Tuesday, November 12, 2019

Finding Success When the Automotive Market Is Down

Hand holding up lightbulb in front of chalkboard reading 'New Mindset, New Results'
Since the Great Recession, the automotive industry has been on the upswing, but the tides are turning. In 2019, unsold vehicles hit a 10-year high, with automakers and dealers holding on to a 78-day supply. This comes amidst other industry challenges: job cuts, a shortage of skilled technicians, the prospect of self-driving vehicles upsetting vehicle ownership, rising interest rates, and more.

In response to this market shift, dealers are feeling pessimistic about what the future holds for the industry. If you’re in that camp, it’s not hard to see why you feel this way. For a successful 2020 — regardless of what the market does — start with the strategies below.

Look for Untapped Opportunities to Save Money


When you’re strapped for cash, even seemingly small costs can mount quickly. Take the time to evaluate what unnecessary costs or inefficiencies are cutting into your profits. One dealership made the decision to simply offer customers paper cups they could fill at the water fountain rather than providing bottled water, saving $6,000 per year.

If there are tools available to help you address inefficiencies, weigh the investment against the money it’ll save you in the long run. For example, having a documented key control process and using an electronic method for tracking keys can help cut down on the cost of replacing lost or stolen key fobs or even vehicles.

In some cases, you might not need to make any changes to your operations to create more room in your budget. Dealer reimbursements are a great way to recoup money for something you’re already doing. Let’s say your service department offers transportation to customers bringing their vehicles in for warranty work. Some manufacturers, such as GM, will reimburse a few dollars each way for shuttle rides. If your manufacturer reimbursed $5 per ride, that’d be $500 for 100 shuttle rides a month, or $6,000 a year.

Whatever changes you make to help your bottom line, be sure they won’t be detrimental to the customer experience.

Address Threats to Your Revenue and Reputation


Don’t let thieves help themselves to your hard-earned profits or hurt your good name. Protect your business from common types of theft. Some examples include the following:

  • The Craigslist scam, which involves a thief posting a vehicle for sale in an online marketplace and then stealing it from a dealership’s lot once the crook finds a buyer for the vehicle.
  • The key-swap scam, where someone swaps a vehicle’s original key fob for a dummy fob, returning later to steal the vehicle.
  • Organized theft rings, which often target dealerships that keep keys in vehicle-mounted lockboxes or other easily accessible places.

Even if you’re never the target of theft, the benefits of investing in prevention measures such as employee training and secure key control far outweigh the consequences of dealing with the aftermath of stolen keys or inventory.

Stay Positive


You can’t control the market, but you have a say in how you respond to it. In fact, it’s imperative that you stay upbeat in less than ideal conditions. Being positive has a neurological impact, which in turn can increase job performance and employee morale.

In a Stanford University study of how being positive affects children, the lead researcher commented that positivity is as important as IQ to academic success. The group of children who participated in the study were better able to answer math problems, retain memories, and solve problems when they practiced being positive.

Only 25 percent of job success is related to IQ, and optimistic employees have clear advantages over cynical ones:

  • They recognize potential even in a less than ideal environment.
  • They’re motivated to work harder to overcome obstacles.
  • Their creativity flourishes, helping them come up with creative ways to reach their goals.
  • They inspire coworkers to be more successful at their jobs.

To encourage a positive culture, start by increasing employee satisfaction by making sure employees have access to the tools they need to do their jobs successfully, celebrating successes, and leading by example.

What changes will you make to increase your dealership’s success?

Tuesday, November 5, 2019

Don’t Let Employee Turnover Sabotage Your Key Control

Resignation letter in employee's box of belongings
Employee turnover is a topic you’ve likely heard a lot about recently. The total turnover rate — including terminations and voluntary departures — across all industries nationwide has increased each year since 2014. In 2018, the turnover rate reached 19.3 percent — up from 15.7 percent in 2014. In fact, the voluntary turnover rate on its own was at 14.2 percent in 2018.

While it isn’t impossible to reduce turnover in your organization, it can feel like fighting an uphill battle. This isn’t good for businesses, as it costs anywhere between six to nine months’ salary on average to replace a salaried employee.

However, the effects turnover has on businesses is more serious than you may realize. In addition to being expensive, attrition can also create holes in your organization’s key management practices. Here are the three main ways that turnover will sabotage your key control.

Former Employees Retain Key Access


When employees who had access to keys leave the company, failing to revoke access privileges and collect all keys in their possession immediately after they leave is a major risk to your facility. Imagine the damage they could do with a key or two — or even a couple hundred, like a man in North Dakota, who managed to steal 200 apartment keys, as well as 38 garage openers, master keys, and nine vehicle keys from two separate former employers.

While this may be an extreme example, it’s worth mentioning because it illustrates the potential consequences of not having the necessary tools or policies to secure your keys. An electronic key control system would be able to deter ex-employees from stealing your keys, thanks to features like biometric logins and a secure drawer that can only be opened by authorized users.

Once you have a system in place, it’s important to make sure you collect any keys in an employee’s possession when they leave, as well as strip any access they had to the keys on all systems to protect your organization from security risks related to former employees.

Experienced Employees Take Their Knowledge With Them


Another potential problem that turnover causes for key control is when your key control officer/administrator or other experienced employees leave your organization, taking valuable knowledge with them.

Whether an employee had valuable experience and detailed knowledge of key security policies, losing them hurts. But you can do multiple things to help overcome the loss.

One of these things is to document all key control policies, which helps new employees you bring in as replacements (more on that later). To encourage employees to follow policy, you can use an electronic key control system to help enforce your key management protocol. You could start by assigning user access levels for each employee. That way, anyone without access for certain keys won’t be able to sign them out — or steal them.

One final way to ensure you aren’t left out to dry when experienced employees leave is to assign more than one person to be in charge of key control. If possible, you should look at people with more than one year at your company and who are familiar with how things are run.

New Employees Aren’t up to Speed


When you experience turnover and replace the old employees with new ones, the new staff members lack the knowledge about the way your company runs and won’t be familiar with every policy right away. This lack of knowledge may cause them to make mistakes or be slow with decision making. Once again, this is a great example of why you should document all policies and ensure employees are familiar with them.

If you do have an electronic key control system in place already, new employees may experience a learning curve as they familiarize themselves with how your business uses the system. To make this process as smooth as possible, take advantage of all training resources your key control provider offers. These may include best practices guides, live video training, and phone support.

Experienced employees leaving and inexperienced ones coming in make the job of protecting keys a little more difficult, but it doesn’t have to be so hard. If you take the necessary precautions, you can stay on top of the key control game. Just because your employees are leaving doesn’t mean your key control has to go with them.