10 Best Practices to Increase the Dealership’s Bottom Line (Part 1)

Dealership leaders, no matter the specific market or industry, are looking to achieve similar goals… be more profitable and more efficient, sell more and grow as a business. There are many different strategies you can deploy to achieve these objectives.

Dealership leaders, no matter the specific market or industry, are looking to achieve similar goals… be more profitable and more efficient, sell more and grow as a business. There are many different strategies you can deploy to achieve these objectives.

This article discusses key ideas that dealership principals and managers can implement to improve their bottom line and differentiate themselves from the competition.

1. Know (and Leverage) the Sales Potential of Your Customer Base

Each new sale should be the first step in a long process: the customer’s vehicle will require service and parts. Dealerships that closely analyze their after-sales potential will be much more likely to be the ones to take advantage of those opportunities.

Each model has an estimated annual consumption established by the OEM; in some cases, the dealer does not know this information, and in other cases the dealer does but does not have the tools to take advantage of it.

If you analyze the post-sale potential and the buying trends of your customers, you will be able to fully dedicate yourself to working on these opportunities that can represent hundreds of thousands of dollars.

Tip: Autologica Business Intelligence includes a report that shows the customers you need to contact to absorb their sales potential and prevent them from going to the competition.

2. Saving Time, Money, and… Paper

In the quest to optimize resources, time and money are key factors, but paper enters the equation because it is not a minor expense. And for dealers seeking to be greener, it is important to reduce the use of this input.

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Invoices and other documents can consume paper, and sending out those documents is time-consuming. If you can this type of information automatically, you will save many hours of repetitive and costly manual tasks.

Tip: Autologica Sky DMS includes Quick Alerts, a module that automates the sending of invoices and other documents, and also sends alerts when special situations occur.

3. Leverage Vehicle Reception to Improve the Customer Experience (and Sell More)

There is a trend in almost every industry that has a direct relationship with customers: the reduction of in-person contacts.

In this context, every interaction with the customer is vital, and one key interaction is vehicle reception in the workshop. This is the moment to record the condition of the vehicle prior to repair, but also to detect other interventions that can be performed. You have 100% of the customer’s attention and need to take advantage of this valuable moment.

Ask yourself the following questions: How good is the reception checklist we are using today? Do we generate more work than the customer requests? What is the ratio? Do we take advantage of this moment to know if the customer would choose us again? Do we provide a unique experience?

Take advantage of your checklist to learn more about the customer, to offer seasonal services, other services that we know they may need but they did not express, and to learn about their experience and degree of loyalty.

Tip: DealerTablet is an Autologica solution that helps dealers improve the customer experience during vehicle reception and make the most of that moment to ask key questions. Dealers also save time by eliminating manual tasks such as the manual creation of the repair order.

4. Work on Lost Sales and Discarded Opportunities

Lost sales and ignored opportunities mean you will be losing the full sales potential of each of those customers.

How can you take advantage of this information?

  • If the main reason you’re losing parts sales is lack of inventory, you can work on your purchasing strategy. Autologica Sky DMS includes an Order Suggestion feature, an intelligent purchase analysis feature that drastically reduces lost sales.
  • If the main reason you’re losing service sales is lack of interest, you need to analyze how the dealership’s expertise is being communicated to customers, so that they see your service suggestions not as a cost, but as a trusted recommendation.

5. Know Exactly What’s Happening in the Workshop

The Service Department today plays a key role in dealership success. To get the most out of this department, it is necessary to measure several KPIs, constantly adjust them, improve processes, and always keep a close eye on performance.

  • Ratio of jobs invoiced to customers

This KPI monitors the service mix is put, i.e., what proportion of jobs are invoiced to customers versus jobs whose cost is absorbed by the dealership, such as pre-deliveries.

  • Number of third-party jobs per month

We’ve seen cases where there was an average of 30% of third-party work in service invoices, which means that the dealer is missing out on a large portion of service sales.

  • Efficiency and productivity

These KPIs are as vital as breathing; without efficiency and productivity, the workshop may be losing money when it should be a major contributor to dealership profit.

Tip: Autologica Sky DMS has features that automate the measurement of each key metric, detect bottlenecks, and help resolve delays in the workshop.

These first 5 ideas can be quickly implemented in the dealership. The key is to apply best practices, improve processes, and use a DMS that supports these initiatives.

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