I like watching old television programs. “The Andy Griffith Show” is a favorite. It depicts a simpler time. Sheriff Andy Taylor was in charge of the town, Deputy Barney Fife provided some humor, and Aunt Bea kept everyone in line. Eccentric townspeople served as the foil for many episodes. Son Opie delivered frequent life lesson storylines and, even though it was filmed in a fairy tale-like setting, many of those life lessons still apply.
Andy Griffith’s rock-solid character always stepped in as problem solver, mediator, advisor, disciplinarian and counselor. He wore many hats, but never seemed phased by the small-town turnings. Rather, the daily doings deepened the bond among the townspeople and gave meaning to their everyday lives.
Unfortunately, we don’t live in an Andy Griffith world. Our lives are complex, time-crunched episodes. We wear more hats than Sheriff Taylor ever imagined! This is especially true if you own an agency supporting the retail automotive dealer market.
The World Is Changing Faster.
According to an industrywide survey in 2017, 96% of agents feel that “the world is changing faster” than their agency. There are numerous factors contributing to this whirlwind feeling. A cultural change is happening to the agent and dealer relationship. Job functions within the agency have morphed dramaticall,y and the need for a greater support infrastructure has developed. Taken together, agents are definitely not having many “Mayberry” days.In days gone by, agents met with their dealers infrequently. Products rarely changed and there was little engagement between the agent and dealer in the dealership’s daily business routine. Now we see dealers relying heavily on agents. With softening sales, dealers are looking to back-end profits to cover the gap. Suddenly, the phone is ringing with dealers asking about the best method to market consumer protection products — and where to spend their ad dollars to market those products. But you’re an agent — not a marketing expert! You might be challenged to market your own agency, much less your client’s dealership. Not only are dealers asking about best-practice marketing tactics, they want assistance managing their pre-owned inventory. The large number of off-lease vehicles entering the market has driven up used-car supply, outpacing demand and driving down prices. Dealers are now concerned with liquidating their inventory, knowing more off-lease vehicles will enter the market. The dealer on the other end of the phone wants you to help turn units more quickly, leveraging tools such as market-differentiating products, CPO programs and aggressive pricing models. Wait — what? Now your client wants you to help sell cars too! Dealers are also experiencing razor-thin front-end margins on new vehicles. And while they are on the phone, dealers are looking to their agents to help maximize their back-end profit. Questions about installing market-differentiating products and income development analysis are on the table. To add to the list, dealers also want help with training, compliance and reinsurance. This is crazy talk! I have a small agency and sell consumer protection products! How am I going to meet all of these needs?
Remember the many hats Sheriff Taylor wore throughout the day in Mayberry? Prepare to don many more if you want to retain that dealer customer!
Channel Your Inner Sheriff!
While Andy Griffith may have seemed like a local yokel who didn’t understand the modern world, he was actually one of the smartest characters on television. His demeanor belied a manager who changed with the times and put a team of people together who could help him be successful. To be a successful agent these days, I would encourage you to channel your inner Sheriff Taylor!
If you’re lucky, your dealership clients have called seeking your assistance. You’ve cleared the first hurdle: They consider you a trusted member of their support structure and value your relationship. If you are not having these types of conversations, it’s time to pick up the phone and offer your assistance.
Your dealership clients have challenges on many fronts — too much inventory, maximizing profits, increased competition, compliance, training, reinsurance, etc. While it may not seem obvious, you have products that can help tackle these issues. Haven’t updated your product offering in a while? Now is the time to hear your client’s concerns and supply them with products that meet their needs.
Consumer buying habits have changed dramatically over the past five years. Now, consumers are not only compiling their preferred vehicle specs online, they are selecting their dealership as well. The neighborhood car dealer no longer gets the automatic business. It’s a hypercompetitive environment and those dealers who market themselves effectively will get the business.
Where do you come in? Put on your marketing hat and help your dealership client advertise consumer protection products that will set them apart. Make sure instore marketing materials are up-to-date and customer friendly. Provide digital versions of all materials for use on web and social media platforms. Educate the entire dealership staff on those traffic-driving products to ensure the consumer knows about the products before going to finance. Start the consumer education outside of the dealership to generate more interest and awareness with the end goal of increasing PRU and penetration.
Is your client not offering your products because they don’t know how to explain them? Pull out your training hat and offer some resources. Whether role-playing or more formal guidance, a little training can go a long way in supporting your client and increasing their customer conversions.
Now let’s tackle profits. Your agency has little impact on front-end revenue. But your products can make a big impact on the back end. Research studies have shown that an average dealership can capture a 40% increase in profit by leveraging F&I products on a sale. This adds up and can kick your client out of the red and into the black. But this only works if they have the right products. Not all of your products are a good fit for all of your clients. Consider bundling products or creating unique portfolios for each dealership. The dealer principal will appreciate your commitment to their business as product penetration increases.
As mentioned previously, pre-owned inventory will continue to rise throughout the remainder of the year. In Sheriff Taylor terms, “That creek’s gonna keep rising!” Work with your dealership customers to remove the logjam. Right-size the pricing model, utilize CPO programs, and offer market-differentiating programs that ensure consumers are visiting your customer’s dealership.
While you are heads-down working with your clients, don’t forget to put that compliance hat on as well. Increased sales, PRU and product penetration can all be erased if the dealership violates local, state and federal compliance regulations. Other government bodies such as the Federal Trade Commission and consumer advocacy groups have a close eye on the retail automotive industry. A hefty fine and the possibility of jail time are not worth the potential profit.
Create Your Own Mayberry.
You may be thinking these activities are all well and good — if you had a large agency with folks specializing in marketing, accounting, legal and sales. But you don’t, and the possibility of changing your business model may seem daunting. Remember, Sheriff Taylor had a group of people in Mayberry who served as his “village.” Not everyone was deputized, but they all played a role in keeping the town running smoothly. Who is in your village?
Is your product provider in your village? When you hang up the phone with your dealer client, is your next call to your product provider? If you did call your provider, would they be responsive? Or would you get the Barney Fife treatment? As an agent, you do not have time, nor can you afford to work with providers who don’t have your back. In fact, they should be in front of you, anticipating questions and responding with the right solution.
Let’s look at who can provide training — to your team and your clients. Your provider should be able to effectively train your team and provide training materials that are appropriate for your dealership clients. . This training has proven invaluable and does not require adding staff.
Maximizing profit can be a bit of a puzzle — with each dealership presenting a unique twist. Is your provider savvy enough to develop a plan that works? Or do you feel you’re only getting the blue plate special — every time?
While I know we will never live in a Mayberry-like fairytale world, the life lessons shared in the Andy Griffith world still apply. And adopting a Sheriff Taylor approach can mean the difference between a growing, successful business with prosperous dealer clients ... or crickets chirping ever so loudly.