For some time, the automotive 20 Group has been a staple amongst many franchise and independent dealers as a source for critique and new development strategies. Definitively, a 20 Group is a group of dealers who meet with some regularity to discuss and strategize their businesses together. What I have never understood nor bought into was the belief that a competing dealer was going to tell me how to get rich and become more successful. To me, this is a fallacy at best.
Some dealers may argue that their 20 Group members are not "competitors", but the reality is that everyone is a competitor even if allegedly outside of your geographic scope of doing business. Furthermore, while there may be some dealers out there who genuinely do not mind exchanging profitable business strategies with their fellow dealers, it is naive to think that most car dealers are that generous.
The more likely scenario is that at the very least subliminally, many, many dealers feel like the only person that will truly understand them is another dealer. Moreover, while there may be the overt intention of "sharing", the fact of the matter is that most dealers are very protective of their secrets. What draws them into this situation, however, is their inherent "need to know" what the other guy might be doing and because of the otherwise rather juvenile psychological mindset that they hate leaving their comfort zone. Thus, the 20 Group is their "warm and fuzzy", albeit an unlikely source to deliver the shot of creative adrenaline needed to fix so many broken dealerships.
What is the real incentive for one dealer to tell another how to be successful?
The fact is that 20 Groups are not particularly innovative and tend to reinforce the definition of insanity (a la Freud) because it is far more likely than not that were you and I to travel to 20 different dealerships within a 50 mile radius that the same 20-year-old bad habits prevail in the vast majority of them. That is reality.
Most car dealers are not necessarily known for ingenuity, although in all fairness, there are certainly dealers who set the trends for success. What is most important to measure, however, is whether a dealer is just covering up poor business practices with a shiny new facility or whether a dealer is using all available means to increase and grow his/her business without smoke and mirrors. One of the most effective benchmarks of dealer success, for example, is employee retention percentage. Again, all that a dealer can truly hope to obtain from a 20 Group is much of the same retread rhetoric that they've been discussing for the past decade.
So, what is the answer?
While many car dealers are so quick to acknowledge their willingness and efforts to "change", the sad fact of the matter is that their version of "change" is just recycling yet another manager who has drifted from dealership to dealership following the manager he/she replaced who has just moved into the musical chairs line for auto managers. It is tough to effect real change considering that all of the managers in town know the systems and processes of their former employers. Therefore, it is time to truly advance their thinking and to give due consideration to employing third-party consultants to help develop and implement positive change and growth.
Now, for many people in many professions, those of us who have heard people refer to themselves as consultants receive the obligatory eye-roll and dismissive kiss-off. In many cases, the position of "consultant" truly does provide an important sounding title for a person who is either unemployed or has failed at everything they've tried. But, for the moment and for purposes of this article, let us shun the cynicism and acknowledge that there are professionals in the industry who are more than happy to help a client improve their company in exchange for due compensation.
Consultants bring one thing to the table that no 20 Group can ever hope to deliver - objectivity.
Dealers would be wise to face the fact that their buddy in the next town over may very likely have no other goal than to cherry-pick any valuable piece of operational intel that will give them an operational advantage. And, it is an all-to-familiar scenario that the local car business and its inhabitants are a far more entertaining dramatic series to follow than the most popular soap opera or housewives reality show on television.
Objectivity is everything with respect to hiring a consultant who has no other mission than to retain you as a client, see you succeed, and get paid. Yes, you will have to spend money on a professional consultant, but look at the money that dealers literally piss away on ridiculous, ineffective ad campaigns, the ubiquitous weekend newspaper ad buy, fancy large LED screen televisions to show a service customer that their car is done, and over-conditioning an otherwise not very retailable unit. So, if a dealer were to track all foolish expenses or to simply redirect their expense structure in a way as to justify potential increased growth, the money is there to acquire the knowledge to help them grow their company. In fact, they really cannot afford not to do so, as they risk a long or short term bleed-out or a long term, no growth plateau.
A knowledgeable consultant comes to a dealership with open eyes. Because they have no vested interest in the dealership or any specific employee or professional social situation, a new set of eyes makes their evaluation invaluable. And, while there is always a realistic professional margin of error, an effective consultant (dependent upon their expertise) can view a situation and set of circumstances and make a non-emotional recommendation to the dealer as to a suggested strategy or adjustment. The simple technique of shadowing the staff, interviewing associates anonymously, and casual interaction is a passive approach to consulting that can reap massive rewards for the dealer.
Frankly, the biggest obstacle standing in the way of most dealers are the dealers, themselves. Will they be open-minded enough to call for outside intervention? Are they willing to admit that not only can they afford it, but, more importantly, that they cannot afford not to seek said intervention? Lastly, will their ego, affinity for staff members, and comfort zone allow them to accept the recommendations?
Socially speaking, 20 Groups are probably a nice way to maintain a congenial relationship with a group of people who have similar interests and goals. In fact, it is likely that a dealer can actually pick up useful tidbits of information and intel that will help him/her in some fashion. But, it is also important to realize that smart dealers also likely to engage in spreading disinformation that can become cancerous and obfuscate the forest for the trees. This is just reality.
Yes, change in the car business is inevitable, and you will consistently hear dealers acknowledge that fact. What you won't hear in many cases, however, is a viable strategy for repairing or growing one's dealership business. While this writer knows many dealer principles who have experienced great success in spite of themselves and their poor choices, image, or otherwise, most flailing dealers may need to give strong consideration to a fresh perspective and unemotional input that a professional consultant can bring to the party. Recognizing and acknowledging that change is inevitable is one thing; willingness to initiate change is another challenge for dealers entirely.
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Copyright 2017, Robert Liotti, The Car Business Insider. All Rights Reserved.
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