The next trend Pollak cited was service department optimization. Consumers who weren't buying needed to keep their current vehicles running. "This is when the idea took hold that every car that comes in for A, B or C was inspected for D, E and F — in case that work also could be sold," Pollak said.
Tied to that was "the rise of equity mining out of the service lane," Pollak said.
Some dealerships had tried placing salespeople in the service lane before, including the Cadillac dealership where Pollak once worked, he noted. But that practice was neither widespread nor particularly successful. It was the recession and the rise of analytics that allowed dealerships to tap data to know when to pitch sales to folks who came in for service, Pollak said.
Used-vehicle prices had soared, helped by the federal Cash for Clunkers program. But consumers often had no idea what their current vehicle was worth. Equity mining allowed dealerships to identify customers whose vehicles, as trade-ins, could cover a down payment.
Automotive News reporters also noticed an increased focus on service and parts. Before, many dealers we interviewed had paid only lip service to fixed ops. But during the recession, those same dealers were laying out detailed plans to add service capacity.
Third- and fourth-generation dealerships — those which had survived the Great Depression and World War II thanks to service — renewed their emphasis on fixed ops as the cornerstone of their business. Automakers' efforts to expand express-service lanes and insist on service loaners, rather than relying on off-brand vehicles from a local rental agency, gained traction.
Again, this trend picked up steam in the recession and hasn't slowed since. Dealerships have continued to find ways to expand service capacity to take advantage of the increased number of vehicles on the road. And they've expanded the parts and services they sell, most notably tires.
Pollak also remembers the recession as the time when customer relationship management software really came into its own. These programs had been around, but most dealerships "weren't really maximizing them." But with the recession, he said, "Dealers realized, 'There aren't that many people coming in. I've got to really start paying attention to those who did come in.' "
In contrast, the recession put an unfavorable spotlight on lead generation, as practiced by companies such as Autobytel and others, as the be-all and end-all of sales strategies, Pollak said.
"It was the crash that really broke its back," he said. He believes that in the recession, dealers took a hard look at the return on investment of everything they did, and lead-generation services just didn't make it on a price-value equation.
Lead generation, CRM systems, analytics-driven equity mining — all of these point to a sharp rise in the importance of the Internet to dealership operations and a closer scrutiny of what works online and what doesn't.
Here again, Pollak saw it firsthand.
Before the recession, he had been promoting his Velocity theory to dealerships, usually with limited success. The theory is based on an awareness that dealerships no longer hold all the cards in price negotiations with consumers. In an era of Web-enabled transparency, customers know the prevailing price in their market for both their trade-in and the vehicle they want to buy.
Rather than hold out for yesteryear's fat margins on each vehicle, the Velocity approach says dealerships should embrace transparency, price their vehicles appropriately and turn their inventory faster.