Kelly’s Korner: Increase Profits in Slow Market
Q. What can a dealership do to shore up profits in a slow market?
A. When the market is soft, it is important to focus on the basics. Do not skip any steps on the road to a sale. Ask the sales department to partner up with the parts and accessories department. You may need to create an internal rate for parts and service so your sales department will have some profit margin on the accessories they are selling while remaining competitive with other service providers.
Today’s customers are more cautious with their spending. They usually shop before they purchase, making them more informed about prices. While price in most cases is not the determining factor in the purchase decision, it is a factor we must keep competitive.
Customers also want to customize their vehicles. They like choices. They like to be in control of these decisions.
Customers are accustomed to buying items in packages. Think about what you can present as an electronics package, convenience package, and entertainment package.
Provide a monetary incentive for an immediate purchase. Make sure lenders view the package items as hard-adds so that you can secure financing for the additional purchases.
Use the slow time to follow up with past customers on service agreements and any aftermarket items you can install after the sale.
Think about having a “What’s New Night.” Invite past customers to the dealership to see what’s new in accessories.