In this blog post:
It was Malcolm Gladwell who wrote 10,000 hours is “the magic number of greatness.”
I was thinking about Gladwell’s book, Outliers, and wondered where my experience in the auto industry stacked up to his idea of an expert. Much to my surprise, earlier this year I had reached 10,000 hours of working one-on-one with dealerships. I don’t consider myself a guru or an expert by any means, but my recent discovery does hold some weight to it.
I started sifting through all of the dealerships and GM’s I’ve worked with, some have come and gone, and some have been with me from the beginning. Since Authntk doesn’t discriminate against size or location, the diversity of dealerships is what really struck me – one rooftop or ten, Europe or US, tech savvy or behind-the-times, I was (and still am) your man.
Given the array of dealers, what I really wanted to know was what, if anything, do they all have in common? Is there a string I can thread through all of the dealerships in which we can draw conclusions, expectations, and lessons?
After a lot of reminiscing and scrolling through notes, I came up with a few answers. Here are the top six patterns I’ve noticed after 10,000+ hours and just about 250 dealerships.
Employee Turnover
I may be showing my naivety with this one but I have to say it comes in as the most shocking pattern I’ve noticed. It began within the first couple of months working with dealerships; I started getting calls from customers asking us to remove existing users and/or add new ones. A pretty standard request, but it was the consistency of the calls that surprised me.
Fast forward a year, and one of our growing sources of customer acquisition was surprisingly employee turnover. Calls were coming in from users asking how to use Authntk at their new dealership, to which I would immediately send over a payment form. We had champions of our product selling us to their new GM’s, contract in-hand. It became evident when Authntk users move to another dealership, they want to take us with them.
I learned that things like pay structure, management, and fickle hiring all contributed to the inevitability of salesmen walking out. As you may have guessed, our dealerships with the lowest employee turnover also happened to be the most successful, as far as volume and sales. It’s really not difficult to see why; employee retention correlates to customer retention, money typically spent on hiring and training can be applied elsewhere, and strong management just so happens to breed both sales and employee longevity.
NADA Chief Economist Steven Szakaly told Automotive News: “When you look at the best-in-class dealerships — those that are highest in terms of revenue and profitability — they also happen to have the highest employee retention rate.”
Vendor Crowding
“Know your place.” That’s the advice I would give my much younger self trying to sell video to car dealerships. I had this idea that dealers could very easily allot marketing dollars to video and with Authntk, well, you don’t need much more. I don’t mind telling you it took quite a few mini lectures from frustrated GM’s to realize yes, we can be a player in the game, but we need to find our position first.
Once I stopped and took a look around, the amount of vendors vying for dealership attention floored me… web designers, photographers, online chat suppliers, phone sales training and tracking, commercial and ad production, web analytics, SEO, texting and video services, CRM’s, etc. – just a very small taste on the marketing end.
My notion that dealerships have a high budget with limited services quickly changed. It’s more like a limited budget with a wide variety of services. I knew in order to be successful we would have to settle into our very specific niche and stay ultra-focused on how we help dealers bring in revenue. It’s only with this formula that we are we able to thrive in such a crowded space.
Video Implementation
I bet all of you readers out there think our #1 goal at Authntk is to sell our product. You’re right in the sense that we need dealerships to buy our product to survive, but there is a more important goal we are hyperfocused on, and that is active users. What good is a product if no one is using it?
Stagnant users means a lot of things.
Most importantly, it means the dealership is wasting money on something they’re not using. It means they’re not consistently using video in their sales or service process. It throws a red flag on our end for probability of cancellation, and it means the dealer is interested in using video but just doesn’t know how to get their team on board.
A big part of my job at Authntk is to prevent all of these things from happening. I’ve learned the only way to maintain active users at every dealership is to emphasize and assist in video implementation. Video needs to be a part of the process in order to be successful, it’s that simple.
Dealerships that require the use of video in the sales process, track video reporting, incorporate it into trainings and sales meetings, and incentives video use ultimately see a return on investment. If dealerships fail in these tasks, video will fall in importance and a huge opportunity is missed.
Steele Chevrolet is an Authntk customer and a perfect example of what video can do for a dealership if implemented properly. Sales Manager, Chris Beaton, had this to say about new hires and video…
“We’ll get them into the sales meeting and they’re seeing how fired up everyone is getting watching these videos. They’re seeing what their coworkers are doing and we’re going around the room talking about success people have had with video this week, and that’s all the buy in they need. While there is an expectation there, this is the culture of our dealership and people are going to buy in on their own.
And you do have to have a culture. If you’re not talking about it and you’re not pushing it and you’re not showing people how important it is, it won’t come to fruition.”
Personal Brands
Video in the Service Department
“My service guys would love this!” To say I hear this phrase a lot would be an understatement. Logically, video in the service department is a no-brainer. It lends 100% credibility and transparency to a place that no one trusts, not to mention it saves time and generates income. Getting the consensus on that isn’t the problem, we’re dealing with a bigger beast here.
In researching why most of our customers were leaving this huge opportunity on the table, I learned a couple interesting things:
1. The service department is known for being late to the game.
2. Some dealerships still consider service a side income.
Turns out, I wasn’t the only one asking these questions. Service has a reputation of lagging behind tech trends and digital advancements, and while most dealerships consider it a big chunk of revenue, there are still non-believers that are totally oblivious to the cash cow attached to their dealership.
Now, service departments are competing with smartphone maintenance applications and online parts. If you have yet to allocate resources or bring your fixed ops to the new age, you should have started yesterday.
Strong Management
If there is one variable that’s essential to a successful dealership, it’s strong management. In my 10,000+ hours, I’ve rarely witnessed a thriving dealership that did not have noticeably strong leaders in place.
Here’s what that looks like: a culture in which employee expectations are set as early as the interview, employees who feel supported and challenged, and managers who aren’t afraid of the ever changing digital landscape.
Forward-thinking leaders who are willing to take risks and adopt new strategies early on have proven it pays off. Trends like texting, video, local SEO, and online auto shopping are like candy to these types of managers, and they can’t wait to eat it up and feel the high. The excitement trickles down from higher-ups and I’m able to see the values and priorities of managers reflected in the salesmen I work with daily.
On any given day, if a salesman from one of our most successful dealerships calls me to ask a question, request a service, or express a concern, I’m able to tell which dealership they’re with before they tell me. Salesmen are a product of the culture at their dealership. So if the performance of your sales team is what keeps you up at night, consider focusing on management first and let the dominos fall.
Your Thoughts
Now, we want to hear from you. Can you relate to any of these patterns? Are there any of my findings that you don’t necessarily agree with? Is there something I missed? Comment below or on our social pages with your thoughts!
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