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What Does a Typical Customer Want? A Problem Solver!

What Does a Typical Customer Want? A Problem Solver!

A typical customer shopping at your dealership for a new or pre-owned vehicle is there to solve what they deem to be a real or perceived transportation “problem” in their minds. What is this problem? It’s their need for a different vehicle than they currently have, of course. While this seems obvious as you […]

Make Them Smile and They’ll Remember You

Make Them Smile and They’ll Remember You

Everyone likes to smile. For this reason, humorous advertisements are quite often the most recognized – and most remembered – advertisements of them all. This type of ad typically works especially well on radio or television. We at JKR believe ads that make people smile – or even laugh out loud – certainly help […]

Being Real About Q1 2017

Being Real About Q1 2017

It’s time to be real about the automotive industry’s first quarter of 2017. For each of the past nine years, numbers of new-car sales in the United States have been higher than the year previous. And now, just because 2017’s forecasted sales figure is expected to be about two percent lower than 2016, some folks […]

trustworthy

Study: Print, TV, Radio & Direct Mail Most Trustworthy

What form of media do consumers view as being the most trustworthy? According to a recent study conducted by MarketingSherpa, the answer might surprise you. But if you’re like us at JKR, you won’t be taken aback at all by the findings, which show that “traditional” means of advertising such as print, television and radio are […]

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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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