Boost Your Auto Business: Strategies That Deliver Additional Profit

Identify New Potential for H2.

As we approach the end of the first half of 2024 and review performance, now is the time to identify additional opportunities to boost profits for the second half of the year. Last month, RWA Automotive sponsored a webinar with Auto-Retail Network on this very topic, ways to boost your business. Our CEO John Hogan was joined on the panel by Craig Petty of Hatfields, and Nathan Tomlinson of Devonshire Motors, Mike Jones chaired the session. Today, we’re sharing some of the snippets discussed.

The Price Is Right:

We are in a competitive market with used cars. We know this. Every vehicle matters now that supply is tight, so dealers need to deliver as much margin as possible. Most dealers have implemented pricing policies, while maintaining them can be a challenge, this is where serious margin can be attained. We work with our customers on maintaining strict pricing policies such 70 days with 7 days grace. After that, the car is sent to auction. These policies are consistently reviewed, using the data to show you what cars are a problem and what prices need to be adjusted.

Anyone who works in automotive sales is acutely aware of competition car buying sites bring. How can dealers compete? Craig Petty from Hatfields Jaguar Land Rover shared a great tip with us. If they know a customer is selling their vehicle on one of these sites, they pick up the phone and ask them to sell it to Hatfields instead. It sounds incredibly simple, but many dealerships may forget that this is still an option. Could you be more assertive in making counter offers to your customers? We all know that dealers understand the value of accessories on cars better than car buying sites do. Educating the customer about this and reminding them you’ll offer them true value is a practice many dealers could implement today.

Ensuring sales teams never forget to upsell is vital in today’s market. At RWA Automotive, we analyse dealership data all day, every day. Typically, our top performing customers are upselling 25% across tyres, alloys and bodywork. Don’t forget paint protection too, we often see a margin of 25-35%.

The Golden Goose of Aftersales:

When asked where we think many dealers are missing profit boosting opportunities, it’s aftersales. Our team regularly sees potential for additional profit in VHC and workshop productivity. While this is not breaking news for any dealership out there, the amount of profit possible might be. Our customers see an additional average of £25,000 in earnings through focusing on these areas alone. That is a substantial boost for any business. Concentrating your efforts here over the next half of the year will lead to profit and will set you up for success for years to come.

The Role of the Educator:

We’ve been reading about the need to educate our customers on the benefits of EV for some time now. This job isn’t finished. So many prospects are still confused about EVs, absorbing misinformation and are eager to understand if it could work for them. Most dealerships will run showroom sales events, but throughout the webinar we learned that focusing event content on EV education for prospects is still very beneficial, not only for sales today but also into the future. Continuing to educate your market and become a trusted voice will carry value in times ahead. Devonshire Motors have experienced great success in running these events.

Keep Your Friends Close:

We’ve all heard the phrase that getting a new customer costs you more than retaining your existing ones, and that’s still very true. The importance of a clean, and well-maintained CRM system cannot be underestimated for any dealership today. Using your own data to create timely communications to keep your customers engaged and coming back to you is vital. Identifying and communication ahead of time when warranty is up, when services are due or when their finance is due to end all hold the possibility of further profits.

Closing out the first half of the year can be a hectic time, but it is also an opportunity to implement new procedures and ensure you are on track to deliver your year’s target. We hope the tips above help you and your business to achieve your goals.

If you are interested in what data analytics could unlock for your dealership, chat to us today. We have worked with many automotive retailers to deliver their goals and unlock additional earnings. Let’s grow your profits together.