What's the Downside?

Unlike new technology, every investment in training is guaranteed to pay off.

February 2017, Auto Dealer Today - Feature

by G.P. Anderson

Our industry is evolving, obviously and painfully, due to margin compression. My advice? Don’t fight it. Embrace it! Things have changed significantly in the past decade. You have been forced to invest in new technology, but if you are like many dealers, this has only led to further declines in profitability.

If you are failing to maximize the benefits of new technology, it may be because you are undermining whatever operational efficiencies you may have gained by putting untrained staff at the controls. This unlikely scenario is highly prevalent in the dealership business, where we allow increased tech and staffing costs to erode our bottom lines.

The solution is to stop hiring people before you have to, stop adding technology before you need to, improve your efforts to attract new customers, and strengthen your existing customer relations. You can start today by tracking the following four indicators:

1. Leads

Somewhere in every dealership is a list of potential buyers who have contacted the store but have not purchased a vehicle. They should be contacted again and followed up with regularly, and every lead should be tracked monthly and quarterly.

The money is in the follow-up. You can’t Velcro your lips to the showroom windows and expect to make a living. Confucius once said, “By nature, men are nearly alike; by practice, they get to be wide apart.” Take steps to increase your referral rate from existing customers and people you know. Create stated objectives. Work it!

2. Closing Ratio

During the past calendar year, how many people did you see, and how many did you sell? Even those you failed to sell liked something about you, your marketing, and your dealership. Focus your efforts on attracting the right customer in the right way and then close them. Did you turn every stone? Did you get managers involved in a timely manner? Do it!

3. Customer Turnover

The easiest customers to keep are the ones you already have done business with. In our competitive environment, it’s essential to keep as many as you can. If you’re losing customers, you need to improve customer relationships and take a look at the quality of your services or the way they are delivered in all departments.

Expound upon opportunities. Seek out orphan owners and service customers. Position yourself for the upcoming tax refund season. Stock the right inventory. Offer it!

4. Gross Profit

Gross profit is a measure of how efficient your business is. If human capital is an expense that needs addressing, it would be naïve to dismiss this indicator of continued growth. Exemplary, firstclass and exceptional training will focus on the customer’s best interests and, ultimately, grow your bottom line.

Get the right people on the bus. Treat it like a daily deposit. Count it!

In today’s world, where information flows 24/7 and is accessible to anyone, from any device, anywhere, your best investment is in your current staff. Train them properly and don’t forget to monitor their success. There will be no downside in 2017. You will have a record year. Expect it!

G.P. Anderson is finance director of Thielen Motors Chevrolet Buick in Park Rapids, Minn., and a 25-year industry veteran. He is ACE- and AFIPcertified, a 2008 F&I Pacesetter and winner of the inaugural 2011 F&Idol contest. Email him at


  1. 1. Gary Schultz [ March 16, 2017 @ 05:09PM ]

    GP is right on. The latest gezmo dealers purchase can not replace talent, training with consistent results. Love to hear you live sometime.

  2. 2. MF Anthony [ March 29, 2017 @ 06:03PM ]

    Nice article on tech. So true about dealerships buying 'too much stuff.'

  3. 3. Mad Marv [ April 08, 2017 @ 03:46AM ]

    Great perspective, GP! 360 degree thinking about known issues facing everyone of us.


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