Dealership revenues have increased significantly in recent years, but so have expenses. Inadequate technologies, payroll commitments, and efficient processes—to name a few—can severely inflate costs, resulting in narrowing auto dealer profits. 

Dealers must devise new strategies to combat these rising expenses, but many are unsure how to start. This article offers five steps those dealers might take to support healthy profits. 

Improving Auto Dealer Profits in 5 Steps

1. Invest in the Right Technology 

Dealership profitability requires setting up and following a particular customer acquisition process, which might include: 

• Finding a suitable customer base 
• Attracting those customers to the showroom 
• Finding gaps in the current sales process 
• Comparing sales results to sales goals 

However, the successful completion of these processes is often a challenging task. It requires digital tools that offer a front-to-back picture of operations and enable the dealership to perform specific actions.  

This process might include: 

• Collecting and analyzing potential customer data 
• Monitoring the proper performance metrics 
• Reviewing and fine-tuning sales goals 

Leveraging software that can provide dealers with this front-to-back view of operations and supply the data necessary to drive strategies is critical. 

2. Recruit and Retain Top Talent 

Boosting dealership profitability relies on solid talent management. More specifically, successful dealerships employ: 

• Top performers who excel at sales  
• Knowledgeable technicians   
• Excellent customer service representatives 

However, dealerships with underperforming staff or high employee turnover rates can experience ongoing deficits and rising staffing expenses. 

As such, management should consider designing a hiring strategy that attracts the best talent and a dealership culture that helps them retain it.  

This strategy might include conducting formal new-hire onboarding that encourages staff retention and rewards for successful team members who stick with the company for the long haul. 

3. Beef up the Online Presence 

The retail automotive journey is experiencing a digital evolution as would-be car purchasers now begin their research online instead of in the showroom. A physical visit to the dealership is often to take a final test drive and secure the purchase.  

This change in thinking means dealers must interact with potential customers on their preferred platform—not expect them to spend unnecessary time in multiple dealerships. Dealers should bolster the online car-shopping experience by: 

• Tailoring the dealership’s website and making it user-friendly 
• Promoting exclusive offers on all available platforms 
• Engaging with potential consumers on social media 
• Responding to online inquiries and resolving issues quickly 
• Posting visuals such as colorful pictures and videos 

Building an excellent online presence can significantly increase the dealership’s reputation and revenue. 

4. Offer a Complimentary Maintenance Program 

Customer loyalty is the lifeblood of a dealership. It is worth significantly more than customers who make a single purchase, meaning that dealers should look to design a customer retention plan. 

Implementing a dealer-owned complimentary maintenance program might be the first step in this plan. While securing the first car sale is a terrific accomplishment, dealers can build on that success by encouraging consumers to return for future service and maintenance. 

Those customers who take advantage of this program will keep that dealership in mind when it is time for the following vehicle purchase. 

5. Reduce Friction 

Customers want a fast and straightforward purchasing process that includes the following: 

• Hassle-free interactions 
• Minimal wait times  
• Personalized experiences 

To do this and secure long-term success in a saturated auto market, dealers must cut friction from the car-buying process. This strategy might include a one-price sales model, an approach many dealers now take for the following three reasons: 

• It provides more certainty. A one-price model offers more control over revenue, even in unpredictable times. 

• Customers prefer it. Potential buyers are more likely to become active customers—and refer their friends and family—when prices are transparent and reasonable without further discussion.  

• Dealers can sell more cars. Dealerships can sell cars faster with an efficient process that reduces in-person visits to discuss prices. 
  
  

Improving Auto Dealer Profits Requires the Best Tools 

Building the right strategy using the abovementioned steps is critical but often a complex task. Discovering the right insights to formulate a plan requires an all-encompassing, data-driven solution that offers a comprehensive, end-to-end picture of operational activities. 

Contact us today and discover how Affinitiv’s DealerLens can help boost auto dealer profits by finding the right customers, helping you design a sales strategy, and checking that plan’s progress vis-a-vis your revenue goals.