5 Areas to Increase Car Dealership Profitability
Are you a car dealership looking for ways to boost your profits and increase your bottom line? From doing your research to upselling related products, check out our five effective revenue opportunities to make your car dealership become more profitable below.
1. Do your research
The key to a profitable car dealership lies in data. For instance, if you can gather information about the cars that sell best in your area and to your target demographic, you can narrow your focus and concentrate your spending on those models – helping you get a better return on investment.
The data you hold on your customers is also a valuable asset. Keeping track of purchases enables you to contact your clients at key times, such as when their MOT is due, winning extra business. Don’t forget to gather customer feedback, which can be invaluable to ensure that you’re meeting the needs of your client base.
2. Switch to social
Reducing your spending will increase your profit margin; taking cost-cutting measures, like switching to social media, search and email marketing, can even boost your income while lowering expenses. If you’ve been spending your budget on traditional forms of marketing such as local press and radio ads, a change in strategy to free social media platforms could cut your costs.
By investing time (and some money) in a robust online marketing strategy, you’re likely to save on your overall marketing outlay. As you do this, you’ll be getting your business seen by a more targeted audience on platforms like YouTube, Instagram, Twitter, Facebook, in Google searches and in peoples’ inboxes.
3. Upsell related products
As every successful salesperson knows, upselling to customers who are already willing to open their wallets is a sensible strategy to increase your profits. The secret is to make sure what you’re offering is of genuine value to your client base.
Add-ons like dealer-fit accessories, parts and paint protection are common – but the better-targeted your products, the more popular they will be. Keep an ear to the ground and work in order to understand which unique extra products your customers will love.
Diversifying your services is a great way to both reduce costs and keep making money from your core customer base, even after you’ve made your main sale.
Using sub-contractors to repair minor damage to paintwork and alloy wheels can make a significant dent in the profit margin of a used car for sale. Not to mention the time the car can spend off the forecourt waiting for the repairs to be completed.
Bringing this service in-house can not only significantly reduce car preparation costs, but it can also provide a new income stream by offering the service to your existing customer base.
Car dealerships offering services such as alloy wheel refurbishment can steadily increase their revenue stream. They have the advantage of meeting a common need, and you’ll be catering to a targeted audience where the take-up is likely to be high.
5. Reach out
What if you could double or triple your customer base just by simply reaching out to friends and family of existing customers? Offering a lucrative reward system for referrals could help bring in new business from your current client base. Just make sure you give your customers enough reason to recommend your services.
How can Smartfix help you?
If you’re looking to reduce costs and bring your SMART repairs and alloy wheel refurbishments in-house, we can help get you started. At Smartfix we offer business packages and training with everything you need to start a same-day SMART & alloy wheel repair service at your car dealership. We specialise in both mobile and workshop systems and modular alloy wheel repair equipment for bespoke requirements.