The jury’s out on the state of the US economy, but most think a recession is coming- if not already here. Unfortunately, recessions are a predictable and somewhat normal part of the modern economy. Even if 2022 isn’t the start of a recession, there are sure to be tight times in the future. For dealerships, recessions can feel like the ultimate curveball and it can be difficult to plan for economic events that are, in their nature, unpredictable. The truth is, with the right mindset and approach, recessions can be a time of strengthening and resilience-building in your operations. Historically, recessions have resulted in some of the most useful innovations. Today we’ll explore avenues you can take to strengthen your dealership and prepare for a change in the market.
Parts and Service
We’re happy to witness a new trend in the automotive industry: dealers are starting to appreciate the value that lies in their parts and service departments and are beginning to support their staff accordingly. This is huge because according to a Cox Automotive survey, 55% of consumers said they “go to a dealership because its service personnel knows their vehicle better.” While recessions frequently see a downturn in new car sales, consumers in turn begin to prioritize car maintenance and repairs to keep their current vehicles on the road longer. This translates to more parts and service requests and repairs. As a matter of fact, the average age of an American vehicle has hit a new record at 12 years and 2 months old, according to data from S&P Global Mobility. To prepare for a downturn, invest in your parts and service department. Getting the right tools, people, and systems in your parts department will be the difference between gaining strength or crumbling in a recession.
Even when recessions hit, folks still need all the same services they needed before. The major difference is in a recession, there is rarely an excess of buyers metaphorically wandering the market looking for the right deal. Customers who already have trusted providers for services are more likely to stay loyal to businesses they’ve had good experiences with and new buyers are more likely to ask for personal recommendations. Client retention, loyalty, and referrals are perhaps the most crucial factor in businesses surviving tough times. If you haven’t already, it’s time for a goal-oriented, systematic, and personalized plan to attract and retain loyal clientele. Start here to build a plan that suits your dealership’s specific needs.
The trajectory of consumer behavior is clear: everything is going digital. From digital dealerships to online parts sales, the avenues for expanding your dealership’s reach digitally are truly endless. Establishing clientele across markets and mediums means a depth of resiliency that can’t be accomplished without utilizing the internet. Ensuring your dealership has a stellar digital marketing strategy will help you connect with buyers across the region and give your dealership a depth of stability.
PartsEdge is the powertool for your parts inventory. Our powerful monthly parts inventory optimization tool was designed by a Parts Manager and a DMS specialist who witnessed the gap between the demands on Parts Managers’ and the lack of resources to get everything done. PartsEdge saves Parts Managers hundreds of hours each year by taking all the guesswork out of DMS management and sourcing setup and optimization and allowing them to focus on creating a successful operation. As a result, our clients see an average 20% drop in total inventory, 15% less idle inventory, a 50% increase in ROI, and a 20% increase in parts sales. If you’re ready to put our parts powertool to work, send us a message! We’ve been helping dealerships for over 20 years and our testimonials speak for themselves.