Three Tips for Car Dealerships to Survive the Recession

Recessions hit businesses hard, period--even necessities become harder and harder

 to sell in times of economic uncertainties. Naturally, industries built on big ticket

 items, such as cars and houses, 

Recessions hit businesses hard, period--even necessities become harder and harder 
to sell in times of economic uncertainties. Naturally, industries built on big ticket

 items, such as 

cars and houses, become particularly affected by the unpleasant climate.

Looking at the car business today, there are no sure-fire answers or guaranteed
quick fixes to overcome the obstacles car dealerships are facing. But, there are

 tried and true principles

 of strategy and management that, if applied and applied well, will surely
 benefit the business.

Tip #1 for Car Dealerships to Survive the Recession: Price it Right

While trying to survive the recession, it's tempting to drastically cut prices to get customers 

onto the lot and into the dealership. Lowering prices can obviously be an effective tool, but

 cutting prices can't fix 

everything. And sometimes, it makes matters worse. It's hard to know how to mentally 

adjust your business' supply and demand curves in a recession, and if you predict wrong, you

 could wind up selling for too low and losing out on profits. The dealerships that have the

 lowest prices in town usually have to leave town.

Really think about what prices are right for your current pieces of merchandise-not too

 high, not too low, but just right. Don't fall into the trap of thinking you can price at someone

 else's lowest today because business will automatically pick up tomorrow. If you have

 drastically different operating costs, supply chain costs, and other logistics fees, you

 can't afford to-as a struggling business-arbitrarily adopt someone else's pricing 

structure and reasonably expect everything will work itself out. To keep away from

 the casualties of the recession, give the topic of pricing in your business a

 great deal of thought.Tip #2 for Car Dealerships to Survive the 

Recession: Differentiate Yourself in the Market

Pricing is one way of differentiating yourself in the car market, but if you 

don't have the best cost structure among your competitors, you can't win on

 pricing. And because really lowering prices changes consumers' expectations in

 the long-run, it's a dangerous tool and should be used with caution.

In order to effectively differentiate yourself in the market, you have to understand

 what it is that would better serve consumers. Do the other dealerships close too

 early, not giving customers the experience they're looking for? If the answer's yes, it

 sounds like you might have a great opportunity to stand out and reach an untapped

 portion of the market. If staying open later isn't an option, or isn't a real benefit

 to consumers in your area, look for another way to differentiate yourself from your 

competitors. What aren't they doing that matters to buyers? Find the answer to that

 question, resolve the problem, and reap the benefits.

Tip #3 for Car Dealerships to Survive the Recession: Keep Customer

 Service at its Best

When thinking about the challenges that face car dealerships, I asked my mom her 

thoughts on the topic--she having, with my dad, a combined total of almost thirty 

years of experience working in the car business. Her one piece of advice is the 

reminder that customers who are just looking today might be in the position to buy

 tomorrow--treat them right.

It's easy to dismiss non-customers, the ones who can't buy and seem to just be wasting

 your time and loitering on the lot. Always, but especially in times of a recession, the 

customer is king. And that includes people who visit the dealership that can't necessarily

 buy a car today. They need to be treated and served just as well as anyone. After all, they

 might be what are keeping you in business tomorrow.