I have been speaking to many of my dealer clients and dealers that I know all over the country and many of them are telling me that things are slowing a bit in terms of new/used vehicle unit sales and gross. Deals are getting more challenging and gross is not what it has been the last 24 months. Some of your dealership staff may have made financial decisions based on what they were currently earning and not considered that at some point the big grosses would come to an end and we would get back to Pre Covid levels of gross and volume. Inflation is pinching people and fixed ops opportunities will become more challenging as well in terms of upsell…I know that you are all currently planning for 2024 and doing budgets and goal setting. I wanted to share with you some recommendations to consider in your planning for 2024.
Getting back to the basics in 2024. Start planning now..
1. Mystery shop your dealership sales and service departments. Identify who and where you have weaknesses and inefficiencies. Inspect your websites closely as well.
2. Staff Training and Education: Educate your staff about the cyclical nature of the automotive industry and the unique circumstances of the COVID-19 period. Training programs focusing on prospecting,sales efficiency, customer service, and adaptability to changing market conditions and lower grosses can be beneficial.
3. Cost Management: Review and optimize your operating costs. This could involve renegotiating supplier contracts, optimizing inventory levels, or even reviewing staffing needs, schedules, and pay plans.
4. Diversify Revenue Streams: Look for opportunities to diversify your revenue. This could include expanding into different segments of used car sales, offering mobile maintenance and repair services, or exploring other automotive-related services that generate gross profit. Sourcing used cars differently then you have in the past should strongly be considered.
5. Customer Loyalty and Retention: Focus on building customer loyalty. Implement or enhance loyalty programs, customer satisfaction surveys, and personalized follow-ups to encourage repeat business. Mine your database for sales and service opportunities.
6. Digital Marketing and Online Presence: Strengthen your online presence. Invest and/or refine your digital marketing strategies like SEO, creative and engaging social media marketing, and creative email campaigns to attract new customers and retain existing ones. Marketing and advertising that is not unique is a waste in my opinion.
7. Market Analysis and Adaptation: Keep a close eye on market trends and customer preferences. Being adaptable to changing consumer demands, such as the increasing interest in fuel efficient vehicles, can position your dealership for continued success.
8. Financial Planning and Budgeting: Revisit your financial planning and budgeting. Prepare for lower margins by creating realistic budgets and setting achievable sales targets.
9. Employee Compensation,Incentives, and Motivation: Maintain employee morale and motivation through volume based incentives, clear communication, and recognition programs. Keeping your team engaged and motivated is crucial in navigating through times of lower profits.
10. Enhance Customer Experience: Differentiate your dealership by offering an exceptional customer experience. This can include everything from the showroom environment and the omni channel purchase process along with after-sales service.
11. Community Engagement: Engage with your local community through events or partnerships. This can increase your dealership’s visibility and reputation, leading to long-term customer relationships as well as sales in variable and fixed operations.
