subject: 4 Ways to Increase Revenue in Your Dealership [print this page] Increasing revenue in today's market is the key to continued viability and profitability. And, there are really only 4 ways to increase the revenue in your Dealership.
1st, you can increase Sales. It seems the most obvious answer, and it is. But, wouldn't you agree that sometimes it is the most difficult to do? I mean if everyone had the ability to increase Sales on a moments notice, there wouldn't be any reason to worry about the future, would there?
So, increasing Sales is one the most basic strategies to employ. How do we do it? Probably the best overall plan of attack would involve retooling your advertising to market to your areas most recent trends and news, involving elements from Social Networking and Media and Guerilla Marketing. These campaigns are small intense campaigns specifically targeted to small groups of the most "ready to buy" customers.
For example, if you live in an area that has been hardest hit by recent downturns in economy and jobs, then your strategy might be focused on how your cars are the "Best Priced in Town" with emphasis on "Special Financing for Our Customers in Need" and you might tie that in with a Social Media Campaign targeting local residents who have registered online at Social sites (read research) combined with a Flier you hand out in the Service Drive offering to "Pay Top Dollar" for all vehicles with over 100000 miles on the odometer.
Now, this may not be a revelation for most of you. But integrating it all together is. You can build momentum from the offers hitting from different angles at different times.
2nd, you can Decrease Expenses. No real mystery there. The problem is, what do you cut?
The obvious would be personnel. Take the time to measure how many personnel you have to how much revenue you generate. A good rule of thumb is to have app $16-20000.00 in Gross Sales per every person employed at the dealer. So, if you have 32 employees, you should have Gross Sales somewhere in the neighborhood of $640,000.00.
Some Dealers will have more, some less and it also depends on your personal preference if you are the Dealer Principal.
However, if you have 32 employees and total Dealership Sales Gross is $300,000.00, you got a problem.
Other areas to take a hard look at are vendors, supplies, services and production costs. (Wages) No one wants to cut pay, but if the ship has got to stay afloat and people want to stay employed, then the belt has got to be tightened by everyone.
3rd, increase the margins on what you sell. This means looking at the overall Gross Profit vs the overall Cost of the items you are selling and making sure that the margins are adjusted properly.
You might be surprised at what some employees are charging for Services and Parts. Having conducted Profit Potential Analysis on Dealerships there are many times when there are surprised faces followed by hard looks at Managers once the true numbers were calculated and we find that the Part we thought we were selling at a 40% margin was really being sold at a 33% margin.
Lastly, you can increase traffic to your Dealer. Increasing traffic is not the same as making more Sales. Having More Traffic can lead to more Sales but does not necessarily mean you will automatically increase Sales.
More traffic is simply more people coming to your Dealership to do business or check you out. Some will try you "on for size" while others are there legitimately to complete a New or Used Vehicle Purchase, Service their vehicle or buy a Part.
Increasing Traffic is ongoing. It is not an event. It is a constant, applied, calculated and measured invitation to do business.
Let me say it again. Increasing Traffic is an invitation to do business. How do you like to be invited? Do you like a party invitation in the mail or do you like an email? Do you want time to plan or are you more spontaneous?
What I am saying is you need to find out what your Customer wants and do it that way.
So, increasing revenue is a reasoned consideration followed by a decision followed by an action. There are 4 ways you can increase revenue in the coming months.
Increase Sales, decrease Expenses, improve Margins and increase Traffic. Pick one and get to work.
Schedule a Profit Potential Analysis a
Now Pay Close Attention --
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