How Auto Dealers are pivoting and creating new income sources in the modern age
Dealers in the current era are faced with challenges that the past never saw:
Exploding expenses, rising labor costs, supply and land costs, as well as the ever evolving competitive landscape within the automotive sales sector.
So what to do to keep investors happy and more importantly, keep the lights on day after day?
Just like any business, cutting costs is usually the low hanging fruit. Although not always a comfortable strategy (sometimes cutting costs equals cutting people) is usually something that can be implemented quickly and have a direct and immediate benefit (adding more profits).
What about more revenue? Sales, service department, parts…where is it normally easiest to gain revenue?
Sales can often be tweaked and improved on by leveraging better online presence, since most auto dealers are still evolving and learning the online consumer and how to convert them. But often the greatest gains for a dealership are through the service department. Expanded services with proper promotion techniques make quick gains when tweaked well.
In house wheel alignment services, recon services such as PDR, tire sales are all great ways to add substantial dollars to the bottom line. Some stores have added $xxx,xxx to their monthly service income with the aforementioned, and that is just the tip of the iceberg with additional service menu’s.
Want it all? No problem:
A) Slash costs by weeding out unnecessary staff, bring recon in house and cut vendor waste (bloated pricing schemes).
B) Bring value added services that are customer centric and will not only add more revenue, but add a recurring revenue scenario since most of these services are on a schedule and can be automated via customer email outreach etc.
By cutting costs and adding revenue that currently already is ready and waiting in your service drive, you can substantially affect the bottom line without spending a ton more in marketing dollars.
About the author:
Brian Jump is the chief Big Toe at SAI Recon Training at http://nodents.com SAI helps dealers convert outside vendors
to in-house programs to maximize revenues and keep dollars in-house.
For more info contact Kristine Rivas, SAI Training Coordinator at 1–888–992–3464