Fall 2009 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

quickly, but lasting improvements can only be achieved through sustained effort and improvement in the leadership of every department. Each department will need to spend more time developing the strategy and objectives needed to improve their customer service and profitability. Most dealerships have an unwritten set of strategies and objectives. However, as these strategies and objectives get more complicated, there will be more to do than a department head can accomplish. As a necessity, the strategy and objectives must be documented in order to communicate them to others. Furthermore, each department's strategy and objectives should be coordinated into an overall strategy. The overall strategy and objectives also must address the way the dealership attracts, develops, retains and rewards high-performing managers. Marketing is another facet of a dealership’s operations that will be impacted. The best marketing campaign in the world will be ineffective if customers are disappointed with their experience when they show up at the dealership. The more complex and detailed these plans become, the more they will need to be coordinated and communicated if they are to be successful. Change has always been a way of life, but it is now occurring at an even faster rate. Dealerships and businesses that can adapt to change and take advantage of the opportunities they present will continue to grow and be successful.

the ones who do not will be in fixed operations. Dealerships with a strong base of customer pay service work were able to survive the unprecedented drop in new vehicle sales because of the profitability of their service departments. While dealerships have been adapting to lower levels of warranty work over the years, the latest opportunity has arisen overnight. After the bankruptcy of Chrysler and General Motors, the surviving dealerships that have found ways to attract orphaned customers have been able to increase their sales and service revenues. Dealerships successful in attracting these orphaned customers have had to find creative ways to get them in the door and earn their trust. The ability of dealerships to retain customers who transfer from closed dealerships is directly related to their ability to provide top-quality customer service. Even more challenging is that customers’ perception of what constitutes “top-quality customer service” has been a moving target. The competition for customer pay service work has been intense and will continue to intensify. Dealerships must continue to evolve and adapt their service business to retain and grow their customer base. This adaptability will require creativity and flexibility. What will be the next big change to rock the retail automotive industry? It is not a question of if but when it will hit. What do dealerships need to do to be ready to meet these challenges? There are three things that impact the success of a particular dealership — product, location and management. In the short term, there is not much that can be done about product or location. However, management is the one area on which dealerships can have an impact. Dealerships with well-trained, competent, motivated, engaged management teams are more likely to be successful than their competition. Unlike product and location changes, which are usually big, changes in the strength and capabilities of a dealership’s management happen more slowly. Yes, hiring and firing managers can effect changes

Questions? Contact:

John Butler, CPA Partner-in-Charge Automotive Services Group 314.290.3333 john.butler@rubinbrown.com

26 u fall 2009 issue