction? Can your employees see their progress? Do they understand why they should be motivated to achieve their specific goal? When everyone is pulling their weight, you would be surprised how much gets done. 

3. Your Training: 

Do you have training programs in place for your employees that encourage self-improvement and promote team development? While you probably have uptraining in place for your new hires, many dealerships fail to offer continuing education opportunities that keep employees engaged in their work. Make sure your team is always striving to improve and offer them training opportunities that not only help them grow but can produce positive ROI for your business. 

4. Your Benefits: 

Are you willing to pay to attract the talent that you desire and offer a competitive benefit package? If not, what is it costing you to have the wrong talent? The days of one-pay-plan-for-all does not exist for sales or service in the current market. Some people want less pay, and more time off. Some people may not want to work on a commission structure. Does this make them a bad employee? NO! We need to adapt to give them a pay plan that works for both for them and for you, which may mean offering a couple of different pay plans. Does this mean we need to net less money? NO! It means we have to structure something that works for all parties. It means having an open mind.

Get the Results You Want This Year

Albert Einstein said, “the definition of insanity is trying the same thing over and over again and expecting different results." This applies to your dealership. If you think you are going to net more money (or even the same money) with the same people, the same pay plans, and the same processes as last year, it’s not going to happen. I hate to be the bearer of bad news but whenever someone’s numbers have really improved, it’s because they made changes. In our industry, it’s unrealistic to expect that anyone’s numbers will increase significantly without implementing different pay plans or introducing new people to the organization.

So, the big question is, do you have the right team going into this year? If not, what are you going to do about it? What happens next is in your hands. There’s plenty of business in your market, but it’s up to you to take it!

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