New Year’s Resolutions to Keep Your Business Growing in 2017
- J.D. Power suggests sales cycle has hit the peak.
- Here are recommended resolutions for 2017 to keep your business growing.
There were signs in 2016 hinting at what’s to come in the industry. We saw the decline, although modest, start to creep in. Historically, automotive sales follow a cyclical pattern of rise-flatten-decline. This article by J.D. Power suggests the cycle has hit the pinnacle.
According to John Humphrey, senior vice president of the global automotive practice at J.D. Power, “The fact that this will be the sixth monthly decline in 2016 puts the industry in territory not seen since before the recession.
“We do not foresee a large pullback in sales in the near term, but the fact that retail sales are beginning to contract, despite high incentives and extremely low interest rates and gas prices, is a clear indicator that this cycle has reached its peak.”
Dealers need to be better prepared for a sales plateau and to prevent a repeat of 2009. Here are some recommended resolutions for 2017 to keep your business growing:
- Increase efficiency.
In speaking with hundreds of dealers over the last couple of years, improving efficiency is almost always the number one objective. The recession put nearly 4,000 dealerships out of business. When customers started buying cars again, fewer dealerships were dealing with greater volume. Every little bit helps, even if it’s as simple as learning keyboard shortcuts. You could start by improving efficiencies in one department, or implementing better technology to digitize your entire dealership.
- Choose quality over quantity.
Many believe hiring more people will increase their business’ efficiency. But the results are often the opposite. It’s not about hiring more people, but having the right people.
- Create new profit centers.
When sales start to plateau, typically so does profitability. More than ever, you need to get the most out of every customer. One way is to tap into the $40 billion accessories market, of which dealers are only capturing 5%.
- Engage Better With Your Customers.
Customer satisfaction has become increasingly important. Customers now base their purchase decision not just on the product, but the buying experience itself. Stay by their side as much as possible and keep them fully engaged. Make sure you communicate with them periodically and in the manner they prefer. If they do have a negative experience at your dealership, seize the opportunity to turn things around.
Bad times form good habits. But good times build bad ones. While the industry has enjoyed healthy growth over the last few years, let’s not forget lessons learned from 2009. The new year provides a fresh start to form and retain good habits and relinquish bad ones. Use our recommended resolutions to guide you in 2017.