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“We finally have a decent supply of new cars on the lot, but my profits are taking a nosedive!” This sentiment is becoming common as the market shifts from a seller’s stronghold to a buyer’s market. While a well-stocked inventory is a welcome change, it also introduces fiercer competition. It leaves many dealers wondering: How can we grow profitability in this new landscape? The answer lies not just in experience but in strategic optimization. This is where dealer consulting partners come into the picture to serve as your strategic navigators, steering your dealership toward success amidst the competitive currents of the market. They diligently analyze market trends, consumer behaviors, and the evolving regulatory landscape to equip you with a robust strategy. The Changing Market Today, the new-vehicle inventory index sits at a record high of 75 (Q1 2024), a stark contrast to the anemic 25 of just two years ago. While plentiful inventory offers some relief, it also presents a challenge: competition. Here’s the reality: a high inventory level shifts the advantage to buyers. Shoppers have options, and dealerships must find ways to stand out in a crowded marketplace. This is where the profitability paradox comes in. While low inventory helped dealerships command higher prices, high inventory shifted the balance of power back to the buyer. Although more cars on the lot typically mean more sales opportunities, this abundance also triggers increased competition and downward pressure on prices, ultimately challenging dealerships to maintain profitability. The result of these dynamics? A new low point of 37 for the overall profits index (excluding the pandemic shutdown of Q2 2020). The Value of Strategic Dealer Consulting: Your Competitive Edge Dealer Consultants go beyond experience, offering data-driven insights into market trends, consumer behavior, and the ever-changing regulatory environment. Think of them as tailored strategists. They work hand-in-hand with your dealership, identifying your unique strengths and areas for improvement. Whether optimizing marketing campaigns, streamlining sales processes, or maximizing used car profitability, dealer consultants could provide the solutions and expertise needed to thrive in a buyer’s market. Three Ways Dealer Consulting Partners Drive Dealership Success 1. Adapting to Market Dynamics and Consumer Behavior Dealer consultants help you understand the shifting sands of the market and consumer preferences. This allows you to adjust your approach, tailoring your offerings and messaging to resonate with today’s buyers. Dealer consulting partners are your gateway to a wealth of knowledge and resources beyond your individual experience. For example, the PRO Team supports dealers’ success by providing access to advanced tools like active shopper networks, which utilize sophisticated data analysis to link a shopper’s online activities with the real person behind the screen. This, in turn, translates into invaluable insights for your dealership, such as: Knowing exactly who’s in the market for a new car right now within your target area. Targeting potential customers by name and contact information, not just demographics. Gaining insights into the specific makes, models, and features shoppers are actively researching. Analyzing shopping behavior and intent, including days spent researching and online activity intensity, to determine how serious a potential customer. Discover what car the shopper currently owns and their service history, allowing you to tailor upgrade or service package offers. 2. Uncovering New Profit Centers and Plugging the Leaks Beyond the traditional focus on sales, dealer consultants can help you identify hidden revenue streams and capitalize on emerging trends. Let’s look closely at your Finance & Insurance (F&I) department. Think of your F&I department as a leaky bucket with missed opportunities. Customers who decline extended warranties, GAP insurance, or other coverage represent lost revenue. Dealer consultants can help you identify these “leaks” and implement strategies and tools to capture every potential revenue opportunity. Take, for instance, targeted follow-ups. Not every customer makes a final decision on the spot. Consultants can help develop targeted follow-up strategies, like personalized outreach- emails or texts, to re-engage customers who initially declined coverage and address any lingering concerns. What tools do you currently have in place to effectively capture these missed opportunities? 3. Build a “Why Buy Here” Advantage In a crowded market, differentiation is critical. Dealership consultants play a significant role in helping craft a compelling value proposition, highlighting unique offerings, and creating a customer experience that sets your dealership apart. They can help you explore extended warranties, loyalty programs, or other value-added services that make your dealership the clear choice for buyers. One such area is the development of a well-crafted loyalty program. Imagine transforming your dealership from a one-time transaction into a trusted partner. Dealer consultants can guide you in crafting a program that becomes a selling proposition, offering a tangible and appealing reason for customers to choose your services over the competition. Your Path to Success For more strategies to enhance your profitability, cultivate high-performing teams, and pin down holes in your revenue streams, connect with your PRO Team. We’re ready to work closely with you to understand your dealership’s unique challenges and opportunities and develop a tailored action plan for growth. Connect with us today to start your journey toward enhanced profitability and market leadership.

