Thursday, January 15, 2009

What Will Happen with Less Dealers?

Estimates are that there will be somewhere between 25% to 60% less dealers by end of 2009. That means less stores, dealerships, outlets and salespeople to buy cars, planes, boats, toys, appliances, and other products and services from.

This could be good. Before I share why I feel that way, I want to stress that I am a fan of good dealers, distributors, sales channels, etc. In fact, I think the good ones should be rewarded with the opportunity to represent bigger markets and sell more products and services at a higher level to more customers.

Years ago, my company helped Audi create and launch a dealership sales specialist program. First, my brave client reduced the number of dealers by 30%, which concerned his boss. Then we did the unthinkable. We appointed only one salesperson per remaining dealership to specialize on our product, Audi. Let's do the math...less dealers, way less salespeople. Sounds like a disaster waiting to happen.

Amazing things happened. Sales went up. Salesperson retention went way up. Customer satisfaction skyrocketed. Profits leapfrogged.

It seems that having one dedicated salesperson (at 30% fewer dealerships) who acted as if they "owned" the Audi franchise was superior to having hundreds of salespeople (some engaged, others disengaged) at hundreds of dealerships (some dedicated, others not) "playing the field" trying to sell whatever brand was easiest to sell at the moment.

What can happen if thousands of dealers disappear? A lot, if the ones that remain are the focused, passionate ones.

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