Great Recession proved to be auto retailing’s innovation lab

In some ways, the U.S. auto industry has never emerged from the shadow of the Great Recession. A generation of young dealers and managers were brutally worked over by the crisis, and shaped and hardened by it.

A heap of best practice was bred out of necessity, as was a Practical List of Do’s and Don’ts.

What had been inclinations became megatrends. Dealers expanded their used-vehicle operations and optimized the service department. Customer relationship management software came into its own.

Analytics-driven equity mining?

“Whatever the fancy hell that is,” a dealer might have said in 2008.

But a decade later the process enables stores to identify customers whose trade-ins could cover a down payment.

The Great Recession also strong-armed dealers into taking the Internet seriously and using it wisely. Lead generation got sophisticated. Online advertising went through the roof.

And dealers wholly embraced the concept of customer hospitality. Such things went from “always a good idea” to “strongly suggested” to “official policy” — all because dealers a decade ago had their backs against the wall.

The pain still lingers, especially for those who lost franchises — pointlessly — to the illogical view automakers had in 2009 that dealers were a cost rather than a benefit.

In fact, it was retailers who held firm in 2009 and 2010. Ten years after, what strikes us is the resilience and ingenuity of those days. The Great Recession turned out to be an innovation lab. Inventiveness stewed. Ideas bubbled up.

It wasn’t easy. A few dealers cleaned toilets and took out the trash. They showed up at 7:30 a.m. to greet customers on the service lane. They worked and worried and brainstormed. They used every entrepreneurial muscle in their bodies and relied on their acute sensitivity to risk and opportunity.

In recent months, we’ve asked dozens of dealers and store managers to describe how they endured the crisis. It was illuminating. In the end we had the feeling that no category of entrepreneur in American business was better equipped for the tangled mess.

The resourcefulness was a sure sign that the franchise system not only still works for franchise holders, but for the entire industry.