Five habits of successful Dealer Principals

Man talking on mobile phone in the office

A successful Dealer Principal is that rare business leader who can balance the needs of customers, employees, OEMs and commercial partners and, of course, ensure the business they run remains profitable.

Succeeding in an ever-changing industry is a tough ask. But high-performing Dealer Principals are able to find a way to bolster staff satisfaction, deliver on their dealership’s promise to customers and confront the many challenges thrown their way. Though not an exhaustive list, here are some of the habits they have in common.

1/ Prioritising communication skills to capitalise on opportunities

It should come as no surprise that effective communication plays a pivotal role in dealership success.

A study by call analytics firm Marchex of 300,000 inbound phone calls showed that at least 28 per cent of people who called a dealership go on to purchase a vehicle1. The finding reveals that inbound calls remain an important touchpoint in the path to purchase for customers.

The same study also revealed that almost 1 in 5 phone calls to a dealership goes unanswered, each of which could have been a new lead.

Dealer Principals know that having good communication skills is only a starting point: they have to be put to use. Reaching out and responding to customers during those first touchpoints can make a big difference in building a successful dealership.

2/ Identifying and promoting their dealership’s point of difference

Car buyers don’t typically need many excuses to shop around for their next car purchase. A CDK Global study of over 1,000 buyers found that over two-thirds (68.6%) visited two or more dealerships before purchasing their vehicle2. The study also indicated that as many as 71 per cent of buyers had not previously purchased from the same dealership before.

It’s worth remembering, though, that a customer may purchase from you if they feel they have received exemplary service. Our 2021 research into the second-hand car market revealed that Australians find the process of purchasing a second-hand car privately overwhelming and confusing, despite countless hours researching3 – and this presents an opportunity for a good dealership to stand out.

The best Dealer Principals give their customers a reason to come (or come back) to their dealership by offering a level of customer service they just can’t find elsewhere.

3/ Implementing formal talent management practices

Management consulting firm McKinsey & Company examined top car dealerships in the United States to determine what separates them from the also-rans4. It found that rigorous talent management practices, such as structured recruiting and multiple interviews for each candidate, were an important differentiator when it came to dealership success.

In an industry where the movement of sales staff is high – estimates put the average annual turnover of sales staff at 74 per cent2 – the McKinsey & Company study found top performers had significantly lower turnover rates.

It’s critical to hire quality employees to represent your business. Putting consistent talent management practices in place, and involving high-ranking managers in the hiring process, can help attract the right staff and reduce employee churn.

4/ Empowering their team

Once a dealership has hired high-performing talent, it keeps them for the long haul by empowering them to do their jobs.

Effective Dealer Principals are clear about what they expect from their staff and hold them accountable, but trust them to make correct decisions. And they equip their teams with the tools and training to make the right decisions.

Bringing in experts from outside the dealership to support training programs can be a quick way to boost the team. It’s worth reaching out to service providers and business partners who may offer online training guides or other resources, to help ease the pressure of you delivering training on your own.

5/ Setting goals and making informed decisions to achieve them

Dealerships may have goals set for them by their OEMs and corporate offices. But they also need to articulate objectives for each of their departments to strive for – and be flexible enough to adapt business strategies when required.

With so much data now available, effective Dealer Principals prioritise the integration of their dealer management system with CRM, lead management, digital campaigns and other functions so that every single data touchpoint is housed together. That way they can use these insights to gain a clear view of which customers to contact at any given time, monitor customer satisfaction levels, set KPIs for each department, deliver stock efficiency improvements and more.

Implement a strong data-driven strategy alongside the other habits of successful Dealer Principals and you’ll have taken significant strides towards putting your dealership on top.


This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 (“Allianz”). Information contained in this article is accurate as at March 2022 and may be subject to change. In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. Any opinions expressed constitute our views at the time of the issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.



1 New Auto Industry Study: 28% of Consumers Who Call a Dealership Will Purchase a Vehicle – Marchex, January 2019

2 Collaboration: The Key To Driving Dealership Success – CDK Global, December 2021

3 Booming second-hand car market leaves Australians out-of-pocket and overwhelmed – Allianz Australia, November 2021

4 How to build top-performing auto dealerships – McKinsey & Company, June 2007