As a Sales or F&I Manager, the journey toward excellence begins with a commitment to mastering essential skills. These aren’t just tools of the trade; they’re the building blocks of a thriving career and a stepping-stone to leadership roles. Imagine navigating every negotiation with finesse, turning every customer interaction into a relationship, and leading your team not just to meet goals but exceed them, positioning yourself perfectly for the next big leap to senior management. Ready to transform your approach and climb the ladder of success? Let’s explore the skills for sales and F&I that make greatness and leadership possible. 1. Negotiation: The Fine Art of Deal-Making Negotiation isn’t just about settling, it’s a complex art that demands strategic empathy and assertiveness to achieve optimal outcomes, ensuring your interests are well-served while fostering strong, lasting relationships. Start by understanding your client’s needs and frame your pitches around their pain points. Be ready to improvise—flexibility can lead to better outcomes than rigid goals. Effective negotiators are also attentive listeners; they pick up on cues that can lead to sealing a deal that sticks. For those aspiring to roles such as General Manager in a dealership, this skill becomes crucial. It extends beyond the sales floor to encompass broader responsibilities, such as orchestrating team dynamics and navigating complex relationships with lenders—ensuring smooth operations and sustained growth. Additional resources Article: HBR: Emotion and the Art of Negotiation Book: “Never Split the Difference: Negotiating As If Your Life Depended On It” by Chris Voss. 2. Customer Relationship Management: Connect to Elevate Personal connections are currency in a world where everyone is bombarded with options. For Sales and F&I managers, aspiring leadership roles, managing relationships is more than remembering names and faces; it’s about crafting personalized and attentive experiences. CRM tools could help keep track of customer data, analyze trends, and anticipate needs before they are expressed. In addition, customizing interactions to build loyalty and advocacy, all of which are vital for a leader’s success. Digital tools now streamline this process, allowing to proactively update customers on upcoming maintenance and other service needs without overwhelming them. These technologies not only facilitate the tracking and analysis of customer data but also anticipate needs before they are articulated. Our Global Program enhances this approach by offering a robust solution for sending timely updates and outreach that ensure customers feel valued and respected, fostering loyalty and turning them into advocates—key outcomes for any leader looking to sustain growth and smooth operations. Additional resources Article: HBR: CRM Done Right Book: The Relationship Economy: Building Stronger Customer Connections in the Digital Age by John Di Julius. 3. Financial Analytics: Numbers That Narrate Stories Leaders need a robust grasp of financial analytics to make informed decisions that will drive the business forward. Sharpen your ability to interpret complex data, forecast trends, and make decisions that align with your department’s long-term goals. Collaborating with strategic partners to meticulously analyze which products will most benefit your lineup can significantly enhance your Per Vehicle Retail (PVR). For example, introducing a pre-load product with an exceptional penetration rate that customers quickly recognize as valuable—versatile enough to be offered across multiple departments, non-cancelable, and effective for both new and used vehicles—can help grow about $350 per vehicle. This capability is indispensable for those looking to influence the financial direction of their dealership and ensure sustained growth and profitability. Additionally, customizing coverage and plans creates a unique value proposition that distinguishes your offerings. Strategic consultants can be an asset in this process, offering supplemental expertise that complements your financial acumen. Their advanced analysis helps ensure that each customized plan not only meets market needs but also aligns with and amplifies your financial objectives, turning data into actionable and profitable strategies. Additional resources Article: Forbes- The Financial Acumen Every Leader Needs To Know If They’re Not A CFO Book: Financial Intelligence for Entrepreneurs: What You Really Need to Know About the Numbers by Karen Berman and Joe Knight 4. Compliance: Playing by the Rules Pays Off Staying within the lines doesn’t have to be dull. Knowing the ins and outs of compliance can be your shield in risk management. Keep abreast of the latest regulations to avoid pitfalls. When compliance is part of your planning, you safeguard your dealership operations and gain the trust of both clients and higher-ups. Additional resources CBT- F&I checklist and tips for better compliance Auto Dealer-F&I Compliance Basics Automotive News- Don’t pick and choose which parts of F&I compliance policy to follow 5. Team Leadership: Leading from the Front Forget the iron fist, lead with a high-five. Leadership of the present time is about empowerment, not enforcement. Cultivate a team culture where members feel valued and motivated to contribute their best. Set clear goals, provide transparent feedback, and celebrate the wins, big or small. Show that you’re all in this together and watch your team’s morale—and performance—soar. Additional resources Article: HBR-What Great Managers Do Daily Book: Leaders Eat Last: Why Some Teams Pull Together and Others Don’t by Simon Sinek PRO Consulting has been navigating the complexities of the auto industry for nearly three decades. With top-notch strategies, an extensive product suite, and comprehensive coverage backed by thorough training, we are equipped to steer your department and dealership onto the path of success. Connect with us today, and let’s embark on your growth journey together!

