AUTOMOTIVE ADVERTISING & MARKETING

Automotive Co-Op

The Automotive Co-Op Dance between Dealer and Corporate

JKRAdvertising / Automotive Advertising, Automotive Advertising Advice, JKR Advertising News /

April 9, 2015

The monthly automotive co-op dance between auto dealer and corporate entity can be a bit awkward, especially if the dealer personnel are not perfectly in step with corporate, who always “leads” this dance. Just ask any clerical worker at an automotive dealership that handles its own advertising. Even in the best of circumstances, it’s an arduous process – but it’s also a very necessary one, because the auto dealer depends on these dollars for operating capital.

Once a spot has been produced, the automotive co-op process begins. When the procedure is followed properly, the first step is sending it to corporate for pre-approval. Why? Because if it’s rejected by corporate, it’s too late to make any changes after the fact … and a simple error like that could cost a dealer a significant amount of money!

After the pre-approval is obtained and the advertisement runs for the entire month, that’s when the fun really begins (we say that tongue in cheek, of course). This “fun” includes acquiring every invoice from every radio and television station … making sure the dates are correct … ensuring that the dollar figures are correct … getting every script with the proper station stamps … making pdfs of video productions … and then sending all this off in a pretty bow to corporate. If there are discrepancies, it requires phone calls and e-mails to station reps. There will be times when numbers are over budget or significantly short, and you have to find out why this happened.

If you have ever handled automotive co-op before, I am preaching to the choir.

The Automotive Co-Op Solution

The automotive co-op issue is just one more reason why JKR Automotive Advertising is well worth the investment. Our billing specialists handle every facet with accuracy and skill – and while no one is perfect, we’re about as close as you’ll find. You’ll love what JKR can do to ease the burden on you! This way, when corporate is ready to do the next co-op dance, you can tell them you’re sitting this one out – and letting JKR cut in.

JKR Automotive Advertising: We Move Cars.

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Post-Pandemic Dealer Gross Profits are Down – But They Don’t Have to Stay There!
March 13, 2024
It is no secret that dealer gross profits per vehicle are down sharply in the post-COVID automotive world. According to a recent article in Automotive News, gross profits of the six largest publicly traded dealership groups plunged significantly from Q4 2022 to Q4 2023. One of them was actually down 35% per vehicle!

The article explains: High interest rates, more expensive vehicles and a steadier post-pandemic supply chain continue to soften demand and bring it closer to pre-pandemic levels. Still, new-car buying has remained strong overall …

This means that, while sales volume is similar, overall bottom lines are lower for many dealers due to the reduced gross profits. What about your dealership?

Being Realistic
It’s time to turn the page! The time for dealers to simply be order takers for people willing to pay MSRP for a vehicle (and in some cases more) has passed and dealers have to work hard once again to achieve acceptable gross profits.

Selling a high volume of cars doesn’t control gross profits, no matter how much you wish this was the case. Correct processes and menu pricing – and strict adherence to them – do!

What kind of processes?
∙ Slow down the transaction! Your sales staff has to once again sell the customer on the features and benefits of every new and pre-owned vehicle on your lot.

∙ Your salespeople and managers should devalue the customers’ trade-in value (politely, of course) as much as possible. After all, if the customer expects you to lower your price, shouldn’t you be able to do the same on their trade? Remember, you’ll have to fix it up, put your name on it and resell it to someone else with all the tenacity you would a brand-new car. So make sure you buy it right … because the profit is made when you buy it, not when you sell it!

∙ To that end, management should be ready and willing to leave the desk and do thorough walk-arounds on each trade to ensure the best outcome for the dealership.

The Cure for Low Gross Profits
If you are like a lot of dealers these days, you could use some good news. Here it is: while you may not have the capability to achieve profit margins similar to those you enjoyed during the pandemic, they could likely be improved. JKR’s clients enjoy the benefit of attracting not only more customers, but better ones, too!

If meeting and exceeding your sales goals (and increasing gross profits at the same time) sounds great to you, you need to call us. Don’t settle for reduced gross profits when help is out there to get you closer to where you’d like to be.

Want to know how we do it? Reach out to Senior Partner Richard Brauns (407) 701-4233 or Partner/Vice President Jon Albert (407) 718-2494 today.

JKR Automotive Advertising: We Move Cars.

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