Maximizing Automotive Dealership Performance: A Comprehensive Overview

News
4 min read

With a career spanning my entire adult life in the automotive industry, I have witnessed firsthand the gradual evolution of retail, where I began, which has been greatly accelerated by the Covid-19 pandemic. Consumer behavior has changed dramatically, necessitating a corresponding adaptation within the automotive sector. Today, dealerships must readily respond to shifting market demands and heightened consumer expectations to thrive in an increasingly competitive landscape.

While the core principles of salesmanship and customer satisfaction remain pivotal, achieving peak performance in modern automotive retail requires a holistic approach. This entails encompassing data-driven decision-making, streamlining dealer operations systems, effective sales and service management tools, and robust people management strategies.

Digital Integration and Consumer Expectations

A fundamental transformation in the automotive industry has been the integration of digital platforms and online sales channels. The pandemic accelerated this shift as consumers increasingly sought an “Amazon-like” experience in car buying. To meet these evolving expectations, dealerships are now transitioning towards seamlessly blending digital and physical experiences. This includes initiatives such as virtual showrooms, augmented reality (AR) test drives, and online financing options, all aimed at enhancing convenience and providing a more immersive buying journey.

In the era of modern retailing, here are some key elements that should be considered to maximize an automotive dealership’s performance today, and going forward:

Data-Driven Decision-Making:

Leveraging comprehensive data analytics is crucial for understanding market trends, consumer preferences, and dealership performance metrics. By harnessing insights from key performance indicators (KPIs) such as sales figures, inventory turnover rates, customer satisfaction scores, and service department efficiency, dealerships can optimize inventory management, pricing strategies, marketing campaigns, and allocate resources effectively.

Dealer Operations Systems: Implementing integrated dealer management systems (DMS) is essential for enhancing operational efficiency. A robust DMS should encompass modules for inventory management, sales tracking, finance and insurance (F&I) processing, customer relationship management (CRM) & customer data platforms (CDP), and service scheduling. Centralizing these processes within a unified platform minimizes administrative overhead, improves workflow transparency, and ensures a seamless customer experience.

Retailing Tools for Sales and Service: Equipping dealership staff with advanced retailing tools is essential for boosting sales and service revenue. It’s also important to expand beyond the captive finance arm by partnering with multiple independent financial institutions and credit unions. This ensures that every sales transaction is optimized, avoiding missed revenue.

Digital retailing platforms are now fundamental, allowing customers to browse inventory, shop by payment options, and initiate transactions seamlessly online. A critical customer expectation is that the payments presented are all-inclusive, consistent and the same, both online and in the store.

Customer relationship management (CRM) software empowers sales teams to track leads, manage interactions, and personalize communications effectively. In the service department, appointment scheduling software and electronic vehicle inspection tools enhance operational efficiency. These tools streamline workflow and provide customers with real-time updates via video and text, enhancing satisfaction and increasing the gross margin on repair orders.

Choosing the right technology solutions is paramount. Dealerships must ensure their tech stack integrates seamlessly with their Dealer Management System (DMS) to maximize efficiency and deliver exceptional customer experiences. Avoiding disparate solutions that lead to inefficiencies and redundancy is crucial for optimizing operations and maintaining competitiveness.

Maximizing each Sales Opportunity:

It is especially important during a time of gross margin compression to optimize each sales transaction. A host of category-best aftermarket products and services are available through which additional gross margin can be added to each deal; these products and services generally fall within one of these categories:

  1. Vehicle Service Contracts
  2. Prepaid Maintenance Plans
  3. Recreational Vehicle and Powersports Protection
  4. Lifetime Warranty Programs, GAP, and numerous Ancillary Protection programs.

Customer Experience Enhancement:

Delivering a superior customer experience is paramount for building brand loyalty and driving repeat business. Prioritizing customer-centricity involves personalizing the customer journey, providing transparent pricing, and offering convenient service options. These efforts differentiate dealerships from competitors and cultivate long-term customer relationships.