In the ever-evolving landscape of auto dealerships, diversity isn’t limited to the range of cars in stores; it extends to the workforce as well, encompassing a wide variety of backgrounds and generations. From Baby Boomers to Gen Z, each generation brings its unique flair to the showroom floor. Does multi-generation workforce in dealerships play a role in forming a unified team and catering to a diverse range of customers? Let’s take a closer look, and you be the one to say! Workforce generational breakdown Source: Purdue via John Hopkins From Boomers to Zoomers: The varied talents each generation adds to the mix • Baby Boomers (Born 1946–1964): Esteemed for their reliability and rich professional experience, Boomers excel in roles that leverage their interpersonal skills and industry knowledge. Their dedication to quality and customer service sets a high standard, inspiring trust and loyalty from both colleagues and clients. • Gen X (Born 1965–1980): Known for their strong analytical skills and independence, Gen Xers are adept at bridging traditional and digital work methods. In addition. they value stability and work-life balance and are proficient at problem-solving, making them invaluable in navigating complex challenges and driving operational efficiency. • Millennials (Born 1981–1996): Millennials value flexibility, growth, and purpose in their work, extending beyond digital expertise to embody adaptability, teamwork, and a strong ethical compass. Furthermore, they champion collaborative environments and sustainable practices, driving positive change and innovation across all facets of the dealership. • Gen Z (Born 1997–2012): Eager for instant feedback and skilled in the latest digital trends, Gen Z emphasizes authenticity and engagement. They bring a forward-thinking mindset focused on innovation and ready to reshape the customer experience with fresh perspectives. The power of age diversity Diverse perspectives: Every generation sees their job roles through a different lens, enriching the dealership with various insights. This blend of experience and fresh ideas pushes teams to innovate and tackle challenges with a well-rounded approach. For example, Millennials grew up during a time of rapid technological change, economic fluctuation, and global events such as the 2008 financial crisis. These experiences have made Millennials adaptable to change and have taught them to navigate change more fluidly and to communicate effectively under stress or in rapidly changing environments. Learning and mentoring opportunities: A multi-generation workforce in dealerships — rich in age diversity offers possibilities for growth. Experienced professionals such as Boomers and Gen Xers can mentor newcomers on the importance of building networks and strong connections that are beneficial for repeat sales. At the same time, younger employees share the latest trends and technologies, creating a continuous learning cycle. In addition, Gen Z acknowledges the value of mentors as they need guidance, and a dealership providing it in the form of a mentorship program could increase the retention of top talent. Connections and well-being: A multigenerational team mirrors a community where connections cross age boundaries, enhancing job satisfaction and fostering a supportive work environment. For example, Gen Z’s understanding of modern wellness practices and resources can lead the way in adopting new stress management and well-being enhancement strategies, benefiting teams across all generations. Navigating challenges of a multi-generation workforce in dealerships Negative Stereotypes: In a dealership, stereotypes can hamper the seamless flow of ideas and sales strategies. Cutting through these preconceptions with open minds and valuing what each generation brings can lead to a more united and productive team ready to meet the diverse needs of our customers. Communication issues: Effective communication is the cornerstone of any successful team. Recognizing and adapting to the preferred styles of different age groups bridges gaps and enriches our interactions, making for a more cohesive and innovative team environment. For example, Gen X responds well to straightforward communication and values autonomy — avoid micromanaging them for optimal engagement. Varying work styles: Embracing each generation’s work style allows us to transform potential conflicts into collaborative strengths. This flexibility leads to a more dynamic and adaptable work environment with practical approaches to problem-solving and attaining common goals. For example, Baby Boomers and Gen Xers are known for their rugged individualism and hardcore work ethic, and Millennials and Gen Z value flexibility and wellness. Tips for harnessing the power of diversity Kick off your sales meetings with a motivational touch—share a brief, inspiring anecdote or a quick video (5-10 mins) tailored to engage your team’s diverse attention spans. Follow up with a swift questionnaire to capture the thoughts and motivations of your team, reinforcing their ‘why’ and focusing their