Auto Dealers Best Practices–Lessons for All Businesses

All business leaders should scan the horizon outside of their own industries for ideas to improve their business.  A recent McKinsey & Co. study, How to Build Top-Performing Auto Dealerships, offers insights that everyone can ponder.  McKinsey consultants found three key factors that differentiate top-performing dealership.  First, top dealerships had lower employee turnover.  (We’ve talked about this many times in the Businomics blog; review my 7 Steps to Better Employee Retention.)  This isn’t just luck; the report cites several different management practices that improve retention.  Second, top dealerships apply various customer retention strategies, such as mailing out service reminders.  Third, top dealers are more likely to be affiliated with manufacturers that provide strong coaching of dealers.

So what if you’re not a car dealer?  Here are some ideas to consider:  reduce employee turnover, improve customer retention, and work with vendors who can help you learn the best practices in your industry.

But don’t just follow these practices by rote.  They may not be the top priorities in your industry.  But if one of these ideas strikes you a worthwhile, give it a trial.  Do a test of specific practices, and look at results with respect to specific goals.  That’s the trial and error economy.