Effective People Management:

Engaged and motivated staff are indispensable for delivering exceptional customer experiences. Dealerships should focus on recruiting, training, and retaining top talent, supported by ongoing professional development and a positive workplace culture. Implementing performance management systems and incentivizing staff based on key metrics fosters accountability and excellence across the organization.

Continuous Improvement Culture:

Cultivating a culture of continuous improvement is essential for fostering innovation and maintaining a competitive edge. Soliciting feedback from both customers and employees allows dealerships to identify areas for enhancement and implement changes swiftly. Adaptability and agility are critical in navigating market dynamics and seizing new growth opportunities.

IT Security:

With the CDK security breech, it became alarmingly evident, protecting and securing the dealership’s proprietary customer, financial, and operational data must be a top priority for any dealership. Any third-party partners or suppliers accessing dealership data must undergo rigorous vetting to ensure adherence to the highest security standards, mitigating risks of unauthorized access or data breaches.

Looking Ahead

The future of automotive dealerships is bright, albeit challenging. Dealerships that can effectively navigate the transition to digital sales platforms, personalize the customer experience, explore new mobility models, enhance after-sales services, and invest in their teams will be well-positioned to succeed in this new era. The key will be to stay agile, innovative, and customer-focused, leveraging technology not just to sell cars but to deliver unparalleled value to customers, ensuring sustained success in a competitive marketplace.

Author: George Pero

George Pero is an extraordinarily accomplished leader in the automotive industry. George began his career in the automotive retail sector, where he held various management positions. George’s career achievements include successfully launching, operating, and selling Auctions In Motion (“AIM”), a regional “mobile” auction company that brings the auction to the dealer. George has extensive knowledge & expertise in mergers & acquisitions in the automotive sector, having overseen more than $1 billion in transactions. His sales and general management experience coupled with his success in M&A activities led George to establish Mach10 Automotive, a Dealer Advisory firm offering a 360-degree suite of services to include dealer performance improvement, succession planning, and M&A.

Denyn Pysz

Sales Director

Denyn is a dynamic automotive sales leader with over 20 years of experience, recognized for his expertise in technical certifications, retail sales, and service. With a proven record of driving growth, Denyn has excelled in key management roles across dealership operations, equipping him with a comprehensive understanding of dealership needs at every level. Known for his ability to build high-performing teams and deliver revenue growth, his innovation-driven approach and industry insight make him a trusted authority in automotive sales and service. At Mach10, Denyn advises our clients in Sales, Service, F&I, and Operations, guiding them toward optimized performance and success.

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Kathi Kruse

Financial Operations Analyst

Kathi Kruse is a uniquely qualified and accomplished automotive retail advisor. Recognized as a dealership profitability specialist, digital strategist, trainer/coach, podcaster, and author, Kathi is the creator of the Kruse Control Newsletter, and Founder/CEO of Automotive CFO-To-Go, and Kruse Control Inc.  Born in the heart of Los Angeles to a family of “car people”, Kathi’s passion for the car business spans a 25-year automotive retail career, managing wildly successful $100M+ stores in Southern California. Her exceptional experience, combined with her innovative methods, has led to transformational outcomes and increased profits for over 1,000 clients to date.

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Chris Pero

Managing Director

Chris’ automotive experience spans over a decade in both retail and wholesale. Chris has provided support by growing an auction company at the management level in southern California, and most recently, he was a part of the management team at a Ford and Lincoln dealership.Through his unique experience and determination, he has a proven track record of growth and success and understands the unique needs of the dealership at every level.

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George Pero

President & CEO

Extremely accomplished leader in the automotive industry recognized for his success in retail and remarketing. George’s career achievements include successfully launching and running Auctions In Motion (“AIM”), a regional “mobile” auction company that brings the auction to the dealer. George also holds a wealth of knowledge & expertise in mergers & acquisitions in the automotive sector. He recently served as the Vice President of a national brokerage firm where he was one of the top producers. His experience in the M&A industry brings a keen sense of the due diligence process as well as the art of negotiating while representing both seller and buyer.