attention. Furthermore, this practice boosts morale and sharpens customer interaction skills. Remember, while technology enhances our capabilities, nothing beats the impact of genuine, in-person communication in the dealership environment. Additional Exploration: For those looking to improve focus and foster deeper thinking in our distraction-filled world, check out the book “Stolen Attention: Why You Can’t Pay Attention and How to Think Deeply Again.” This book offers insights into reclaiming our ability to concentrate and think critically, an essential skill set for thriving in today’s fast-paced auto industry. What matters to shoppers of different age segments Turning our attention from the dealership team to the showroom floor, let’s explore the broad spectrum of multigenerational customers stepping through our doors. Notably, delving into their unique purchasing habits and what drives their decisions offers valuable guidance for tailoring our sales tactics, marketing messages, and overall customer experience. Key buying factors: • Price and Features: Price emerges as the top consideration for vehicle purchasers, with 22% of respondents prioritizing it over other factors. Reliability follows closely at 18%, with safety considerations at 16%, underscoring cost and dependability as critical in the buying process. • Vehicle Type: Preferences vary significantly with age; 82% of U.S. auto shoppers lean towards gas-powered vehicles, particularly older demographics. However, when it comes to size, 56% are eyeing larger cars like SUVs and trucks. Meanwhile, the likelihood of considering an electric vehicle purchase spikes by over 67% among those open to buying within three months. Although older consumers (55-64 years old) show 30% less

The auto industry is steering through a terrain marked by increasing loan rates and delinquencies, facing the dual challenge of maintaining profitability while uncovering ways to assist consumers in purchasing the vehicles they desire and need. Dealerships dedicated to reducing financial stress for buyers, particularly auto loan delinquency, and enhancing customer service are adopting innovative financial strategies and prioritizing the customer’s needs. Let’s explore how beneficial financial solutions and a strong commitment to service play a vital role in fostering mutual benefit for both customers and dealers. Interest Rates Hit the Brakes on Affordability With inflation impacting every sector, the auto industry is grappling with its own set of challenges. The Federal Reserve’s efforts to control inflation by raising interest rates have escalated the cost of auto loans, adding another layer of pressure for car buyers. Coupled with lingering pandemic-related supply chain disruptions, vehicle prices have soared. Last month, the average new car loan rates jumped to an alarming 9.7%, up 130 basis points year-over-year (YOY), making car ownership a dream out of reach for many. Additionally, Cox reports that the average loan rate for used vehicles escalated by over 30 basis points, surpassing 14%—a notable surge of 120 basis points YOY. This rise in loan rates for both new and used vehicles significantly strains prospective buyers, further complicating the path to car ownership. Auto Loan Delinquency on the Rise The financial squeeze isn’t just a perception; it’s a reality reflected in rising delinquency rates, particularly among younger and low-income borrowers. F&I Showroom reports a concerning trend: nearly 8% of auto loans were delinquent by the end of last year, with serious delinquencies—those 90 days or more overdue—increasing to about 2.7% from the previous year. These statistics are a stark reminder of the real challenges people face in maintaining vehicle ownership, underscoring the need for adequate financial solutions and support. Shifting Gears: Solutions on the Horizon Strategy #1: Easing the Financial Burden Customers find themselves in a challenging position, caught between historically high prices of new vehicles and used vehicles pricing that, despite a slight decline, still hover near all-time highs. Compounding this challenge, lenders are tightening their belts, limiting both the terms and the amounts they’re willing to finance, which adds another layer of difficulty for buyers. In this tough spot, BudgetCare stands out as an affordable coverage option. It provides a cost-effective solution for consumers seeking protection against costly repairs, while also enabling dealers to offer quality coverage at a reasonable price, maintaining profitability. This approach assists customers in navigating financial constraints and enhances dealer offerings in a competitive market. Strategy #2: Smart Financing Options Finance and Insurance (F&I) teams play a pivotal role in the car buying journey, serving as financial navigators who champion the financial well-being of customers. By utilizing their deep knowledge and innovative tools like Smart Payment Solutions, F&I experts are equipped to craft personalized, sustainable payment strategies that enhance vehicle affordability. This method leads to