If you’re running a car dealership or looking to start one in the future, profit margins are (and will always be) on your mind. There’s a lot of funding needed (and a lot of financial risk taken) when working in car sales industry—so if you’re not seeing healthy profits, there could be heavy consequences for your business and your finances.
In this blog, Skypatrol will give you a few tips for increasing dealership profits, so you can continue your car sales success, or get started on the right foot when your business opens its doors.
Find the top talent.
Cars don’t sell and manage themselves—if you’re going to run a successful and profitable car dealership, you’ll need a trusty group of talented staff members who can drive sales and create positive customer service experiences. The National Automobile Dealers Association estimates that the average dealerships employs 64 people—that’s a lot of positions to fill, manage, and grow along with your business.
If you find the right salespeople and technicians for your dealership, you’re going to get work done faster, have a healthy stream of revenue, and create an atmosphere that promotes positive word-of-mouth references and current customer retention. But if your employees are lackluster, or you’re experiencing a high employee turnover rate, your business operations and overall growth will slow, and you’ll have to spend extra money (and time) to find and hire new employees.
So how do you avoid a high turnover rate and track down the best long-term employees for your business? The key is to have a specific strategy for how to find and hire quality employees, as well as ways to reward and retain the employees who are doing quality work for your business. These strategies dictate the qualifications you require for job applicants, the questions you ask during job interviews, and the ways you train your employees. Once you find the talent and keep the talent, your dealership will on the right road to growth and success.
Create a strong online presence.
Remember when the best marketing tactics for a car dealership were setting up one of those dancing inflatable men and buying a few commercial spots on local television? That time is long gone. Creating a strong internet presence is more important than ever before—after all, where do you think car shoppers are going to research vehicles and local dealerships? The newspaper classifieds?
In this day and age, car dealerships must find customers where they are most active: social media platforms and Google. Search engine visibility will help people find your business faster and increase your brand awareness, and social media does the same, while helping you answer customer questions and build a strong online reputation. Work hard to gain exposure in these areas, and you’ll be surprised how quickly your customer flow and profits can grow.
Create streamlined business processes.
AA Milne, author of the Winnie-The-Pooh series, once said “Organizing is what you do before you do something, so that when you do it, it is not all mixed up.” This quote applies to just about every aspect of life, including business success. If you don’t have organizational processes in place for how you handle cars, customers, and employees, you’re going to waste time fixing mistakes and appear unprofessional to the customers who come through your doors. This is the easiest way to waste time, and chip away at your potential profits.
Before you even open your doors, you should have detailed organizational plans in place for your business—but we realize dealerships that are already open don’t have that luxury. If you’re struggling to stay organized on a day-to-day basis, sit down with your business brain trust and develop some strategies for better organization and more efficient business operations. While it might take some time for your employee pool to get used to these new processes (you actually might bother some of them by changing how things work), they’ll eventually get used to the changes—and that will leave your business running more smoothly than ever before.
Scrutinize your F&I Department.
There’s not much wiggle room when it comes to profits on the service or sales side of your dealership business. But because your financing and insurance department has the ability to negotiate with car-buying customers, they’re in a highly lucrative position that can strengthen your business profits.
Take a deep look at your F&I department. Are they driving good value for your business on a consistent basis? Are they working hard to negotiate deals that are beneficial for your business and the consumer? If the answers to these questions are “no” or “maybe,” then it might be time to switch things up in this department.
Work hard to retain your current customers.
Your current customers are perhaps the most important asset to your business. While you might only see them a few times a year for repairs and oil changes, they have first-hand experience with your business and the people who run it, and they’ll be more than happy to recommend your business to friends and family members who are looking for a new car—or send them running in the opposite direction.
Word-of-mouth is the most trusty and prolific form of marketing there has ever been—that’s why it’s so important to keep your current customers happy with (and aware of) your business. Discounts and complimentary maintenance programs are a nice touch that gives your customers peace of mind—and a perk that customers will share with their friends and family looking for new vehicles. Keep your current customers happy, and you’ll get new customers as a result. Keep them happy, too, and your business success and profits will snowball.
Keep a high-quality car inventory on hand.
It doesn’t matter how great your employees are, or how efficiently your business is run. If you don’t have great cars, you won’t survive in an industry that’s built around selling cars.
Take advantage of innovative technology.
There are plenty of successful car dealerships that do things the old-fashioned way, and that’s great for them! They probably still pull amazing profits with their local TV commercials and dancing inflatable men. But if you’re going to survive in an industry that’s becoming more technologically advanced and more competitive than ever, you need to take advantage of the technology at your disposal.
Lot management technology has come a long way in the past few years, and for good reason—according to national studies, 22 percent of car dealerships have had a vehicle stolen off their lot in the past year, 30 percent have had trouble locating a vehicle for a test drive, and over 80 percent have finally found a car for a test drive, only to realize the vehicle has a dead battery. These are problems that can tank your business efficiency and profits, and give the general public a negative view of your industry.
That’s where Skypatrol’s ProTek GPS+ system can help. By utilizing state-of-the-art GPS technology and a lightning-fast, Verizon-powered connection, Skypatrol’s ProTek system can help you secure and organize your vehicle fleet, all through a simple, mobile-ready interface. Locate vehicles, keep track of vehicle maintenance and repairs, recover stolen vehicles, set custom geofences, receive low-battery alerts, and set custom mileage logs and service reminders—all from your computer or phone.
ProTek is designed to take the stress out of car lot management and its tedious aspects—by taking advantage of this technology, you’ll be able to improve your efficiency and profits, and worry about what matters most—creating amazing customer experiences and growing your business. Schedule a demo, and learn how ProTek works today!