Issues that dealers are facing as part of COVID-19

Powersports Business contributor and Spader 20-group facilitator Mark Sheffield provides his latest insight on dealership operations during COVID-19.

Most of the dealers I know are an optimistic bunch. In early March, many of my friends thought that business would be tough for a short period of time, then we would get COVID-19 under control and business would return to some semblance of normal.

Most everyone got it wrong.

Business was off for a short period of time, and then suddenly we were the recipient of Willy Wonka’s golden ticket. Who would have thought that our industry was the perfect preventative for contracting COVID-19? We force social distancing to happen. Within a couple of weeks, most dealers were busier than ever before, with some locations even running out of inventory. Not what we expected. Not even close.

Some areas of the country appear to have a handle on COVID-19, while others are seeing an exponential increase in new infections. I have heard some pundits talk about the country being in the second wave, but in June the rate of new infections only dipped to about half of their peak. Not that it changes anything, but I would argue that we are still in the first wave, and I think we will be here for the foreseeable future.

Many dealers have formulated plans to deal with the challenges they expect to see in

the coming months: How to manage customer flow when the showroom is open at a limited capacity; What to do if we must return to closed doors and/or appointments; Managing the health and safety of our teams; Dealing with belligerent customers who do not respect dealership policies (and as I would say, who do not respect themselves). And the tough one, what to do when member(s) of the team contract COVID-19.

Regardless of all the planning, it is tough to prepare for those first positive cases. That news will travel through your dealership faster than a sonic boom, and it will create situations that are not covered in your contingency plans. Here are some of the issues dealers have told me they are dealing with:

  • Losing ALL the employees in a department to quarantine (how badly do you need your technicians, or sales staff?)
  • Spouses not wanting their husbands and wives to return to work
  • A mass exodus of employees leaving the dealership to get tested
  • For fear of contracting COVID, customers not wanting to do business with the dealership
  • Staff quitting on the spot and going home
  • Managers so busy dealing with employee issues that they cannot even complete the simplest of tasks
  • Being unable to obtain enough PPE for their employees and customers
  • Testing either being unavailable, or with wait times exceeding 7 days

With what I have learned in June and into July, my guidance to dealers has been simple and consistent. Sit down with your management team and develop contingency plans for the issues and problems that you envision having to confront during the second half of 2020. Then, when you are done, go back and ask yourself “What will we do if things are way worse than we thought they would be? Much, much worse?”

The dealers who have developed strategies that can quickly be deployed to deal with unique events are the ones best positioned for both short-term and long-term success.

For some dealers, those contingency plans will never see the light of day. For others, the ink on the paper will not have had a chance to dry before they are needed. It is better to plan for those worst-case scenarios rather than turning a blind eye to the possibility of them happening and having a team that does not know what to do when they occur.

Hoping that your business will survive this pandemic is essentially planning to fail. As I tell the dealers in 20 groups that I facilitate, “Hope is not a management strategy that I can endorse.”

Mark J. Sheffield is a U.S. Army Veteran and former dealer principal who currently facilitates multiple 20-groups for Spader Business Management. Contact him at MSheffield@Spader.com.

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One comment

  1. Mark,
    Another great write up. In the last 2 months I have visited 30+ stores in 4 states and have seen some interesting situations. Some stores are 100% appointment only while others are acting as if there is no COVID 19 at all. All stores are reporting excellent to record breaking sales volumes. The one thing that has me caught off guard is that some stores so focused on the new unit sale that they are not asking for, or pursuing the trade. This market will push buyers into the private sector, the more trades that are not taken in, the greater the opportunity that a dealer loses out to a private party transaction. Work every deal as if it is 2012. You will increase your margins today while protecting your market tomorrow.

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