manageable monthly payments, alleviating financial pressure for buyers. In turn, it cultivates a more sustainable ownership experience and improved cash flow for dealerships. Driving Innovation and Affordability in Auto Ownership In these turbulent times, the auto industry continues to forge ahead, embracing innovative solutions that ensure peace of mind behind the wheel. This move towards greater affordability is multifaceted. Coverages like BudgetCare ease the burden of unexpected repairs, whereas dealership teams draw on their expertise to help create personalized payment plans. This dual approach mitigates financial stress for consumers and enhances the value provided by dealerships, making vehicle ownership more accessible and manageable for a wider audience. Your Partner in Profitability With over three decades of experience in the auto industry, our commitment to supporting dealerships with strategic insights and tools remains unwavering. By fostering partnerships and sharing knowledge, we strive to enhance profitability and deliver value to dealers and consumers. For those interested in exploring how these strategies can be implemented to navigate the current economic challenges and auto loan delinquency, our PRO Team is ready to share our expertise and become your partners in profitability. Let’s connect to discuss your specific needs.  

As the final miles of 2023 unfold, dealerships find themselves at a critical juncture, headlights illuminating the road ahead into the promising expanse of 2024. The automotive industry has left imprints that demand attention — patterns that offer valuable insights for dealerships crafting their course forward, like road signs. Unveiling the changes and opportunities, we explore three defining trends shaping the course of automotive progress and influencing dealership success for the approaching journey in 2024. Source: Experian Automotive VIO as of September 30, 2023 (all motorized, road-registered vehicles) | Automotive Market Trends Q3 2023 Surging New Vehicle Registrations and Shifting Preferences In the rearview mirror of 2023, the automotive industry reflects a notable surge in new registration volumes, charting a course toward 14.9 million annualized registrations. Additionally, this upswing, marking a robust 12.7% increase from the prior year, underscores a shift in consumer dynamics and preferences. A clear trend stands out: more people are buying utility vehicles, making up a significant 56.9% of all new vehicle registrations. As we navigate this trajectory, another noteworthy detail is that gasoline vehicles continue to exert influence, showcasing year-over-year volume growth in U.S. light-duty vehicles. Therefore, these changes prompt dealerships to reassess their methods. Furthermore, a need to adjust strategies to better align with the changing preferences of consumers in the automotive industry. Used Vehicle Trends: Navigating Decline and Crafting Profitable Strategies In contrast to the surge in new registrations, the landscape for used vehicles tells a different tale. Registrations for used cars continue to decline, down 2% from the previous year, amounting to 29.3 million. Notably, the decline can be attributed to a confluence of factors, primarily characterized by low volumes and escalating prices. In response, dealerships can explore promising avenues such as Finance and Insurance (F&I) products, offering tangible value to customers while enhancing profitability. Furthermore, diversification emerges as a critical strategy, allowing dealerships to broaden their revenue streams across a more extensive customer base. This shift mitigates reliance on a few high-margin sales, paving the way for a sustainable and profitable future. Source: Experian Automotive VIO as of September 30, 2023 (all motorized, road-registered vehicles) | Automotive Market Trends Q3 2023 Sweet Spot Vehicles: A Growing Market and Service Opportunity The aftermarket “Sweet Spot” flourishes, boasting a volume of 103.2 million with projected growth until 2026. Within this sweet spot, vehicles from model years 2012 to 2018 show a notable 4% increase from 2022 and a significant 22.9% surge from 2019. This scenario highlights an opportune market. These vehicles are advantageous for dealerships due to their position beyond general OEM warranties, primed for additional services.  