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Radio Advertising for Automobile Dealers

Radio Advertising for Automobile Dealers

The next several blogs will be focused on radio automotive advertising, and the best place to start is at the beginning … Why radio advertising for automobile dealers? Many decades of research cannot be ignored, and here’s everything in a nutshell. First, radio advertising is cost-effective. It typically costs less than other forms of media. […]

TV Advertising Affects Internet Advertising

TV Advertising Affects Internet Advertising

TV advertising affects Internet advertising in a much more positive way than one might think at first glance. While many auto dealers use TV advertising simply for the reach and frequency gained by the advertisements themselves, these TV ads are actually helping out in other ways dealers might not think about. Today, we’re focusing on […]

Automotive Newsletter Benefits

Automotive Newsletter Benefits are Numerous

For car dealers, there’s no denying automotive newsletter benefits. Mailing a quarterly custom newsletter to their customers helps car dealers ensure these customers don’t wander elsewhere the next time they need to buy a vehicle or get their current cars serviced. There are additional automotive newsletter benefits, too. They give you the opportunity to speak […]

Emotional Branding

Emotional Branding is Evident in Automotive Advertising

The term Emotional Branding was coined about 15 years ago by Marc Gobe’, an award-winning marketing expert who, unfortunately, passed away earlier this year. Gobe’ defines Emotional Branding as “this amazing relationship and connection people have with some brands.” Interestingly enough, he also added that in his view the brands didn’t always love people back […]

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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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