Fall 2006 issue of Horizons

In addition, the life cycle of improvements to a dealer's facil- ity is only becoming shorter. A major facelift that once could be counted on to last 10 to 15 years may only last five now as the manufacturers are constantly tinkering with their branding and image. The moral of the story is that dealers shouldn't fall in love with their real estate. If a dealership can't make enough to pay a fair rent based on a realistic valuation of the property, then the real estate is probably worth more to another busi- ness that can make the kind of money that will support the fair market rent. Customer Satisfaction Customer satisfaction is where a dealer can either overcome shortfalls in the first two factors or negate strength in those two areas by having poor customer service. This factor is one with which dealers can make an immediate and lasting impact by getting involved. Creating and maintaining a culture of innovation and experi- mentation is easier said than done, but dealers can create a successful high-performance culture by always challenging and focusing their team on improving the experience cus- tomers have in their dealership. The ultimate goal is to cre- ate and maintain a competitive advantage over other local competitors.

The best place to start is to question everything taken for granted as “just the way it is.”

• Why does it take so long to deliver a car? • Isn’t there a better way of getting customers through the service driveway? • What are other retailers doing to “wow” customers? Sometimes it's the little things that dealership employees overlook because they see them every day. Have you ever tried using a mystery shopper service to find out what your competitors are doing and how you stack up against them? Any organization can learn volumes about itself and its com- petitors by constantly asking questions and seeking to improve the status quo. The automotive dealership is a unique business that has endured despite rapid and unrelenting change that is only sure to continue. The one thing that has not changed are the factors that largely determine dealership value. Dealership value can be increased in big bold strokes by adding an up- and-coming franchise or building a new facility, but long-term value cannot be taken away from a dealer that has a strong franchise in a good location with a reputation for outstanding customer service.

Questions? Contact John Butler, CPA Partner-in-Charge, Automotive Services Group 314-290-3333 john.butler@rubinbrown.com or Cynthia McKee, CPA Manager, Automotive Services Group 314.290.3441 cynthia.mckee@rubinbrown.com

34 • summer 2006 issue