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The Importance of Employee, Vendor, and Dealer Loyalty

Joe Basil
Written By: Joe Basil
Posted on May 14, 2020

Having worked in the car business for many decades, I have seen a lot. While I have been there for dealers during the good times, I have also been by their sides through many industry downturns. From parts strikes, production strikes, oil embargoes, and the 21.5% prime rate, to the 2008 financial crash and the current unprecedented coronavirus pandemic. COVID-19 has already shut down large portions of world economies, and the necessary stay-at-home initiatives will result in significant changes to personal relationships, and society’s behavior as a whole, moving forward.

How Dealers Responded

From a retail automotive perspective, the initial shock of business coming to a halt was traumatic. Once the shock passed, dealers got refocused and started developing recovery plans. Suddenly, that sense of shock was replaced with a relative sense of relief. No matter what crisis hits your dealership, it always creates new opportunities. Don’t waste the opportunity! In the crisis we face today, the downtime has given dealer-operators and management teams more time to focus working on their business as opposed to being dominated by working in their business.

Vendor Evaluation

During this hiatus, dealer-operators should review how vendors and employees responded to the crisis. In particular, did they step up and do what they could to support dealership operations? Some vendors stepped up right out of the box and offered concessions, while other vendors delayed decisions or offered no concessions at all.

Employee Evaluation

It’s also important dealers evaluate their own workforce. When announcing their layoff or furlough plans, some employees accept the reality and gravity of the situation, and subsequently understood that the dealer has to do what they have to do to have their business survive the crisis. Unfortunately, not all employees react this way. These reactions can give you an indication of who you want to bring back. Most employees don't like the consequences of the pandemic, and that is understandable. However, the employees that truly understand, know that these tough business decisions are necessary to survive the crisis.

Dealer Evaluation

From the dealer perspective, you probably already have an indication as to the level of support and loyalty you have from your vendors and employees. That doesn’t mean that your dealership isn’t also being evaluated by employees and vendors!

For employees, as dealers announced their furlough or layoff plans, team members will gain a lasting impression of their employer by noting how the business supported employees through this crisis. Did employees have the opportunity to gain insight into their employer’s level of loyalty? Some dealerships just laid people off with no level of support at all, while forward-thinking dealers knew that payroll would cost them some money in the short run but was a cheap price to pay for retaining a good team. For these dealers, the pros far outweighed the costs. Dealers like these will benefit in the long run, making a statement about their personal brand and priorities, like employee loyalty, during a crisis. Their decisions during hardship will also be noticed and remembered by many potential employees, making their business most likely to attract suitable candidates who value their brand and culture.

Loyalty Matters Most in Troubling Times

One outcome of the COVID-19 pandemic is the reconciliation of loyalty levels between vendors, dealers, and their employees. Operators who approached the situation by investing in their team know this is an investment in their long-term brand image. I realize that every dealership is different, and not every market has been hit as hard as others, but I encourage you to think about all the factors in play when it comes to your level of support. What are your long-term brand image, employee retention, and vendor relationships worth to you?

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