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Michael Yanke

Vice President Marketing, M&A

Michael has demonstrated success in expanding multimillion-dollar sales and fostering growth while providing sales leadership in highly competitive global markets. Michael brings decades of marketing management with a proven record of achievement. For over 25 years, he has been successful at building new businesses, securing client loyalty and forging strong relationships with external business partners. His extensive knowledge of marketing strategies, channels, and branding has helped companies achieve success through his leadership, communication, and collaboration abilities.

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Jon Karasek

Vice President

Having recently held the position of Regional Director of Digital Strategy and Innovation for the industry’s largest independent auto auction group, Jon’s skills range from mechanical/technical certifications to wholesale and retail sales. Jon was recognized for leadership accomplishments when honored with the 2021 Automotive Remarketing 40 Under 40 Award. He is an accomplished auctioneer with over 20 years of experience in the automotive industry. Jon graduated from the World Wide College of Auctioneering, and then excelled as the GM of one of Southern California’s premier wholesale auto auctions.

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Chris Pero

Director, M&A

Chris’ automotive experience spans over a decade in both retail and wholesale. Chris has provided support by growing an auction company at the management level in southern California, and most recently, he was a part of the management team at a Ford and Lincoln dealership.Through his unique experience and determination, he has a proven track record of growth and success and understands the unique needs of the dealership at every level.

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David Foley

Director, Dealer Operations

David is a seasoned automotive executive with over twenty years of industry experience. As a results-driven Sales Manager, he consistently delivers impressive revenue growth and prioritizes customer satisfaction. Renowned for his ability to build and lead high-performing teams, David’s visionary approach and innovation-driven mindset keep him at the forefront of the automotive sector. His unwavering integrity and keen eye for industry trends position him as a trusted leader actively shaping the future of automotive sales.

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Sam Abergel

Director, Fixed Operations

With over four decades of automotive industry experience, Sam’s impressive career began in sales at a Chrysler Plymouth dealership, where he was promoted to Service Manager within 18 months. Noteworthy achievements include leadership roles as the President of the Parts and Service Managers Guild in Los Angeles and representation on the Porsche North America Round Table. Sam’s extensive experience and track record of performance improvements includes orchestrating successful dealership transitions, managing and growing service and fixed operations as a transformative leader at Chrysler-Dodge, Audi, Lexus, and Porsche dealers. At Mach10, our clients benefit from Sam’s expert knowledge in driving dealership profitability through strategic guidance, coaching, and creating tailored client solutions.

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Shasta Pellegrino

Executive Administrator

Shasta is a dynamic professional who excels at identifying and implementing effective solutions to complex problems. Her dedication to Mach10’s administrative needs and her commitment to excellence make her an invaluable asset. Shasta's passion for working closely with people and ability to collaborate seamlessly with colleagues and stakeholders alike makes her a perfect fit for the Mach10 team. With her blend of administrative expertise, people skills, and proactive approach to problem-solving, Shasta is poised to contribute significantly to the success and growth of our team and our client partners.

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Carsten Preisz

Chief Marketing Officer

Carsten’s extensive achievements includes introducing and establishing Dutch Supercar Spyker in the Americas and holding senior management/executive positions with esteemed and iconic automotive OEMs to include Rolls-Royce, Bentley, Peugeot, and Fisker Automotive. Most recently, Carsten’s contributions with Market Scan Information Systems, Inc., were key to the company being acquired by S&P Global Mobility.

Whether the challenge calls for creating the customer standards for Bentley/Rolls-Royce or being responsible for the Los Angeles Marathon TV-broadcast, which led to an Emmy nomination, Carsten is instinctually entrepreneurial and an out of the box thinker who enjoys solving strategic challenges to elevate the client experience and maximize profitability.

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