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Managing From The Top Down


After 30 years on the dealership side and the last eight serving dealers through data-driven metrics, coaching, and accountability, I have learned that success can have numerous definitions, which is why dealerships must be driven from the top.


Serving dealerships for the last eight years as a team member of Lotpop has been very eye-opening from an outside-the-dealership view. I witness overall performance differences when partnering with top-down-driven dealers versus not.


It starts with the Dealer and General Manager being on the same page about how they will manage, hold their team accountable, and do it without concerns about what could be a pitfall to strength in management. A systematic approach to your bricks-and-mortar and digital dealerships with the exact expectations is critical to success, especially in today's climate and market. Consistency, as well as being a student of your store with the people in your market, will drive actions you need to proactively take to ensure you are driving consistent and increased results where you focus your attention, and that attention will shift daily.


I love using sports analogies, and when you think of some of the best and most productive teams in history, they are top-down-driven. They are relentless in being a student of their organization and understand how to put their best players in positions to succeed on game day. I was blessed by a friend who had an internship with the Indianapolis Colts, who allowed me to serve a small role on game days with that organization for more than 20 years. For most of those years, my position was on the sidelines between the offensive and defensive benches, which allowed me to see and hear in-game strategies, adjustments, tensions, and celebrations. The amount of understanding and top-down management during those 3 hours is some of the most intense and pressurized proactive management you will ever see. The preparation that happens all week long leading up to game day is the proactive setting up of the game plan based on the players on your team and their strengths, coupled with the understanding of the strengths and weaknesses of the players on the opposing team.


Your game day is every day. Proactively and consistently, you can put your dealership and the people in your market in the best place to increase both volume and the highest return on your owner's inventory investment by moving a depreciable asset early in its lifecycle within your inventory. Using data to understand how your store and the people in your market can perform daily is essential to managing your organization proactively, and driving that daily is where top-down management should play its most significant role.


Proactively understanding the data behind the areas within your used car operations will help you drive a greater return on your owner's inventory investment.


How quickly is your store getting your inventory through service, detail, full photos (preferably 30 or more photos), price, and a quality meta-tagged description? Can you press that time down to give your team more time to sell the vehicle in the first 30 days (about four and a half weeks) to increase and maximize our return on our investment?


Once the vehicle is fully online with quality photos and descriptions, do we understand the facts behind how this particular vehicle sells on our lot with our people in our market, and do we have the market defined? Is it a local, regional, or global unit? Do you have it merchandised and priced that way, or are you using a blanket pricing strategy that does not address the individual vehicles you have in inventory? Example: Do you know how your franchise inventory sells compared to your non-franchise or your trades compared to your purchase units, and are you using the same pricing strategy for all the above?


Are you driving a greater return on investment with your inventory, or are you looking at the very deceiving front gross realized after the sale, regardless of the age of the vehicle when it is sold? Are you proactively managing age buckets to prevent bucket jumpers of inventory from bleeding through your age buckets? As they do, the cost to market goes up, and typically, our strategy with aging inventory is to reduce the price, thereby shrinking our potential overall margin or return on those individual units in inventory.


When analyzing the individual vehicles in your inventory, do you first see if you have customers (leads) on that vehicle? If you do, do you understand the quality of the conversations with your customers in your digital dealership? If a customer visits your brick-and-mortar dealership, how many of you know the conversations between your salesperson and your customers? Are you doing the same thing in your digital dealership, where you have 10-20 times the number of customers visiting your store?


For those vehicles in your digital dealership that do not have customers on them, what is your manager's strategy to put those vehicles in front of more eyes online to attract a customer to it, and how quickly are you responding to the customer?


Recent data on customers reaching out through your digital dealership (2022 Clarity data):


  • Sales calls answered experienced a 74-second median hold time, which 57% of customers stated could have been more frustrating and proved difficult for sales and BDC teams.

  • 65% of returning qualified leads experienced delayed follow-up.

  • 15.5% received follow-up 1-2 days later.

  • 23.6% received follow-up 2-7 days later.

  • 60.9% did not receive follow-up after one week, if at all.

Results of a Clarity Voice survey: www.clarityvoice.com.


Does your team understand how to serve your customers on inventory in stock every 2-3 days, or are they just logging into the CRM and working on tasks? Some of those tasks have nothing to do with your inventory selling today. Understanding how to proactively become more efficient by contacting your customers is essential to driving results with your inventory sitting on your lot daily. If you have a lead on an in-stock unit, that should get attention every 2 to 3 days until they buy or communicate with you to stop. Do you know which vehicles to switch active leads on that were first inquired about have already been sold?


You must manage each vehicle in your inventory individually to determine if the vehicle has leads; yes, have your team speak with your customers and provide updates so you can choose your direction on that vehicle. If there are no leads, you must review the merchandising. Are your photos arranged to show your customers the high visibility options within the first 10-12 photos? Do your customer comments have those meta-tagged high visibility options at the top for quicker visibility and confirmation for your customers?


Finally, are you reviewing these action items daily to determine your game plan for driving consistency throughout your used car department? A consistent, proactive, top-driven daily approach in each department within your dealership will yield a high return. Plus, continuing to be a student of the business you are operating by managing it from the top down is necessary in today's market with today's more educated consumers.


For more information or a free analysis using your data, visit www.lotwalk.com.


-John Anderson

Executive Vice President

Lotpop Inc.

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