Time to Recession-Proof Your Dealership

With new inventories at record low levels, used car market pricing moving dramatically, and profitability at an all-time high for many dealers, a declining SAAR could be a leading indicator that things may be about to change, maybe not today, or next month but we can all feel the earth shifting a bit under our feet. And we are not alone, analyst predictions are mixed as to what the rest of 2022 looks like, so, let’s start preparing now!

In good times, don’t let the basics fly out the window

When times are good, sales are booming and profits are high, it often prevents us from sticking to the fundamentals. Suddenly there’s no need to confirm that appointment and you aren’t rushing to make those follow-up calls anymore. You can become lackadaisical and like Alan always said, “Good times create bad habits and Bad times create good habits.” Let’s not wait until times get bad before we start working on good habits. All those basics you learned as a rookie, and your car sales training, suddenly go out the window because you’re living the highlife baby. But then what happens when the market turns, and you need to keep yourself recession-proof?

Aside from knowing the steps to selling a car, successful salespeople will also look for ways to create opportunities, versus waiting for them. They learn how to generate and cultivate opportunities and practice those habits daily. Have you lost focus on the basics?

It’s time to recession-proof your dealership

There is one thing you can always count on in the auto business and that is the effect of economic swings and vehicle sales are a leading indicator of these swings. When those highs begin to drop and suddenly you realize you are headed into a deep economic abyss where you are struggling just to get a lead to call you back. Despite your previous six-figure paycheck, you are back out on the front line waiting for someone, something to close, or struggling with what to say on the phone. Your team is giving away all the gross, getting about a quarter of the inbound sales calls you were getting before, and desperately discounting your merchandise even before you’ve set an appointment with the lead. Now is the time to avoid the abyss and prepare your dealership to make you and the dealership recession-proof.

The Hunter versus the Farmer

When it comes to sales performance and work habits you can generally classify all salespeople into two categories: The Hunter and the Farmer.

Hunters typically make great closers, they know how to react off-the-cuff, and they know their targets when they see them. Just like a hunter, they’re quick and impatient to shoot. Hunters can seem aggressive, in control, and laser-focused on immediate results. They find their stoop, shotgun in hand, and wait to shoot. If nothing passes, they don’t shoot, and they don’t eat. Every dealership needs a set of hunters or closers that they can rely on to “strike while the iron is hot.” Those who can close opportunities in the showroom at any given time.

Unfortunately, these types of salespeople tend to have such a strong focus on those immediate results that they lose focus on how to create opportunities. This is exactly what leads to that vicious up and down income cycle. Crazy record-breaking sales months and incredibly fat paychecks, followed by the proverbial plunge to smaller checks and angry spouses.

Farmers on the other hand are generally much more patient and pay more attention to the small tedious steps necessary to create more opportunities. They are not as concerned with temporary satisfaction. They’re not looking for a one-and-done feast for the night or hanging on the point and waiting for that lucky buyer. Farmers will put in the work, sometimes behind the scenes. They’ll take those small steps to carefully cultivate not one- but several opportunities. Farmers tend to get placed in the back, in the business or Internet departments where details are more important. But today, the farmers in this business are the ones who will see more success and be paid the most on the showroom floor.

Hunters ride the waves created by the economic environment with no control over the ups and downs, Farmer’s control their own economic environment with a steady pipeline of customers they have been cultivating.

What your daily habits say about you – are you a cultivator or a waiter?

No matter the time of year, current book values, inventory levels, market adjustments, good months, or bad months in the business, you have the ability to create your own success without relying on your dealership’s leads.

Every dealership wants a good hunter and I’ve met some pretty talented ones in my day. When you have someone in front of you, it is vital to know how to close them. So yes, as a salesperson you need to be a little bit of a hunter. But in today’s car business, many are losing opportunities long before they have a shot at closing something. You want to have a combination of both hunter & farmer mentalities. Increasingly, shoppers are online, which means that you need to get really good at farming and cultivating opportunities and creating them instead of waiting for them to land on your lap.

When you walk into work every single day, do you have a plan? Are you proactive and planting seeds of opportunity for sales down the line? Are you making time in your schedule for those outbound calls and filling your funnel with opportunities? Are you asking for referrals and staying top of mind with your current customers? Are doing those small things today that will get you results tomorrow? Your future depends on those things.