June 6, 2005 – The 4 P’s that lead to better dealership profits
June 6, 2005
Filed under Features
After analyzing hundreds of dealerships through the 20-group experience, it has become clear to me that there are some basic, fundamental characteristics that exist in ALL the most successful dealerships — the ones I call “Top Guns.”
These characteristics are not only foundational but each one is built upon the other. The order of their development is as crucial as putting a wall on a foundation and then the roof on the wall. If not assembled properly, no business will stand the test of long-term profitability.
Sharp readers will see that these “4 P’s” require you to switch hats between two roles that our Top Guns understand very clearly: The roles are Leader and Manager. Those are very different roles. I’ll point out which of the “4 P’s” requires which role.
PURPOSE: A Leadership Task
The foundation, or purpose, of any dealership is the WHY, WHAT, and HOW of your marketplace identity. It’s the “personality” that your store will present to the public.
Everything you do should reflect this personality. So, this is by far your key decision.
To make this decision wisely, you must know your marketplace and the opportunities it presents. Naturally, you need to know the strengths and weaknesses of your competition. But you must also know your own company’s strengths and weaknesses.
The marketplace identity you choose should match your own personality and beliefs as closely as possible, or it will be as hard to maintain as pretending you’re the King of Siam…and as hard for the public to believe.
Yet, your identity must be different, in some important ways, from the identities of your competitors. Try to make it reflect the personality of the customers you serve (or want to serve).
What will make the bulk of your potential customers comfortable? Should you be perceived as country casual, metro, or yuppie hi-tech? Do you want to be perceived as young, new, exciting and always delivering something new? Or is your message that you are family, that your roots run deep in the community and that your customers can expect the same great relationship for generations?
In other words what is your “UMP” or unique marketing position, and how will you deliver this message though your facility, people and marketing?
For example, at PowerHouse, our stated purpose is “to assist astute powersports teams to improve their bottom line and quality of life.” Everything we do revolves around that core value or purpose.
But our “identity” also includes a strong dedication to remaining independent, so our members can always be sure we’re delivering the best possible products and services, uncontaminated by outside influences.
Not only does the market seem to welcome that “identity” of ours, but it’s easy for us to deliver because it happens to match my own core beliefs precisely. It’s no fun to run a company that makes you strain to be something you’re not.
Your job is to establish such an identity for your own company, and then lead your people to fulfilling it.
PEOPLE: Mainly a Leadership Task
Do your people understand and reflect your dealership’s purpose and core values? Do they have the necessary skills to deliver YOUR purpose, from their training and background to their appearance?
You’ll set the tone through your leadership. You’ll do this not just by what you say, but also by the way you act. And you’ll motivate your managers to reflect your company’s values as they hire, train, and manage their staffs.
PROCESSES: A Management Task
Are your processes documented? Is your team well trained so there is consistency in all areas of your dealership, from the way your products are ordered and the way your customers are handled to interdepartmental paper flow? Do those processes reflect your purpose?
It may not be the boss’s job to create these processes, but it’s definitely his job to see that they’re created and (most importantly) that they’re followed.
PERFORMANCE: A Management Task
Does every member of your team understand the expected performance for his or her position? Is there a system in place to quickly and concisely measure that performance? Does everyone know “how good is good?” Are your compensation plans set up to reward top performance? Are there multiple performance indicators, from profit to the perceived customer value of the products and services you provide?
Again, you may not be the only source of these performance indicators, but it’s your job to see that they exist and that they’re used to maximize your company’s success.
We’ll talk, in future columns, about this distinction between being a Leader and being a Manager. Successful dealers do a lot of leading and relatively little managing, so if you find yourself too bogged down in daily trivia to make the leap from “Good” to “Great,” you may want to watch for those hints. psb
To join a PHD-20 group and become a Top Gun dealership call PowerHouse Dealer Services toll free at 866.896.3759 or email Bill@phdservices.com.