Moreover, as these vehicles age, the likelihood of requiring part replacements and services increases. As a result, this provides a chance for dealerships to cater to sweet spot vehicle owners through their service departments. This ensures a steady stream of revenue and establishing a meaningful connection with a growing market segment. Staying Road-Ready for Dealership Success in 2024 Preparation for 2024 demands a strategic focus on productivity, sales growth, and enhanced profitability within pivotal profit centers like F&I and Service departments. In addition, staying attuned to dynamic industry trends is crucial. Ensuring personnel are equipped with the latest industry knowledge and skills through continuous training. Cultivating a culture of ongoing learning and training positions the dealership for success as the journey toward 2024 unfolds. Steering Dealerships towards Success in 2024 In the dynamic landscape of 2024, it’s crucial for dealerships to adapt and thrive. We are deeply attuned to the industry’s specific challenges and trends. Leveraging our specialized expertise, we stand as a pivotal strategic partner, uniquely positioned to guide you through these dynamic changes in the automotive world. Connect with us to explore how we can bring decades of experience, crafting a tailored Profitability Improvement Plan. We are prepared to work with you to elevate your dealership’s success in the coming year. Let’s navigate the road to prosperity together. Data and charts credit: Experian

The automotive landscape is shifting due to affordability, increasing interest rates, and supply chain issues. The average age of cars and light vehicles in operation (VIO) in the United States has risen to a new record of 12.2 years. With a shift in the automotive landscape where buyers are holding onto their vehicles longer, dealerships are pivoting their focus to the service department to maintain profitability. But the critical question is how do you turn your dealership into your customers’ top choice, ensuring they stick around and never think of servicing elsewhere? Hence, implementing a well-crafted Dealership Loyalty Program, with its myriad benefits, not only streamlines boosting retention but also invites customers to be part of something special. Here are five reasons why dealership loyalty programs are a game-changer: 1. Elevated Service Engagement and Doubled Spending Loyalty program members visit the dealership’s service department almost twice as frequently, ensuring a consistent and proactive approach to vehicle care. What’s more, they not only visit more often but also contribute to a robust spending culture by doubling their expenditures compared to non-participants, a study found. It’s more than loyalty –a dynamic partnership that elevates service standards and financial gains for customers and the dealership. 2. Setting Your Dealership Apart from the Competition Setting your dealership apart is crucial in a highly competitive automotive landscape. A well-crafted loyalty program becomes your unique selling proposition, providing a tangible and appealing reason for customers to choose your services over competitors. Moreover, it’s not just about the vehicles you offer; it’s about the comprehensive experience you provide. Our loyalty program ensures your dealership stands out as a customer-centric destination, fostering a sense of exclusivity and commitment that competitors can’t match. 3. Crafting an Impressive Online Presence for Your Dealership In an era dominated by digital presence, standing out online is as vital as making an impact in the physical market. A robust loyalty program enhances your dealership’s online reputation, attracting and retaining customers in the virtual realm. Additionally, loyalty programs use targeted strategies like email and print marketing, exclusive online offers, and personalized interactions to position your dealership at the forefront of the market. It’s not just about visibility; it’s about creating a presence that reflects the exceptional value and service awaiting customers in person. 4. Attract and Retain Customers A dynamic loyalty program acts as a powerful magnet, drawing in new customers and creating a gravitational force that keeps them coming back. The allure of exclusive benefits, personalized offers, and a sense of belonging motivates potential customers to choose your dealership over others. Moreover, once they experience adequate service and perks, they become part of an exclusive community, fostering long-term loyalty. It’s not just about attracting foot traffic; it’s about building a customer base that remains loyal to your dealership, generating sustained success. 5. Enhanced Customer Satisfaction & Boost Referrals Elevate customer satisfaction to new heights and watch it transform into a powerful marketing tool. Furthermore, a well-implemented loyalty program ensures that every interaction with your dealership is not just a transaction but a delightful experience. Satisfied customers become your advocates, sharing their positive experiences and exclusive benefits with friends and family. This organic word-of-mouth marketing drives referrals, expanding your customer base without hefty advertising costs. An expertly crafted loyalty can help you increase sales and repeat business. In addition to those benefits, the Global Loyalty Program by our parent company, Portfolio, elevates reinsurance premiums across departments and empowers you to launch a marketing campaign that maximizes associated risks, propelling your dealership success to new heights. Additionally, it improves CSI scores by delivering tangible benefits to your customers and can be tailored for lease vehicles. Connect with us today to explore how this loyalty program can significantly enhance your dealership’s profitability.