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AUTOMOTIVE ADVERTISING & MARKETING

Creating Urgency

Creating Urgency = More Sales, More Often

Creating urgency in your advertisements can help you sell a lot of cars! Here’s the thing: It’s human nature to want to put off making a decision that costs them money – especially a purchase as large as an automobile. It probably isn’t that they don’t want one of your cars; it’s just that people […]

Perfect Ad

Elements of the Perfect Ad for Car Dealers

What are the elements of the perfect ad for a car dealer? Humor? An iconic character? A catchy jingle? We’ve done blogs about all these things individually, but at the end of the day there are certain elements that must be present for a commercial to be as close to perfect as possible. Today’s contribution […]

Reasons to Blog

An Auto Dealer’s Reasons to Blog

What are the reasons to blog if you’re an auto dealer? There are lots of them. After all, a blog is something a business (in this case, a car dealership) uses to connect with its customers, giving them relevant information they will find useful and/or educational. So with this in mind, let’s explore some of […]

Entertainment

Get ‘Em Before they Need a Car … Using Entertainment

Entertainment can be the deciding factor used to persuade a customer to buy a car from your dealership. In a recent Monday Morning Memo (the column on the Website of Roy Williams, the renowned “Wizard of Ads”), the premise of one particular correspondence was this: You need to make the customer fall in love with […]

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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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