AUTOMOTIVE ADVERTISING & MARKETING

Control the Deal!

Control the Deal!

JKRAdvertising / Automotive Advertising, Automotive Advertising Advice, Uncategorized /

April 3, 2019

When the “lowest-price-wins” online car-buying software was introduced about fifteen years ago, it was a fantastic idea. Dealers were happy to accept lower gross profits because their sales volume significantly increased.

But over time competition has changed the entire online sales landscape. As more dealers subscribe to these services and copycat companies emerge, the already small per-car profits continue to shrink.

This phenomenon has made dealers begin to think about seizing control back from these online companies – and for good reason. Even the original creator of the software whose philosophy once was, get as many cars as you can to market and sell them as fast as you can, now thinks it’s time for a sea change. He believes it’s more important in the current automotive marketplace for a dealership to focus on promoting itself to raise brand awareness. Therefore, it is no longer advantageous for a dealer to conduct business only on the premise of selling cars for the lowest price.

His opinion is supported by reports generated from today’s popular dealer data-gathering software services such as Vistadash. As long as the dealer’s ad campaign is executed properly, these reports typically show a direct correlation between when traditional radio and TV ads run and an increased number of online impressions, thereby enhancing the dealership brand. (Note: If you are not currently utilizing these valuable reports, please reach out to us. We’ll be happy to show you the process.)

When a dealer doesn’t invest in branding, they’re relinquishing control to online buying services and settling for lower profits per car.

Remember, there are many competitive deals out there for the consumer, so a good percentage of them are buying cars for reasons other than just the lowest price. What’s just as important is showing the customer you can provide them with the solution to their problems, such as trade value, credit issues, etc.

Focused, effective advertising gives you the chance to not only brand your dealership but also lets consumers know you have solutions for all obstacles to a vehicle sale.

JKR Automotive Advertising: The car dealer ad agency.

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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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