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Good Habits Are Made in The Bad Times: Helpful Ideas for Automotive Dealers during the COVID-19 Crisis.

By Ken Rosenfield, CPA and Scott Lewis, CPA, MSA

Sometimes, the only silver lining in a crisis is that good habits and innovative ideas spring forward for those willing to make the necessary changes. We have been actively discussing with our dealer clients how to best react and have developed some ideas to work through this current crisis. Here are some of the best ideas categorized by department and administrative issues.

Sales

This is a great time to “one up” Carvana. Franchised dealerships are in a better position to sell cars online and to fully consummate the sales transaction.

  • Enhancing your technology to sell over the internet and finalize finance contracts is at the highest priority. Each state has varied laws for unwinding such deals and customers generally are given a little more latitude in number of days to withdraw from the transaction, which differs if the contracts are signed in house. A great delivery service and time spent going over the attributes of the vehicle will create higher CSI scores and more quality customer time.
  • Increase your web and community presence! This is a great time to show community support to customers in need of assistance by delivering medical care goods or taking people who cannot drive at the present time to doctor appointments in courtesy vans.
  • Some manufacturers are increasing incentive plans, consider taking upcoming plans into effect in preselling vehicles.
  • With BDC centers having a high concentration of staff in a small space, consider working in shifts if they come into your dealership or utilize your technology and allow them to work remotely. This is also a good time to utilize effective methods and media in marketing such as text messaging, social media and direct to customer contacting. Customers will be at home utilizing social media more than ever or watching television. Be where your target market will be, on social media.
  • Use web technology to show off your inventory. A virtual tour of a vehicle using Facetime or a similar application with a potential customer is almost as good as actually being there. And, it is more customized than a pre-made video. Also consider offering test drives at customers homes.
  • Manage your incoming inventory and ordering of new vehicle stock. Trim used vehicle inventories by having your own remote auctions and consider reducing rental vehicle stock by selling them off at discounts.
  • Manage your relationships with financial institutions for both direct and indirect lending. Make sure you are taking advantage of all their volume discounts and that they are buying deep. Monitor the activity of who is working hard during these times at these institutions.
  • Make sure that your technology is leading edge and robust! This is the time for speed and agility to ensure you are reaching the maximum potential audience. Work with your advertising and marketing consultants to maximize exposure, and ease of communication. Good time to train and empower staff for addressing questions on the internet and via phone and video ups, as in person visits will deteriorate rapidly.
  • When the crisis does subside, be prepared for pent up customer demand. This has happened before and many dealers were not ready. Make sure your personnel are assembled, and access to vehicle inventories are available. And keep the best practices learned at hand. This will be the new normal!

Parts and Service

  • This is the time to step up and offer concierge service lanes. Have customers prepare pre repair orders online and schedule appointment times to either drop off their vehicles and wait in sanitary spaces or be taken home in secure, safe vehicles. Or better, yet, pick up and deliver their vehicles where the dollars make sense.
  • Consider offering mobile repair vehicles to perform services at your customer(s) residence(s). It may even be possible to uplift hours per repair order as a customer can comfortably wait at home. Customers can pay for the vehicle repairs online, or if proper security measures exist, have them pay the technicians while they are at their homes.
  • Create an app for customer personal cellular devices to schedule service appointments and pay for them on their mobile phones.
  • Advertise various oil change (or other service promotions) days in neighborhoods and schedule them in advance to maximize the time spent in an area. Providing online coupons to offer discounts on other services may provide an uplift in hours per repair order, as well.
  • Work with other dealerships that may have parts in stock that you may not carry regularly but need to have available and consider pooling your parts inventories.
  • Consider having your technicians work in shifts to provide a work area that is less prone to infection and crowding. Having parts delivered to the work bays in advance of working on vehicles will also eliminate contact among staff and increase efficiencies.
  • Use your own laundry, or have the technicians clean their own uniforms and compensate them some. This will save money, time and less risk of coming into contact with viruses.
  • Adjust the parts ordering system to make sure that inventories will not be overstocked and no unnecessary parts are ordered. If parts are on special order, find ways to get them into customer vehicles as they may end up sitting longer than normal.

General Office and Administrative Staff

  • Ensure that your office staff is not only cross trained but are fully able to staff alternative desks and functions if necessary, in the event an employee is let go or becomes ill. This is a great time to make sure your staff is prepared.
  • Adjust pay plans and hours for staggered work environment to ensure that you do not lose your most valued employees.
  • Review all internal control processes in place and adjust if necessary. For terminated employees, make sure that they are taken off your IT systems. Control all disbursements and liabilities that arise.
  • Work with vendors to reduce office and shop supply shipments, HR requirements, advertising contracts and other items that would cause increased expenses or cash flow burdens.
  • Keep your staff, vendors and customers aware of your plans and how you are addressing the situation, they need to hear from you.

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